With two Biden-Harris administration student loan plans are tied up in legal legislation, there have been reports that the Biden administration will still work to try to help offer student loan forgiveness to borrowers. Here is what we are hearing.
Student Loan Forgiveness
While the SAVE Plan, the latest income-driven repayment plan, and the latest Biden plan for broad student loan forgiveness are on hold pending legal challenges, there are current student loan forgiveness opportunities that exist today.
Programs such as Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness (TLF), and income-driven repayment plans offer routes to forgiveness for eligible borrowers. Additionally, federal student loans come with several discharge benefits designed to provide a safety net for borrowers facing difficult circumstances.
Student loan forgiveness is typically granted upon the successful completion of specific program requirements, often for those serving in public service roles or teaching in certain K-12 schools. Conversely, student loan discharge serves as a protective measure for borrowers when unforeseen events occur. Examples include discharges for borrowers who pass away, fall victim to identity theft or false certification, qualify for borrower defense, experience total and permanent disability, declare bankruptcy, or are affected by a school closure.
Biden’s Presidential Platform and Administration
During his campaign, President Biden pledged to seek student loan relief for the millions of borrowers grappling with student debt. Upon taking office, he extended the pandemic relief measures initiated under the Trump administration. While all federally-held student loans were paused for several years, he focused on developing student loan forgiveness opportunities to alleviate the burden of repayment. However, his efforts beyond pandemic relief have faced legal challenges at every turn.
Despite these obstacles, the administration has successfully provided over $168 billion in federal student loan forgiveness. As his term in office is winding down, President Biden continues to work on a comprehensive plan to support borrowers.
Expanding Federal Student Loan Forgiveness
Currently, there are no approved plans or mechanisms for implementing mass student loan forgiveness. However, reports from Bloomberg and Fortune suggest that President Biden may soon announce an expansion of the Public Service Loan Forgiveness (PSLF) program. While we await this announcement, we can speculate on what such an expansion might entail—though this this remains entirely speculative.
There is some indication that the expansion could extend PSLF eligibility to early childhood educators, aligning with Vice President Kamala Harris’s campaign commitments. Presently, many early childhood educators do not work for qualifying employers. Generally, PSLF eligible employers include federal, state, and tribal governments, as well as 501(c)(3) non-profit organizations. While public school districts qualify, many private early childhood education schools may not.
If PSLF is expanded, it could attract more qualified educators to the field of early childhood education, allowing them to qualify for PSLF and reduce their federal student loan debt after making 120 qualifying payments.
Future of Forgiveness
We find ourselves in an uncertain time regarding the future of the new federal student loan forgiveness programs introduced under the Biden administration. Should Democratic candidate Kamala Harris be elected, we expect the advocacy for these programs to persist. In addition, Harris recently announced her intentions to expand student loan forgiveness to doctors and nurses who agree to work in rural areas. As part of her presidential campaign, she hopes to incentivize 10,000 health care professionals to provide care to some of the most vulnerable populations located in rural areas the country. Her plans include an expansion of PSLF, as well as scholarships and student loan repayment opportunities.
Conversely, if Republican candidate Donald Trump assumes office, his platform may shift the priorities of federal student aid programs. Former President Trump has suggested plans to eliminate all but one income-driven repayment plan and even to dismantle the U.S. Department of Education.
With a tightly contested presidential election just weeks away, the future remains unpredictable, particularly concerning student loan forgiveness programs.