President Joe Biden's canceling of billions of dollars in student loan debt could wipe the slate clean for millions of borrowers by November and play a key role in the 2024 presidential election, according to a report.
Issues "present a sharp contrast between Democrats and Republicans are more likely to impact the election, especially if the issues affect voter turnout for one party over the other," higher education expert Mark Kantrowitz told CNBC on Wednesday, noting that student loan relief is among them.
He pointed out that the rule-changing process can take time, but said the Education Department could publish the final rule in the Federal Register this summer.
"So they could easily implement it before the election," he said, cautioning that legal challenges could hamper the timeline.
Kantrowitz's comments came before the Biden administration announced its latest round of debt cancellations on Friday.
The White House announced it was canceling $7.4 billion in debt for more than 270,000 borrowers through a new repayment plan.
The plan has already met with legal conflict.
"See you in court," Missouri Attorney General Andrew Bailey posted on X Friday.
Bailey is one of the Republican attorneys general challenging the Biden administration's new plan. Missouri was among seven states that filed a federal lawsuit on Tuesday seeking to block Biden's loan relief proposal, the Associated Press reported.
The White House said the administration has now forgiven $153 billion in student debt for 4.3 million Americans.
"It seems like we're having a steady drum beat of announces of loan forgiveness," Kantrowitz told HNGN on Friday.
If the Supreme Court intervenes again, it could block the new rules based on the 'major questions doctrine', which stipulates 'that anything of vast economic and political significance had to be explicitly approved by Congress,' he said.
The Administrative Procedure Act could also come into play.
"If something is arbitrary or capricious it can be blocked by the courts. There, even if they are following normal procedures for issuing new regulations, some things are clearly violating the Administrative Procedure Act," Kantrowitz said.
Biden promised during the 2020 presidential campaign to wipe out student debt, but his $400 billion loan cancellation plan was blocked by the Supreme Court last June after justices found it unconstitutional.
The president then directed the Department of Education to reexamine its authority to forgive student debt and modify existing loan relief programs to survive legal challenges.
Biden previewed his Plan B for loan forgiveness in Madison, Wis., on Monday which targets specific groups of borrowers, and blamed the stymied relief on the high court and Republicans.
"Tens of millions of people's debt was literally about to get canceled, but then some of my Republican friends, elected officials, and special interests sued us, and the Supreme Court blocked us," the president said. "But that didn't stop us."
