Student loan borrowers waiting for relief shouldn’t count on the election

• President Joe Biden’s key plans for broad student debt relief have been blocked in court.
• Neither former President Trump nor Vice President Kamala Harris will be able to take immediate action.
• Harris supports Biden’s efforts and would likely continue more targeted aid efforts if she wins the election.

Millions of federal student loan borrowers remain in the country suspension of debt repayment that elections won’t solve it right away.

That’s because President Joe Biden’s latest attempt to issue broad aid is blocked in court by a lawsuit filed by GOP-led states. Vice President Kamala Harris said she supports Biden’s efforts, but if he wins, she won’t be able to move the case forward until the court makes a decision. Former President Donald Trump completely opposed forgiveness and called for the abolition of the Department of Education.

Despite its inability to provide broad debt relief, Biden’s Department of Education has issued targeted relief that has so far provided debt cancellation to nearly 5 million borrowers.

Education Undersecretary 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 this the transition to the new administration’s priorities will be a “baton race.” He hopes the next president will continue his work beyond relief.

“We need to make sure we run student loan programs in a way that protects students from being left with unsustainable debt,” he said. “But we also need to invest in making these programs affordable from the start, and then making sure these programs reliably lead to college degrees and jobs.”

The presidential candidates almost did not raise this issue – drowned out by concerns about the so-called economy, immigrationAND taxes. That’s a big turnaround Elections 2020 when candidates made ambitious election promises. That’s probably because polls show it’s not the most important issue for voters. Only 18% of respondents said student debt relief would influence their vote in the May bank rate questionnaireand a separate May questionnaire conducted by AP-NORC found that just three in 10 adults approve of Biden’s actions on this issue.

While more than 40 million Americans still carry student loan balances averaging about $38,000, keeping them from buying a home, raising a family or saving for retirement, any future president has limited incentives — or opportunities — for broad assistance.

Without broad loan cancellations, Biden is giving up relief for targeted groups of borrowers

Despite being stuck in broad aid, Biden’s Education Department has spent the last four years making numerous changes to aid programs, such as Loan forgiveness for public purposes, defense of the borrower against repayment for cheated borrowers and the principle of paid workwhich ensures that the borrower’s debt will not accrue after graduation.

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The department also implemented a new income-driven repayment plan, SAVE, designed to lower monthly payments and provide a shorter forgiveness period. The plan has been blocked in court since July following complaints from GOP-led states, and 8 million registered borrowers will not have to make payments for at least six months as the Department of Education works to reprogram its systems and adjust repayment plans for affected borrowers.

Some borrowers have lost hope. Constance, 65, has nearly $200,000 in student debt, an amount that has increased since she graduated from law school in 1994. Constance — who asked that her first name be used for privacy reasons — has gone through periods in which most of her expenses her children were consumed by her salary. She deferred her student loans, which means she didn’t make payments but accrued interest.

“It’s out of control at this point and there’s no way I’m going to be able to pay it back,” Constance said.

She’s disappointed because she probably would have qualified for Biden’s candidacy second attempt at broader student debt reliefwhich was blocked in court.

Specifically, the plan would cancel up to $20,000 in student debt for borrowers whose balances have increased due to unpaid interest and provide relief to borrowers who first began repayment at least 20 years ago.

On October 25, the Department of Education presented a separate proposal for relief for borrowers experiences long-term financial difficulties preventing them from repaying loans, including challenges related to high childcare or health care costs. The department expects to finalize the plan in 2025 and has not commented on how a future administration might impact the relief.

Sara Partridge, deputy director of higher education policy at the left-leaning Action Center for American Progress, told BI it’s difficult to predict how much relief student loan borrowers will have because legal challenges continue.

“We will probably need to see how the current case against the Plan B rules plays out to better understand what exactly is possible in the future,” Partridge said.

Kvaal said he wanted to focus on the future the way the country funds higher education. He also said borrowers should expect further action in regulating the student loan industry, pointing to the Department of Education’s restructuring of servicer contracts over the past year. These changes allowed the department to process debt relief applications more quickly and implement more safeguards for borrowers to ensure that their servicers are honoring their contractual obligations.

Harris vs. Trump on student loans

While both Harris and Trump have provided minimal details on how they will address student debt, Partridge said it would be helpful to look back at their previous actions.

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

She said the Trump administration has “taken no major steps” to address long-standing problems such as a backlog of public service loan forgiveness and borrower defense requests. Borrowers should not expect broader aid or reforms if Trump wins the election. He also praised the Supreme Court’s decision invalidating Biden’s debt forgiveness.

The composition of Congress will also influence what awaits student loan borrowers – this would mean Republican control previously introduced regulations to prevent relief, a bill could be signed.

“Where is the forgiveness for a guy who didn’t go to college but works to pay off a loan in the truck he drives to work? What about the woman who paid off her student loan but now can’t afford a mortgage? Is the administration providing them with help? Of course not,” Sen. 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 to provide aid for as long as possible.

“He used all his powers to offer relief to borrowers,” Kvaal said. “We are currently fighting in court to offer more debt relief, but we are also taking dozens of actions that are not being challenged in court that have helped millions of borrowers.”