President Joe Biden has faced a multitude of challenges while trying to implement his student loan forgiveness plans, throughout his term. The promise of broad student debt relief, particularly his proposed $20,000 forgiveness for millions of borrowers, was stymied by numerous roadblocks, most notably the Supreme Court’s rejection of the plan. However, despite these setbacks, Biden’s administration has still made significant strides in alleviating the student debt burden for many Americans.
Challenges and triumphs of Biden’s student loan policies
Under his leadership, more than 5 million borrowers have benefitted from loan cancellations, according to a Forbes report, marking the highest number of student loan discharges under any US president.
Donald Trump Inauguration
Through various programs, such as the Public Service Loan Forgiveness (PSLF) and borrower defense, the administration has waived a total of $183.6 billion in student loans, offering relief to many who were misled by institutions or who worked in public service.
Taxpayers vs. borrowers: The debate over who pays for relief
While Biden’s efforts have brought significant relief to borrowers, his success has not been without controversy. Critics have long argued that student loan cancellation unfairly burdens taxpayers who either did not attend college or who have already repaid their loans.
Furthermore, the complex rules around programs like PSLF have long hindered the efficacy of student debt relief. Biden’s administration sought to loosen these regulations, helping to reduce the barriers many borrowers faced when trying to access forgiveness. For example, the PSLF program, which initially had a 99% rejection rate, has now granted loan forgiveness to over 1 million public servants, a significant leap in addressing past administrative errors.
However, the future of student loan forgiveness under Biden’s administration is uncertain, especially with the looming possibility of a new Republican-controlled government. As Donald Trump takes office on Monday, January 20, 2025 for a second yet non-consecutive term, the fate of Biden’s student loan relief plans hangs in the balance.
The looming threat of Trump’s potential rollbacks
Trump’s stance on student loan forgiveness has been clear – he opposes it. During his first term, Trump proposed eliminating the PSLF program entirely and consolidating income-driven repayment plans into a single option that would require higher monthly payments. Trump has also criticized student loan forgiveness as “vile” and “illegal,” arguing that it unfairly shifts the financial burden onto taxpayers.
Can Trump really take back loan forgiveness?
The prospect of a Trump presidency poses a serious threat to Biden’s student loan policies. If Trump were to take office, his administration could undo much of the progress Biden has made in expanding student loan forgiveness programs. One of the key areas of concern is the potential rollback of policies that loosened the rules for debt forgiveness. For example, Trump’s “Project 2025,” a policy blueprint for his second term, suggests ending PSLF and narrowing eligibility for borrower defense, the very programs Biden expanded during his term. This could severely limit the avenues for students and public servants to have their loans forgiven, effectively reversing much of the relief granted under Biden.
Furthermore, Trump’s proposed changes to income-driven repayment plans could complicate loan forgiveness for millions of borrowers. Under his administration, the cap for monthly payments could increase from 10% to 12.5% of discretionary income, a money.com report stated, and the timeline for forgiveness could be extended for graduate borrowers, shifting from 20-25 years to 30 years.
These changes would likely result in higher monthly payments for borrowers and delay their path to loan cancellation. Trump’s history of advocating for privatization of federal loans could also impact borrowers by reducing protections that are currently available through federal loan programs, such as deferment and forbearance.
Perhaps one of the most significant concerns among borrowers is whether Trump’s administration will try to retroactively reverse past loan forgiveness actions. While it remains unclear if this is feasible, the very idea of potentially reversing Biden’s accomplishments has left many borrowers on edge. If Trump moves forward with proposals to privatize loans or revise repayment options, millions of borrowers could find themselves grappling with less favorable terms.
Why the next presidential term will be crucial for millions of borrowers
While President Biden’s student loan forgiveness policies have already faced significant opposition, the incoming Trump administration could pose an even greater threat to these relief efforts. Trump’s stance on student debt has been firm, and the potential for his administration to dismantle Biden’s initiatives is very real. For millions of borrowers who have relied on the changes Biden made to the student loan system, the future is uncertain. The battle over student loan forgiveness is far from over, and it will likely continue to shape the national political landscape in the years to come.
