RACINE, WISCONSIN – JUNE 18: Republican presidential candidate and former President Donald Trump speaks … [+]
President Joe Biden’s plans to forgive student loans are “abhorrent,” Donald Trump said at a campaign rally this week. And when he returns to the White House, he hinted that those plans might be reversed.
“He did the tuition thing, and that didn’t work out so well, he got reprimanded for it,” Trump said Tuesday at a campaign rally in Wisconsin, likely referring to Biden’s student loan forgiveness plan that was rejected by the Supreme Court last summer. “Then he did it again, it’s going to get reprimanded again, even more, it’s an even more heinous attack, but he did the tuition thing just to get election publicity,” Trump said. It’s unclear which measures Trump was referring to, because the Biden administration has unveiled several loan forgiveness initiatives designed to supply relief to student loan borrowers.
But Trump’s suggestion that Biden’s student debt forgiveness might be “rejected” reflects a broad Republican effort to defeat those plans in court and Congress. And if Trump is elected in November, his administration could take further steps to weaken and even eliminate several student loan forgiveness programs.
Biden has thus far approved $167 billion in student loan forgiveness
Although the Supreme Court effectively struck down Biden’s mass student loan forgiveness plan last summer – which might have forgiven $10,000 to $20,000 of federal student debt for many borrowers – the administration was in a position to push through unprecedented relief through other programs.
Using quite a lot of tools, including executive actions, the Department of Education’s “compromise” authority, and latest regulations, the Biden administration has eased or expanded access to several existing student loan forgiveness programs, including Borrower Defense to Repayment for those defrauded by their school; Public Service Loan Forgiveness for borrowers who work within the nonprofit or public sector for 10 years or more; and the Total and Permanent Disability Discharge Program for many who have a disability. Many of those programs have been stricken by administrative and processing problems for years, resulting in low approval rates or pushing borrowers into dearer repayment programs.
In addition, the Biden administration has encouraged borrowers to enroll within the Saving on a Valuable Education plan, a brand new income-driven repayment option that may lower payments, stop runaway interest, and speed up student loan forgiveness timelines for certain borrowers. Many borrowers saw their balances explode under previous versions of the IDR plans attributable to high interest accumulation. To date, greater than eight million borrowers have enrolled in SAVE.
In total, these initiatives have resulted in nearly five million Americans receiving $167 billion in student loan forgiveness, in keeping with the newest data from the Department of Education.
“Thanks to the efforts of this administration, more than one in 10 federal student loan borrowers has now been approved for debt relief,” the department said in an announcement last month.
Biden will introduce a brand new student loan forgiveness initiative this fall
The Biden administration can also be preparing to unveil a brand new student loan forgiveness plan in the autumn that’s separate from the initiatives which have already provided relief to many borrowers. This latest debt forgiveness plan, intended as a second attempt at mass student loan cancellation following the Supreme Court ruling last 12 months, might be created through a distinct process and could have its own legal force, which administration officials say increases the likelihood that it is going to withstand expected legal challenges.
When the brand new debt relief program goes into effect, it is going to help five groups of borrowers. These include borrowers who’ve struggled with skyrocketing rates of interest, those that began repaying greater than 20 or 25 years ago, borrowers who’re eligible for existing debt relief programs but haven’t yet applied, former students of “financially low-value” institutions and borrowers who’re in distress.
Trump could reverse or repeal student loan forgiveness programs
If Trump wins the presidential election this November, government student loan forgiveness programs might be in jeopardy.
Project 2025, a sweeping conservative policy proposal to restructure the federal government and federal programs if Trump returns to the White House, calls for the elimination of many student loan forgiveness programs, including initiatives that predate the Biden administration, equivalent to the Borrower Defense to Repayment, Public Service Loan Forgiveness, and loan forgiveness tied to income-driven repayment plans.
“The new administration must end the previous administration’s abuse of payment pauses and HEA loan forgiveness programs, including defending borrowers from repayment, releasing them from school closures, and public service loan forgiveness,” the statement said. Suggestion. “The new administration should also take immediate steps to initiate the legislative process to repeal or substantially modify the previous administration’s HEA provisions that provide debt relief to borrowers.”
If the project takes effect in 2025, it might also end “interest subsidies or debt forgiveness” for borrowers on income-driven repayment plans. The project also proposes returning the federal student loan system to personal lenders – a practice the Obama administration stopped in 2010.
The Trump campaign distanced itself from certain elements of Project 2025 in a Statement to Politico earlier this 12 months.
Republicans proceed to attempt to block Biden’s student loan forgiveness initiatives
Meanwhile, Republicans on the state and federal levels proceed to take steps to dam or repeal the Biden administration’s student debt relief programs.
Last 12 months, the Republican-led House of Representatives passed a bill to eliminate the SAVE plan and the scholar loan forgiveness advantages related to it. However, the bill failed within the Democratic-controlled Senate and would have ultimately been vetoed by President Biden. This 12 months, Republicans in Congress introduced a sweeping reform bill that might eliminate student loan forgiveness related to income-driven repayment plans and repeal Biden-era debt forgiveness provisions.
At the state level, Republican politicians try to dam the Biden administration’s student loan forgiveness initiatives through litigation. Nebraska and Kansas led the legal challenges to Biden’s original mass debt forgiveness plan that ultimately won within the Supreme Court last 12 months. Many of those states have now filed lawsuits to dam the brand new SAVE plan. A significant ruling in one among those cases is predicted any time now. And those self same states could ultimately challenge Biden’s latest debt forgiveness plan, set to take effect this fall.
