Biden makes final push for student loan forgiveness before Trump takes office

President Joe Biden is making one last push to help Americans by canceling student loan debt before he leaves office. Over the past few years, his efforts to forgive billions of dollars in student loans have faced many obstacles. 

Now, with time running out, the president is trying to extend programs that could help borrowers pay off their loans more easily.

The U.S. Department of Education recently announced a new rule aimed at giving borrowers more time to join long-term repayment plans. 

These plans help people pay back their loans slowly, with the chance to have some or all of their debt forgiven. One of these programs, the Income Contingent Repayment (ICR) plan, could cancel student debt after 20 years of regular payments.

Under the new rule, the deadline for signing up for ICR and another plan called Pay-As-You-Earn (PAYE) would be pushed back three years, from July 2024 to July 2027. This extension gives borrowers more time to enroll in these programs and work toward getting their loans forgiven.

But, there is a catch. The new rule will not go into effect until July 2026. This means that the next president, possibly Donald Trump, could stop these plans from moving forward if he is elected. If that happens, any debt forgiveness set to happen after 2026 may be canceled.

This latest announcement follows other efforts by the Biden administration to tackle student debt. In October, the government revealed a plan to forgive $4.5 billion in student loans for more than 60,000 public service workers. These workers, who have jobs in fields like teaching and healthcare, can have their debt forgiven after making 10 years of payments.

Earlier this month, Biden's team proposed another rule that could forgive debt for people who are most likely to default on their loans. The rule would use data to predict who is at risk of not being able to pay back their loans. If finalized, this rule could help even more borrowers by erasing their debt before they fall too far behind.

During his 2020 campaign, President Biden promised to forgive student loans for millions of Americans. He wanted to offer up to $10,000 in relief to most borrowers and up to $20,000 for those who received Pell Grants. This plan was estimated to cost the government over $400 billion.

But Biden’s student loan forgiveness plan has faced many legal challenges. In June 2023, the U.S. Supreme Court blocked his plan, ruling that the Secretary of Education cannot forgive more than $430 billion in student debt. 

After this, Biden made another attempt to help borrowers. His second proposal aimed to cancel up to $20,000 in interest for borrowers who owe more than they originally borrowed. It also looked to cancel all debt for those who have been paying off undergraduate loans for over 20 years.

While Biden’s administration continues to push for student debt relief, it is unclear what the next president will do. Former President Donald Trump has not clearly said how he would handle student loan forgiveness if he wins the 2024 election. 

However, he has said he plans to overhaul the entire education system, which could include changes to how student loans are managed.

Betsy DeVos, who served as Secretary of Education under Trump, recently shared her thoughts on Biden's debt forgiveness plans. In an interview with Fox News, she argued that if taxpayers are going to fund student loans, the process should be better managed. DeVos believes that the current system is not working well and that private sector lenders should be brought back to offer loans as an option.