Thursday, November 14, 2024

What Trump’s second term could mean for student debt

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Donald Trump’s Oval Office return could mean a major rollback of efforts to relieve student debt — at least if his campaign comments and first-term record are any indicator.

During his last administration, Trump took steps to limit debt cancellation for students defrauded by their schools and proposed eliminating the Public Service Loan Forgiveness program. Conservative activist groups have urged the president-elect to take similar action this time around.

And in 2023, when the Supreme Court struck down President Joe Biden’s first stab at a sweeping student debt forgiveness program, Trump applauded. The attempt to wipe out approximately $430 billion owed by borrowers was “very, very unfair to the millions and millions of people who have paid their debt through hard work” he told a crowd in New Jersey, adding that it was just “a way to buy votes.”

In all, the Biden administration has managed to waive $175 billion of student loans through various programs. But several of its major initiatives aimed at further reducing Americans’ $1.7 trillion pile of education loans have stalled in the face of legal challenges or are still in the process of being written by regulators, giving Trump ample room to try to unwind them if he chooses.

Based on a review of Trump’s website and platform, as well as conversations with advocates, it does not appear that Trump’s campaign released any specific proposals regarding student debt, though he has called for eliminating the Department of Education. A campaign spokesman did not respond to a request for comment about the incoming administration’s plans.

Here’s what debt cancellation initiatives remain in limbo — and what could change.

Read more: Do I qualify for student loan forgiveness?

Biden’s Plan B

The Biden administration’s second attempt to craft a wide-scale student loan forgiveness — nicknamed “Plan B” — looks to be in peril. In April, the Department of Education proposed new rules that would allow it to waive debt for an estimated 30 million Americans, including former students who owed more than their original principal or had been repaying their balances for more than 20 years.

That plan has been repeatedly blocked from going into effect thanks to a lawsuit by Republican state attorneys general. Trump’s Department of Education could shelve it for good by simply declining to finalize the program’s rules, since they were never officially completed. The same goes for a preliminary proposal the Biden administration unveiled last month that would have allowed it to clear away debts for borrowers facing financial hardships.

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