President Joe Biden has made student loan forgiveness a centerpiece of his administration, rolling out an effort to not only reduce repayments but also cancel debt for millions of borrowers. However, President-elect Donald Trump return It was reported to the White House in January, but the future of that effort is now in question.
During a presidential debate with Vice President Kamala Harris, President Trump described Biden’s efforts to forgive student loans as a “complete disaster.” Although he has not explicitly mentioned a student loan plan, he has called for abolishing the Department of Education, which manages the $1.6 trillion federal student loan portfolio.
It is unclear which agency or entity would administer these loans if the Department of Education is abolished, and the measure would require parliamentary approval. The Trump campaign did not immediately respond to a request for comment on the president’s student debt relief plan.
The 46 million Americans with $1.7 trillion in student loans have a lot at stake, according to a 2021 Morning Consult study, and nearly half of borrowers say the financial burden is a life choice. It is said that it is affecting many people, delaying home purchases and starting a family. Biden’s term comes to a close with two major relief efforts bound in courtthere is further uncertainty about what Trump’s second term in office will mean for these plans.
“We know what Project 2025 is about, and we know what we saw in the first Trump administration,” said Persis, executive director of the Student Borrower Protection Center, an advocacy group for people with student loans. Mr. Yu says. “We need to be very concerned about what the next administration means for borrowers.”
The incoming Trump administration may be unlikely to continue the Biden administration’s efforts to fight ongoing lawsuits targeting current student debt relief efforts, Kate Wood, a lending expert at NerdWallet, said in an email. said. That could mean the end of these programs, experts say.
“Programs that the Biden administration creates or expands access to through regulatory changes could easily be rolled back,” she added.
What is President Trump saying about student loan relief?
President Trump slammed the Biden administration’s efforts during a September debate with Vice President Kamala Harris.
Referring to the high court’s ruling, President Trump said, “He said he was going to cancel student loans, and it ended up being a disaster. He walked out and was overruled by the Supreme Court again.” 2023 decision The policy blocked Biden’s original student loan forgiveness program, which was supposed to provide up to $20,000 in relief per borrower.
“So all these students were ridiculed for this, this whole idea. And how unfair that was. Part of the reason they lost,” he added. .
What does Project 2025 say about student loans?
project 2025 It’s an effort overseen by the conservative Heritage Foundation to lead the Republican president-elect to reform the executive branch, calling for the abolition of the Department of Education and saying student loans should be handled by the private sector. are. They also advocate canceling student loan relief.
“The new administration must end the practice of acting as if its federal student loan portfolio is a campaign fund used to garner political support and votes,” Project 2025 says. “The new administration must end abuses of the loan forgiveness program. Borrowers should be expected to repay their loans.”
Trump has called for abolishing the Department of Education, but it is unclear whether he agrees with this view. During his campaign, President Trump distanced himself from Project 2025, calling some of the proposals “terrible.”
What’s the status of Biden’s student loan relief plan?
There are currently two student loan relief plans pending in court, both of which are being challenged by Republican-led states.
of save valuable educationor SAVE plan, is an income-driven repayment program that fixes a borrower’s monthly payments based on income, reducing financial costs. Some low-income SAVE borrowers have monthly payments of $0.
But the plan’s 8 million enrollees are now in limbo after a court ruling blocked the Biden administration’s implementation of the plan. Currently, those borrowers are Patience until AprilThat means their loans will effectively be suspended while the Biden administration defends the plan in court.
Separately, another Biden administration Plan to use A higher education law that would have forgiven all or part of the student loans of 30 million borrowers also hit a legal hurdle, and a court put the plan on hold in October.
In the latter case, Republican states argued that Biden’s plan was aimed at “unlawfully mass canceling up to hundreds of billions of dollars in student loans.” The Department of Education has vowed to defend both plans.
What will happen to these programs under the Trump administration?
Bob Eitel, who served as a senior adviser to the Secretary of Education during the first Trump administration, said he expects the next president to move to repeal the proposed loan cancellation regulations.
“The Trump administration may pursue various avenues of loan relief, but it will not be the large-scale, comprehensive type of forgiveness that the current administration has pursued,” said Roberts, president of the Freedom Institute for Defense Policy. Co-founder Eitel said.
NerdWallet’s Wood said other student loan relief programs, such as the Public Service Loan Forgiveness Program, may remain and may be harder to eliminate but also less accessible.
The program, signed by former President George W. Bush in 2007, forgives the student loans of public employees such as teachers and police officers after 10 years of repayment. The Biden administration has reworked PSLF to make it easier for the majority of applicants to qualify for forgiveness. They were told they were not qualified..
During President Trump’s first term, the Department of Education was overseen by Betsy DeVoswhich promoted school choice from kindergarten through high school and also called for significant spending cuts. she too proposed ending He tried unsuccessfully to participate in the Public Service Loan Forgiveness Program.
Do Americans support student loan relief?
It’s a divisive issue among voters, with views colored by political leanings and whether they have student debt, according to an Associated Press/Norc poll released in June.
Only 15% of Republicans think student loan forgiveness is important, compared to 58% of Democrats. More than half of those currently paying student loans said it was an important issue for them, compared to one-third of those who had no experience with student loans, the survey found.
Republicans oppose Biden’s initiative, saying it could take revenue away from some financial institutions, while also forgiving loans for those who enroll in college, given the small number of Americans with a college degree. Some people are against it.
Missouri Attorney General Andrew Bailey said in a statement in September that the Biden administration is “placing working Americans with Ivy League debt.”
contributed to this report.
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