With Trump’s win, student debt relief is in question. Here’s what to know.
President Joe Biden has made student loan relief a central issue of his administration, launching an effort to forgive debt and lower payments for millions of borrowers. But for President-elect Donald Trump return Arriving at the White House in January, the future of those efforts is now in question.
During a presidential debate with Vice President Kamala Harris, Trump described Biden’s efforts to forgive student borrowers as “a complete disaster.” While he did not explicitly mention the student loan program, he called for eliminating the Department of Education, which manages the $1.6 trillion federal student loan portfolio.
It’s unclear which agency or group would administer the loans if the Department of Education was eliminated, a step that would require congressional approval. The Trump campaign did not immediately respond to a request for comment about Trump’s student debt relief plan.
there’s a lot to do 46 million Americans About half of borrowers holding $1.7 trillion in student loans said the financial burden affected their life choices, delaying buying a home or starting a family, according to 2021 Morning Consult data study. Mr. Biden’s term is coming to an end, with two of his key relief efforts coming to an end tied up in courtadding to uncertainty about what a second Trump term as president would mean for those plans.
“We know what the 2025 plan is and we know what the first Trump administration saw,” said Persis Yu, general counsel at the Student Borrower Protection Center, an advocacy group for student loan borrowers. “We should be very concerned about what the next administration means for borrowers.”
NerdWallet loan expert Kate Wood said in an email that the next Trump administration may be unlikely to continue the Biden administration’s efforts to fight ongoing litigation over current student debt relief efforts. Experts say this could mean the end of these programs.
“The Biden administration’s plans to create or expand access through regulatory changes could easily be undone,” she added.
What did Trump say about student loan forgiveness?
During a September debate with Vice President Kamala Harris, Trump lashed out at the Biden administration’s efforts.
“When they said they were going to terminate student loans, it turned out to be a complete disaster. He went out and was struck down by the Supreme Court again,” Trump said, referring to the high court’s decision 2023 decision That stymied Biden’s original student loan relief plan, which would have provided relief of up to $20,000 per borrower.
“So all these students are being ridiculed for this whole thing – this whole idea. How unfair that would be. And that’s part of the reason they’re failing,” he added.
What does the 2025 plan say about student loans?
2025 plan – an initiative overseen by the conservative Heritage Foundation to guide the next Republican president in an overhaul of the executive branch – has called for abolishing the Department of Education and said student loans should be handled by the private sector. It also advocates eliminating student loan forgiveness.
“The new administration must stop treating the federal student loan portfolio like campaign funds to gain political support and votes,” Project 2025 said. “The new administration must end abuses in loan forgiveness programs. Borrowers should be expected to repay their loans.”
It’s unclear whether Trump agrees with these views, despite his calls to end the Department of Education. On the campaign trail, Trump distanced himself from Plan 2025, calling some of its proposals “terrible.”
How is Biden’s student loan relief plan going?
Currently, there are two student loan relief programs making their way through the courts, both of which are being challenged by Republican-led states.
this Save valuable education costsThe SAVE plan is an income-driven repayment plan that links borrowers’ monthly payments to their income, thereby lowering their financial costs. Some low-income borrowers in SAVE have monthly payments of $0.
However, the program’s 8 million participants are now in limbo after a court ruling blocked the Biden administration from implementing the program. Currently, these borrowers are Be patient until Aprilmeaning their loans are essentially on hold while the Biden administration defends the program in court.
Plus, another Biden administration Planned use The Higher Education Act, which aims to wipe out all or part of the student debt held by 30 million borrowers, has also hit a legal roadblock, with a court putting the plan on hold on hold October.
In the latter case, Republican states argue that Biden’s plan seeks to “illegally and massively cancel hundreds of billions of dollars in student loans.” The Department of Education vowed to defend both plans.
What will happen to these programs under Trump?
Bob Eitel, who served as a senior adviser to the education secretary during Trump’s first administration, said he expects the president-elect will move to repeal the proposed loan cancellation rules.
“The Trump administration will likely pursue a different path to loan forgiveness, but it won’t be the massive, sweeping relief that the current administration is pursuing,” said Eitel, president and co-founder of the Defending Liberty Policy Institute.
NerdWallet’s Wood said some other student loan forgiveness programs are likely to remain, such as the Public Service Loan Forgiveness program, which will be harder to cancel but may become harder to access.
The program, signed into law by former President George W. Bush in 2007, exempts public employees such as teachers and police officers from paying off student debt for 10 years. Biden administration redesigns PSLF to make it easier to get forgiveness, after overwhelming majority of applicants Tell them they are not qualified.
During Trump’s first term, the Department of Education was Betsy DeVoswho advocates for K-12 school choice and calls for deep spending cuts. She also proposed ending Public Service Loan Forgiveness Program, though she was unsuccessful.
Do Americans Support Student Loan Forgiveness?
An Associated Press-Norc poll shows it’s an issue that divides voters, with people’s views influenced by their political leanings and whether they themselves have student debt. publish June.
Only 15% of Republicans think student loan forgiveness is important, compared with 58% of Democrats. The survey found that more than half of those currently paying student loans said it was an important issue, while a third of those with no experience dealing with student loans said it was an important issue.
Republicans oppose Mr Biden’s efforts because they may Deprive some lenders of incomewhile some oppose loan forgiveness for college students because so few Americans have college degrees.
Missouri Attorney General Andrew Bailey said in a statement in September that the Biden administration is “shocking working-class Americans with Ivy League debt.”
contributed to this report.
