What a Trump victory means for student loan relief | Wilnesh News

The U.S. Department of Education’s efforts to cancel student debt for tens of millions of Americans may come to a halt with the election of Donald Trump, who has called the efforts “despicable” and “not even legal.”

Experts say that when Trump returns to the White House in January, he may instruct his administration officials to stop defending the Biden administration’s student loan relief program in court. Many of the plans are tied to lawsuits filed by Trump’s fellow Republicans.

“The Trump administration could notify the court to withdraw its defense of the case,” said higher education expert Mark Kantrowitz.

At a June 18 campaign rally in Racine, Wisconsin, Trump celebrated the Supreme Court’s 2023 decision blocking President Joe Biden’s first large-scale student loan cancellation.

“He was rebuked, and then he did it again,” Trump said. “It’s going to be rebuked again, maybe even more.”

As a result, the 40 million Americans who have repeatedly pledged to reduce or eliminate debt altogether will have to prepare to restart or continue their monthly payments. The Biden administration’s latest student loan relief effort, dubbed Plan B after the Supreme Court blocked its first attempt, is likely to fail in court without a fierce defense from Biden administration lawyers.

U.S. District Judge Matthew Schhelp in St. Louis, a Trump appointee, issued the latest ruling preliminary injunction Oppose Biden’s revised student loan relief plan. Combined with the administration’s previous efforts, the policy would benefit as many as three-quarters of federal student loan holders, according to one study. estimate Courtesy of Center for American Progress.

“Republicans will likely try to prolong the court cases given the election results, while the Biden administration will try to expedite them,” Kantrowitz said.

Outstanding U.S. education debt exceeds $1.6 trillionaccording to a 2022 report from the nonpartisan Congressional Research Service. Nearly 43 million people, or one in six U.S. adults, hold student loans, the report said.

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, totaling more than $175 billion in relief. It does this primarily by improving existing student loan forgiveness programs that have long been plagued by problems.

For example, under the Biden administration, more than 1 million people have wiped out debt under the Public Service Loan Forgiveness program, which President George W. Bush signed into law in 2007. Cancel their federal student loans after 10 years.

The Department of Education said that before Biden took office, only 7,000 people had received debt relief under PSLF. The program’s rejection rate is said to be as high as 98% in some years.

Experts say they are unsure whether the relief under Trump will last.

“The Biden administration has been making regular announcements about loan relief,” Kantrowitz said. “This will end under the Trump administration.”

During Trump’s first term, he Proposes eliminating the PSLF program, reducing affordable repayment options for borrowers, and eliminating government subsidies for federal student loans, which cover interest for borrowers who are still in school or experiencing financial hardship or unemployment.

Only 15% of Republicans think student loan forgiveness is important, compared with 58% of Democrats according to A national 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 relief say the rising cost of higher education is forcing many families to borrow money to send their children to college, an increasingly necessary step into the middle class. Student debt disproportionately affects women and people of color.

For consumer advocates and borrowers, Trump’s friendliness toward the for-profit school industry is another cause for concern. The former president himself runs one of the schools, purportedly specializing in real estate business training, called Trump University. Like students at many for-profit schools, participants at the school said they were deceived by false advertising and high-pressure sales tactics.

While in office, Trump halted a rule aimed at providing loan forgiveness to those defrauded by schools.

“Trump’s Department of Education is ignoring federal law and refusing to cancel the debt of students who were defrauded by their schools,” Pierce said.

The vice president-elect is another outspoken critic of student loan forgiveness.

“Forgiving student debt is a huge windfall for the wealthy, the college-educated, and especially America’s corrupt college administrators,” said Ohio Senator J.D. Vance, a Yale Law School graduate. Wrote April X, 2022.

Jane Fox, president of the UAW local 2325 legal aid association’s bar union chapter, said Vance is disingenuous and incorrect in viewing debt relief as a benefit for wealthy people.

“Student debt relief is a working-class issue,” Fox said. “The 1% who get into elite institutions and then work at private equity firms like Senator Vance rarely need debt relief.”