Rather than correcting course and working with Congress to help borrowers, the president has doubled down on legally dubious executive action. Following the Supreme Court's decision in Biden v. Nebraska, student-loan borrowers across the country are left wondering, What now?

Their frustration is well-founded. A year ago, they were promised $10,000–20,000 in forgiveness by President Biden. Now they're facing the prospect of repayment once the three-year-long pause on repayment and interest accrual expires.

A recent survey conducted by Intelligent.com reveals that one in three federal-student-loan borrowers spent money they thought wouldn't need to be paid back after Biden's student-loan-forgiveness announcement last year. Of these borrowers, 7 percent spent the money on gambling, 8 percent spent it on alcohol and drugs, 20 percent spent it on vacations, and 44 percent spent it on retail items. Now that repayment will be resuming, many borrowers may find themselves short on cash.

Meanwhile, a new working paper published by the National Bureau of Economic Research reveals that borrowers covered by the president's moratorium are now in more debt than they were when it started, having taken on more consumer debt (auto loans, home loans, etc.) than borrowers who continued to make payments on their federal student loans. President Biden has pinned this problem on Republicans, claiming that they literally snatch[ed] from the hands of millions of Americans thousands of dollars in student-debt relief that was about to change their lives. Progressive leaders have also gone on the offensive, going so far as to baselessly accuse Supreme Court justices of having taken bribes before coming to their decision.

But whose fault is it really?

Biden and his progressive allies promised loan forgiveness that almost every legal expert knew would be stopped cold by the courts. Faced with a conservative Supreme Court with a record of reining in executive power and delegating duties and responsibilities back to Congress, high-level Democrats recognized as early as July 2021 that the president could not wave his wand and forgive student loans. Then-speaker Nancy Pelosi said as much: People think that the president of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress. Even Biden appeared to understand this during the 2020 presidential campaign, saying of unilaterally canceling student debt that I don't think I have the authority.

But instead of taking serious action to address the structural issues facing our higher-education system, he chose to play politics and energize his base going into the midterm election.

Rather than correcting course and working with Congress to help borrowers, Biden has doubled down on legally dubious executive action. In addition to another attempt at student-loan forgiveness – grounded in the Higher Education Act – the president has proposed an enormous expansion of the income-driven repayment (IDR) program. As our colleague Nat Malkus outlined, IDR expansion – announced simultaneously with Biden's first crack at canceling student debt last summer – will effectively transform it into a grant program, encouraging borrowers to take on more debt and universities to raise their tuition.

The administration is once again setting expectations for borrowers that will be exceedingly difficult to fulfill and exacerbate preexisting problems. Rather than holding institutions of higher learning accountable for students' post-graduation earnings and discouraging excessive borrowing, IDR expansion and mass loan forgiveness will encourage irresponsible borrowing and tuition inflation. Biden and leading progressives are not naïve: They cannot be blind to the high likelihood of their schemes' unconstitutionality or to the fact that their proposed solutions will do more harm than good. They must perceive that the optics of their attempting cancellation, even with its minuscule chances of being realized, will be favored by their constituents.

Making matters worse, the administration has now given borrowers a twelve-month on-ramp to get back into repaying their loans. Interest will begin accruing this fall, as the administration has no way to extend the repayment pause further, but borrowers will not be penalized for missed payments for another twelve months. Pair this with the likely false expectation that student loans will ultimately be forgiven, and borrowers may choose to delay repayment even further only to find themselves with more debt after these political antics have run their course. The longer Biden promises student-loan forgiveness on a massive scale without congressional approval, the longer he encourages borrowers who could be saving money to repay their loans to instead spend it on other things.

Now, this strategy might make sense if Republicans were unwilling to address higher-education reform. Congressional Republicans haven't always been enthusiastic for sensible reforms to higher-education policy, but recently they have stepped up to the plate. Led by Senator Bill Cassidy (La.) and Representative Virginia Foxx (N.C.), congressional Republicans have proposed sweeping higher-education reforms that would streamline our borrower-assistance programs, hold colleges and universities accountable for the quality of their degree programs, and expand socio-economic mobility for all Americans.

Real reform will help borrowers rather than make false promises, and it should be premised on these straightforward assumptions.

First, taxpayers cannot be treated as a bottomless pit of financial support for higher education. In America, higher education is a marketplace, and taxpayer subsidization should be coupled with adequate accountability. Right now, too many institutions of higher learning aren't held responsible for the educational and economic outcomes of their programs.

Second, those who can afford to pay back their student loans should do so. And for those who truly cannot, there should be well-functioning programs that make sure borrowers don't have to live forever under the weight of student debt. Today, we have nine separate programs that provide student-debt relief. Our system needs to be simpler and easier for borrowers to navigate.

Lastly, higher education is an indispensable engine of social mobility in our country. At the very least, students shouldn't be worse off financially than they were when they started their education journey. They should come out of college equipped with a degree, skills, and knowledge that will advance their careers and enable them to pay off whatever debt they accrued in the process.

These premises allow plenty of room for Democrats and Republicans to forge a consensus on reform to confront the central issues facing our higher-education system. Compromises will need to be made, but substantive reform of any kind is preferable to false hope.

It's time for Democrats to roll up their sleeves and work with Republicans to solve the structural issues facing higher education. And it's time for Biden to stop leading borrowers on.

The president has doubled down on legally dubious executive action.

Beth Akers is a senior fellow at the American Enterprise Institute.