President Joe Biden has made student loan forgiveness a major issue for his administration, pushing efforts to forgive loans as well as reduce payments for millions of borrowers. But with President-elect Donald Trump back to the White House in January, the future of that effort is now in question.
During a presidential debate with Vice President Kamala Harris, Trump described Mr. Biden’s efforts to forgive student borrowers as a “total disaster.” While he hasn’t clearly finalized his student loan plan, he has been asked to eliminate 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 were to be eliminated, a move that would require approval from Congress. The Trump campaign did not immediately respond to a request for comment on Trump’s plan to reduce student debt.
There are many lines for the 46 million Americans who have $1.7 trillion in student loans, a financial burden that roughly half of borrowers say has an impact on their life choices, delaying buying a home or starting a family, according to a 2021 Morning Consult study. Mr. Biden’s term has ended with two major relief efforts tied up in courtadding to the uncertainty about what Trump’s second term in office means for the plan.
“We know what’s in Project 2025, and we know what we saw in the first Trump administration,” Persis Yu, managing counsel of the Student Borrower Protection Center, an advocacy group for people with student loans. “We should be very concerned about what the next administration will mean for borrowers.”
The next Trump administration may not continue the Biden administration’s efforts to fight ongoing lawsuits targeting current student loan relief efforts, according to NerdWallet lending expert Kate Wood in an email. That could mean ending the program, experts say.
“Programs created by the Biden administration or expanded access through regulatory changes could easily be rolled back,” he added.
What did Trump say about student loan relief?
During a September debate with Vice President Kamala Harris, Trump criticized Biden’s administration efforts.
“When they said they would ask for student loans to stop and it ended up being a total disaster. They came out, rejected again by the Supreme Court,” said Trump, referring to the high court. 2023 decision that blocked Mr. Biden’s initial student loan forgiveness program, which would have provided assistance of up to $20,000 per borrower.
“So all these students got taunted with this whole thing – this whole idea. And how unfair it is. Part of the reason is lost,” he added.
What does Project 2025 say about student loans?
Project 2025 – an initiative overseen by the conservative Heritage Foundation to guide the next Republican president in an overhaul of the executive branch – calls to eliminate the Department of Education, and says student loans should be handled by the private sector. It also suggests reducing student loans.
“The new administration must stop the practice of acting like a portfolio of federal student loans as a campaign fund to support political support and votes,” said Project 2025. “The new administration must stop abuses in the debt forgiveness program. Borrowers must be expected to repay their loans.”
It’s unclear whether Trump agrees with that view, though he has called for an end to the Department of Education. While on the campaign trail, Trump distanced himself from Project 2025, calling some of its proposals “abysmal.”
What is the status of Biden’s student loan aid plan?
Currently, there are two student loan relief plans tied up in court, both of which are being challenged by Republican-led states.
At Save Your Precious Educationor SAVE, the plan, is an income-driven repayment program, which pegs the borrower’s monthly payment for income, lowering financial costs. Some low-income borrowers at SAVE have $0 monthly payments.
The plan’s 8 million enrollees are currently in limbo, however, after a court ruling blocked the Biden administration from implementing the plan. Now, the borrower wait until AprilThat means the loan is on hold while the Biden administration defends the plan in court.
Separately, another Biden administration plan to use it The Higher Education Act to eliminate all or some of the student loans held by 30 million borrowers has also hit a legal roadblock, with a court putting the plan on hold in October.
In the latter case, Republican states argued that Mr. Biden’s plan sought to “unlawfully cancel hundreds of billions of dollars in student loans.” The Department of Education vowed to defend the plan.
What could happen to the program under Trump?
Bob Eitel, who served during the first Trump administration as a senior adviser to the secretary of education, said he expects the president-elect to withdraw the proposed debt cancellation regulations.
“The Trump administration may try different ways to pay off the loans, but it won’t be the kind of mass forgiveness that the current administration is doing,” said Eitel, president and founder of the Freedom Defense Institute for Policy Studies.
Some other student loan aid programs may remain, such as the General Servicer Loan Forgiveness program, which will be harder to eliminate but may not be accessible, NerdWallet’s Wood said.
The program, signed into law by former President George W. Bush in 2007, forgives student loans for public workers like teachers and police officers after 10 years of repayment. The Biden administration is processing PSLF to make it easier for people to apply for pardons, after most people apply to them they are not eligible.
During Trump’s first term, the Department of Education was overseen by Betsy DeVoswhich promotes school choice in K-12 and also calls for deep spending cuts. He is too last proposed Public Service Loan Forgiveness program, although he was unsuccessful.
Does America support student loan aid?
It’s a divisive issue among voters, with people’s views colored by political leanings and whether they have student debt, according to an AP-Norc poll published in June.
Only 15% of Republicans believe student loan forgiveness is important, versus 58% of Democrats. More than half of people who are currently paying off student loans say it’s an important issue, compared to one-third of people who have no experience with student loans, the poll found.
Republicans oppose Mr. Biden’s efforts because they could reduce some incomes, while some reject loans to people who enroll in college, because few Americans have a college degree.
The Biden administration “has saddled working Americans with Ivy League debt,” Missouri Attorney General Andrew Bailey said in a September statement.
contributed to this report.
