Trump win clouds Biden's student debt cancellation efforts

Trump's US election win brings uncertainty for student loan borrowers who were hoping for forgiveness under Biden's policies

In Short

• Trump’s victory halts student loan relief efforts
• Borrowers face uncertainty as GOP challenges forgiveness plans
• Biden’s programmes helped 5 million, future now unclear

President-elect Donald Trump’s victory has cast doubt on the future of student loan forgiveness in the US, raising concerns for borrowers who had hoped for relief under President Joe Biden’s policies. With Trump’s stance on loan forgiveness unclear, many Americans face the possibility of repaying substantial debts without government assistance.

For borrowers like Savannah Britt, who owes $27,000 in student loans from her time at Rutgers University, Trump’s election marks a significant setback. Her mother also carries a debt of $18,000, which was taken to support her education.

Both hoped for relief from Biden’s proposed loan forgiveness, but now, with Trump and Republican-led states opposing the programme, the future of these efforts remains uncertain. “With this new administration, the dream is gone. It’s shot,” Britt expressed, frustrated by the abrupt halt.

REPUBLICAN CRITICISM AND LEGAL CHALLENGES

Republicans have long criticised Biden’s loan forgiveness initiatives, and GOP-led states have filed lawsuits to block widespread debt cancellation. Trump has yet to confirm his stance on the issue but criticised Biden’s plan as a “total catastrophe” during the campaign, accusing it of failing the young people it intended to help.

Biden’s first proposal to cancel up to $20,000 for eligible borrowers was blocked by the Supreme Court last year, with subsequent, narrower plans also stalled due to legal challenges.

A SHIFT IN FEDERAL POLICY

The Biden administration did manage to forgive loans for approximately 5 million Americans by improving existing programmes, particularly for public service workers. However, Trump’s alignment with Project 2025, a plan aimed at reshaping government, hints at a possible withdrawal of federal involvement in student loans.

This blueprint advocates for ending repayment plans initiated by Biden and even suggests eliminating the US Department of Education, which handles the $1.6 trillion student loan portfolio. Such a move, however, would require Congressional approval and leave the question of loan management unresolved.

CONFUSION AND CONCERN AMONG BORROWERS

For many borrowers, including Sabrina Calazans, who owes around $30,000, uncertainty adds financial strain. Calazans, the managing director at the Student Debt Crisis Center, advises borrowers to stay informed through the Federal Student Aid website.

“There’s a lot of confusion about student loans,” she said, noting that loan obligations increasingly affect both younger borrowers and parents taking on debt for their children.

(With PTI inputs)