Student loan borrowers awaiting relief should not expect an election

• President Joe Biden’s major plans for broad student debt relief are being blocked by the courts.
• Neither former President Trump nor Vice President Kamala Harris could take action anytime soon.
• Harris supports Biden’s efforts and will likely continue more targeted relief efforts if she wins the election.

Millions of federal student loan borrowers are staying put a debt relief limbo that the elections will not provide an immediate solution.

That’s because President Joe Biden’s latest attempt to provide broad relief is being blocked in court by a lawsuit from Republican Party-led states. Vice President Kamala Harris has said she supports Biden’s efforts, but if she wins, she will not have the option to move forward until the court reaches a decision. Former President Donald Trump has opposed forgiveness altogether and called for the elimination of the Department of Education.

Despite the inability to provide broad forgiveness, Biden’s Department of Education has provided targeted relief, helping nearly 5 million borrowers have debt forgiven so far.

Secretary of Education James Kvaal has been working on these efforts since 2021, seeking to improve a higher education system that relies heavily on student loans.

He told Business Insider Shifting to the priorities of a new administration will be “an arms race.” He hopes the next president will continue his thinking and go beyond just providing aid.

“We must ensure that we implement student loan programs in a way that protects students from unaffordable debt,” he said. “But we also need to invest in making those programs affordable on the front end and then ensuring that those programs reliably lead to graduation and employment.”

The issue has barely been raised by the presidential candidates – drowned out by concerns about the economy, immigrationAnd taxes. It’s a big turnaround from the Elections 2020 when candidates made ambitious campaign promises. That’s probably because polls show this isn’t a top issue for voters. Only 18% of respondents said student debt relief would influence their vote for a May Bank rate questionnaireand a separate May questionnaire The AP-NORC survey found that only three in 10 adults approved of Biden’s actions on this issue.

While more than 40 million Americans still have student loans averaging about $38,000, preventing them from buying homes, starting a family or saving for retirement, any future president has limited motivations – or opportunities – for broad staff.

Without broad cancellation, Biden has taken away relief for specific groups of borrowers

Despite stalling on broad aid, Biden’s Department of Education has made a slew of changes to aid programs over the past four years, such as Public Service Loan Forgiveness, borrower’s defense against repayment for defrauded borrowers, and the rule of paid workwhich ensures that a borrower’s debts don’t pile up after he or she graduates.

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The department also implemented a new income-driven repayment plan, SAVE, intended to lower monthly payments and provide a shorter timeline for forgiveness. The plan has been blocked in court since July after challenges from Republican Party-led states, and 8 million enrolled borrowers will no longer have to make payments for at least the next six months while the Department of Education works to reprogram its systems and adjust of the reimbursement plans for affected countries. borrowers.

Some borrowers have lost hope. Constance, 65, has nearly $200,000 in student debt, an amount that has skyrocketed since she graduated from law school in 1994. Constance – who asked to use her first name for privacy reasons – went through periods when her children’s expenses took up the majority of her expenses. her salary. She deferred her student loans, meaning she didn’t make any payments but accrued interest.

“It’s just gotten out of hand at this point, and there’s no way I can pay it back,” Constance said.

She is disappointed because she would likely qualify for Biden’s second attempt at broader student debt reliefwhich has been blocked by the court.

Specifically, the plan would forgive up to $20,000 in student debt for borrowers whose balances have grown due to unpaid interest, and provide relief to borrowers who first started making repayments at least 20 years ago.

On October 25, the Ministry of Education unveiled a separate proposal to provide relief to borrowers experience long-term financial problems causing them to be unable to repay their loans, including problems with high childcare or health care costs. The ministry expects to complete the plan in 2025 and did not comment on how a future administration might influence aid.

Sara Partridge, associate director for higher education policy at the left-leaning Center for American Progress Action Fund, told BI that it is difficult to predict what relief will come to student loan borrowers as legal challenges remain ongoing.

“We’ll probably have to see how the current case against the Plan B rule plays out to get a better understanding of what exactly is possible in the future,” Partridge said.

Kvaal said he wants to focus on the future the way the country finances higher education. He also said borrowers should expect more action on the regulation of the student loan industry, pointing to the Ministry of Education’s restructuring of servicers’ contracts over the past year. These changes have allowed the department to process debt relief applications more quickly and implement more safeguards for borrowers to ensure their servicers meet their contractual obligations.

Harris versus Trump on student loans

While both Harris and Trump provided minimal details on how they would tackle student debt, Partridge said it is useful to look back at their past actions.

“I expect continued improvements and limited expansions of debt relief where legally possible under the Harris-Walz administration,” Partridge said.

She said the Trump administration has “not taken major steps” to resolve long-standing problems such as backlogs in government loan forgiveness and credit protection applications. Borrowers should not expect extensive relief or reforms if Trump wins the election. He also praised the Supreme Court’s decision halting Biden’s debt relief.

The composition of Congress will also influence what awaits student loan borrowers – Republican control would mean that previously introduced legislation to prevent aid from being included in the law.

“Where is the forgiveness for the man who didn’t go to college but is working to pay off the loan on the truck he takes to work? What about the woman who paid off her student loans but is now struggling to pay her mortgage Is the government providing them relief? Of course not,” Senator Bill Cassidy, the top Republican on the Senate Education Committee, said in a recent statement.

Regardless of who wins the election, legal challenges to debt relief will keep borrowers in limbo. Kvaal said the fight is not over and the Biden administration will work as long as possible to provide relief under its authority.

“It has done its utmost to provide relief to borrowers,” Kvaal said. “We are currently fighting in court to provide more debt relief, but we are also taking dozens of actions that are not challenged in court and have helped millions of borrowers.”