The U.S. Department of Education’s efforts to forgive student loans for tens of millions of Americans are likely to come to a halt with the election of President Donald Trump, who has called the effort “despicable” and “not even legal.”
When President Trump rejoins the White House in January, he will likely tell administration officials to stop defending the Biden administration’s student loan forgiveness program in court, experts say. Many of these plans are embroiled in legal battles brought by President Trump’s fellow Republicans.
“The Trump administration could notify the court that it is withdrawing its defense of the lawsuit,” said higher education expert Mark Kantrowitz.
At a June 18 campaign rally in Racine, Wisconsin, President Trump celebrated the 2023 Supreme Court decision blocking President Joe Biden’s first attempt at widespread student loan cancellation.
“He was reprimanded, but he did it again,” Trump said. There will also be further reprimands.
As a result, 40 million Americans who have been repeatedly promised debt reduction or complete cancellation will have to prepare to resume or continue making monthly payments. The Biden administration’s latest student loan forgiveness effort, now known as Plan B after the Supreme Court blocked its first attempt, could fail in court unless Biden administration lawyers defend it vigorously. Highly sexual.
St. Louis-based U.S. District Judge Matthew Shelp, who was appointed by President Trump, announced the latest ruling. preliminary injunction Opposes Biden’s revised student loan forgiveness plan. One report says this policy, combined with the administration’s previous efforts, would benefit as many as three out of four federal student loan holders. estimate By Center for American Progress.
“Given the election results, I think Republicans will try to push out the trial deadline, but the Biden administration will try to accelerate the litigation,” Kantrowitz said.
extraordinary US education debt exceeds $1.6 trillionAccording to a 2022 report by the nonpartisan Congressional Research Service. Approximately 43 million people, or one in six adult Americans, have student loans, according to the report.
Student loan forgiveness likely to dry up under Trump administration
U.S. President Joe Biden speaks while announcing a new plan for federal student loan relief during a visit to Madison Regional Technical College Tuax Campus in Madison, Wisconsin, U.S., April 8, 2024.
Kevin Lamarque | Reuters
Biden has forgiven more federal student loans than any other president. Since he took office, the Department of Education has canceled student loans for nearly 5 million people, providing more than $175 billion in relief. This was accomplished primarily by improving the existing student loan relief program, which had long been plagued with problems.
For example, under the Biden administration, more than 1 million people received debt forgiveness under the Public Service Loan Forgiveness Program signed into law by President George W. Bush in 2007. The program allows loans to certain nonprofit organizations and government employees. Canceling federal student loans after 10 years.
Before Biden took office, just 7,000 people received debt relief under PSLF, according to the Department of Education. In some years, the program’s rejection rate reached 98%.
Experts say it is uncertain whether the relief measures will continue under the Trump administration.
“The Biden administration has been making regular announcements about loan forgiveness,” Kantrowitz said. “This will end during the Trump administration.”
During President Trump’s first term, he Proposes to eliminate the PSLF program, reduce affordable repayment options for borrowers, and eliminate federal subsidies for federal student loans that cover interest for borrowers who are still in school or experiencing financial hardship or unemployment. did.
If Republicans control Congress, Mr. Trump may be able to realize these wishes. They currently have a majority in the Senate. Voting is still taking place in the House of Representatives, and several races are too close to be decided.
“The threats posed by these plans are real and will threaten the financial security of millions of working families,” said Mike Pearce, executive director of the Student Borrower Protection Center.
People walk on the campus of the University of Southern California (USC) on March 21, 2024 in Los Angeles, California.
Tama Mario | Getty Images
But many voters welcome President Trump’s stance on student loan relief and question the fairness of forgiving the loans of people who benefited from higher education.
Only 15% of Republicans think student loan forgiveness is important, compared to 58% of Democrats. According to A national opinion poll conducted in mid-May by the University of Chicago Harris School of Public Policy and the Associated Press-NORC Center for Public Affairs Research.
Supporters of the bailout argue that rising costs of higher education are forcing many families to borrow money to send their children to college, an increasingly necessary step to entrenching themselves in the middle class. are. Student loans disproportionately impact women and people of color.
For consumer advocates and borrowers, President Trump’s friendly approach to the for-profit school industry is also a concern. The former president himself ran one of the schools purportedly specializing in real estate business training called Trump University. Like students at many for-profit schools, attendees said they were fooled by false advertising and high-pressure sales tactics.
During his time in office, President Trump canceled regulations aimed at providing loan forgiveness to people who were defrauded by their schools.
“President Trump’s Department of Education has ignored federal law and refused to cancel the debts of students who were defrauded by their schools,” Pierce said.
The vice president-elect has also been a vocal critic of student loan forgiveness.
“Student debt forgiveness is a huge benefit to the wealthy, the college-educated, and most of all, America’s corrupt university administrators,” said J.D. Vance, a graduate of Yale Law School. Senator (Ohio) I wrote X in April 2022. “Republicans have to fight this with all their might.”
Jane Fox, president of the Legal Aid Society Lawyers Association (UAW Local 2325) chapter, said Vance’s framing of debt forgiveness as a benefit to the wealthy is hypocritical and wrong.
“Student debt forgiveness is a working class issue,” Fox said. “The 1% who went to elite educational institutions and then worked in private equity as Senator Vance rarely needed debt forgiveness.”
