The US Department of Education’s work to cancel student debt for tens of millions of Americans is likely to come to a halt with the election of Donald Trump, who has called the effort “disgraceful” and “not even legal.”
When Trump re-enters the White House in January, he will likely direct his administration officials to stop defending the Biden administration’s student loan forgiveness programs in court, experts say. Many of these plans are tied up in legal battles from lawsuits filed by Trump’s Republican colleagues.
“The Trump administration may notify the court that it is withdrawing from defending the case,” said higher education expert Mark Kantrowitz.
At a June 18 campaign rally in Racine, Wisconsin, Trump celebrated the Supreme Court’s decision in 2023 to block President Joe Biden’s first attempt at broad student loan cancellation.
“He got reprimanded and then he did it again,” Trump said. “It will be scolded again, even more.”
As a result, the 40 million Americans who have been repeatedly promised a reduction or complete elimination of their debt will have to prepare to restart or continue making their monthly payments. The Biden administration’s latest attempt at student loan forgiveness, which became known as Plan B after the Supreme Court blocked its first attempt, is likely to fail in court without a fierce defense by Biden administration lawyers.
St. Louis-based U.S. District Judge This policy would benefit as many as 3 in 4 federal student loan holders when combined with previous administration efforts, according to an estimate from the Center for American Progress.
“Given the election results, Republicans will likely try to extend the timeline on the court cases, while the Biden administration will try to speed it up,” Kantrowitz said.
Outstanding U.S. education debt tops $1.6 trillion, according to a 2022 report by the nonpartisan Congressional Research Service. Nearly 43 million people — or 1 in 6 American adults — have student loans, the report said.
Student loan forgiveness likely to dry up under Trump
US President Joe Biden speaks as he announces a new federal student loan relief plan during a visit to the Truax campus of Madison Area Technical College, in Madison, Wisconsin, US, April 8, 2024.
Kevin Lamarque | Reuters
Biden has forgiven more federal student debt than any other president. Since he took office, the Department of Education has canceled the student loans of about 5 million people, amounting to more than $175 billion in relief. He has done so largely by revamping existing student loan relief programs that had long been plagued by problems.
For example, under the Biden administration, more than 1 million people have had their debt cleared under the Public Service Loan Forgiveness program, signed into law by President George W. Bush in 2007. This program allows some nonprofits and government employees to cancel their federal student loans after 10 years.
Before Biden took office, only 7,000 people had ever received debt relief under PSLF, the Education Department said. The program’s rejection rate was as high as 98% in some years, he added.
It is uncertain that this easing will continue under Trump, experts said.
“The Biden administration has made periodic announcements about loan forgiveness,” Kantrowitz said. “That would end during a Trump administration.”
Trump may be able to materialize these wishes if Republicans take over Congress. So far, they have a majority in the Senate. The house is still waiting, with some races too close to call.
“The threat posed by these plans is real and will jeopardize the financial stability of millions of working families,” said Mike Pierce, 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.
Mario Tama | Getty Images
However, many voters welcome Trump’s stance on student loan relief and question the fairness of loan forgiveness for those who have benefited from a higher education.
Only 15% of Republicans see student loan forgiveness as important, compared with 58% of Democrats, according to a mid-May national poll by the University of Chicago Harris School of Public Policy and the Associated Press-NORC Center for Public Affairs Research .
Proponents of the relief say the rising costs of higher education have forced many families to take out loans to send their children to college, an increasingly necessary step toward reaching the middle class. Student debt disproportionately affects women and people of color.
For consumer advocates and borrowers, Trump’s friendly approach to the for-profit school industry is another cause for concern. The former president himself ran one of these schools, which supposedly specialized in real estate business training, called Trump University. Like many for-profit school students, the school’s participants said they were misled by false advertising and high-pressure sales tactics.
While in office, Trump stopped a regulation intended to offer loan forgiveness to those who had been cheated out of their schools.
“Trump’s Department of Education ignored federal law and refused to cancel the debts of students defrauded by their schools,” Pierce said.
The vice president-elect is another vocal critic of student loan forgiveness.
“Student debt forgiveness is a massive loss for the wealthy, the college-educated, and most of all for the corrupt administrators of America’s universities,” Sen. JD Vance of Ohio, a Yale Law School graduate. has written on X in April 2022. “Republicans must fight this with every ounce of our energy and might.”
Jane Fox, president of the UAW Local 2325 attorney union chapter of the Legal Aid Society, said it was hypocritical and inaccurate for Vance to portray debt relief as a boon for the wealthy.
“Student debt forgiveness is a working-class issue,” Fox said. “Those in the 1% who went to elite institutions and then worked in private equity like Senator Vance rarely needed debt relief.”