Student loan repayments uncertain due to Trump’s victory

President-elect Donald Trump’s victory has cast doubt on the future of student loan forgiveness in the U.S., raising concerns among borrowers who had hoped for relief under President Joe Biden’s administration. With Trump’s position on loan forgiveness unclear, many Americans are faced with the possibility of paying back significant debt without government assistance.

For borrowers like Savannah Britt, who owes $27,000 in student loans from her time at Rutgers University, Trump’s election represents a significant setback. Her mother also has $18,000 in debt, which was taken out to support her education.

Both hoped for relief from Biden’s proposed loan forgiveness, but with Trump and Republican-led states opposing the program, the future of these efforts remains uncertain. “With this new government the dream is over. It’s shot,” Britt said, frustrated by the abrupt stop.

REPUBLICAN CRITICISM AND LEGAL CHALLENGES

Republicans have long criticized Biden’s loan forgiveness initiatives, and Republican Party-led states have filed lawsuits to block widespread debt forgiveness. Trump has yet to confirm his position on the issue, but criticized Biden’s plan during the campaign as a “total catastrophe” and accused it of abandoning the young people it aimed to help.

Biden’s first proposal to forgive up to $20,000 for eligible borrowers was blocked by the Supreme Court last year, while subsequent, more limited plans also stalled due to legal challenges.

A CHANGE IN FEDERAL POLICY

The Biden administration succeeded in forgiving loans to about 5 million Americans by improving existing programs, especially for government workers. However, Trump’s alignment with Project 2025, a plan aimed at reforming government, signals a possible withdrawal of federal involvement in student loans.

This blueprint calls for ending the repayment plans initiated by Biden and even proposes eliminating the U.S. Department of Education, which manages the $1.6 trillion student loan portfolio. However, such a move would require congressional approval and leave the loan management issue unresolved.

CONFUSION AND CONCERNS AMONG BORROWERS

For many borrowers, including Sabrina Calazans, who owes about $30,000, uncertainty is creating financial pressure. Calazans, director of the Student Debt Crisis Center, advises borrowers to stay informed through the Federal Student Aid website.

“There’s a lot of confusion about student loans,” she said, noting that loan obligations are increasingly impacting both younger borrowers and parents taking on debt for their children.

(With PTI inputs)