Student borrowers waiting for relief shouldn't count on elections

• President Joe Biden's key plans for comprehensive student debt relief are being blocked in court.
• Neither former President Trump nor Vice President Kamala Harris would be able to take short-term action.
• Harris supports Biden's efforts and would likely pursue more targeted relief efforts if she wins the election.

Millions of federal student loan borrowers are still in debt relief limbo that the election won't immediately resolve.

That's because President Joe Biden's latest attempt to provide sweeping relief is being blocked in court by a lawsuit from Republican-led states. Vice President Kamala Harris said she supports Biden's efforts but that if she wins, she will have no option to continue until the court makes a decision. Former President Donald Trump has strongly opposed forgiveness and called for the abolition of the Department of Education.

Although the Biden Department of Education lacks the ability to provide comprehensive debt relief, it has enacted targeted relief that has provided debt relief to nearly 5 million borrowers so far.

Deputy Secretary of Education James Kvaal has been working on this effort since 2021, trying to improve a higher education system that relies heavily on student loans.

He told Business Insider The shift to a new government's priorities will be “a race for the baton.” He hopes the next president continues his thinking beyond just relief.

“We need to make sure we run student loan programs in a way that protects students from being stuck with unaffordable debt,” he said. “But we also need to invest in making these programs affordable at first glance and then ensuring that these programs reliably lead to a degree and a job.”

The issue was barely mentioned by the presidential candidates – drowned out by concerns about the economy, immigration and taxes. It's a major turnaround from the 2020 election, when candidates made ambitious campaign promises. That's probably because polls show it's not a top issue for voters. Only 18% of respondents in a May Bankrate poll said student debt relief would impact their vote, and a separate May AP-NORC poll found that only three in 10 adults supported Biden's actions on the issue advocated.

While more than 40 million Americans still carry student loan balances averaging about $38,000, preventing them from buying a home, starting a family or saving for retirement, any future president has limited motivations — or Options – for comprehensive relief.

Without a comprehensive cancellation, Biden has cut relief for certain groups of borrowers

Although Biden's Education Department remains stuck on broad relief, it has made a number of changes to relief programs over the past four years, such as: Such as public service loan forgiveness, defense against borrowers repaying defrauded borrowers, and the gainful employment rule that ensures a borrower's debts do not pile up after they graduate.

The department also introduced 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 after Republican-led states objected, and 8 million enrolled borrowers will not make payments for at least six more months as the Education Department works to reprogram its systems and adjust repayment plans for those affected Borrower.

Some borrowers have lost hope. Constance, 65, has nearly $200,000 in student debt, an amount that has risen sharply since she graduated from law school in 1994. Constance – who asked to give her first name for privacy reasons – experienced times when her children's expenses made up the majority of her salary. She put her student loans into deferment, which meant she made no payments but accrued interest.

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

She's disappointed because she would likely qualify for Biden's second attempt at broader student debt relief, which was blocked in court.

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

On Oct. 25, the Education Department unveiled a separate proposal to provide relief to borrowers experiencing long-term financial hardship that prevents them from repaying their loans, including high child care or health care costs. The department expects to complete the plan in 2025 and did not comment on what impact a future administration might have on the relief.

Sara Partridge, deputy director of higher education policy at the left-leaning Center for American Progress Action Fund, told BI that it is difficult to predict what relief will come to student loan borrowers as legal challenges continue.

“We will likely have to wait and see how the current case against the Plan B rule develops to better understand what exactly is possible in the future,” Partridge said.

Kvaal said he wants to focus on the future the way the country finances higher education. He also said borrowers should expect more action in regulating the student loan industry, citing the Education Department's restructuring of servicers' contracts last year. These changes have allowed the department to process debt relief applications more quickly and introduce more protections for borrowers to ensure their servicers meet their contractual obligations.

Harris vs. Trump over student loans

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

“I would expect further improvements and limited expansions of debt relief under a Harris-Walz administration, where legally possible,” Partridge said.

She said the Trump administration “has not taken major steps” to address long-standing problems, such as backlogs in public loan forgiveness and borrower defense applications. Borrowers should not expect any expansion of relief or reforms if Trump wins the election. He also praised the Supreme Court's decision to overturn Biden's debt relief.

The makeup of Congress will also impact what student loan borrowers face — Republican control would mean previously passed anti-relief legislation could take effect.

“Where is the forgiveness for the man who didn’t go to college but works to pay off the loan on the truck he drives to work? What about the woman who paid off her student loans but is now struggling to pay her mortgage?” “Is the government giving them relief? 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 that the Biden administration will work as long as possible to provide assistance under its authority.

“She has used her powers to the fullest to offer relief to borrowers,” Kvaal said. “We are currently fighting in court for more debt relief, but we are also taking dozens of actions that are unchallenged in court and have helped millions of borrowers.”