Student debt continues to be a hot-button issue in the U.S., with over $1.7 trillion owed as of 2023, second only to mortgage debt. Under President Biden, significant strides were made to address this burden. However, with Donald Trump set to return to the White House in January 2025, the landscape for student debt relief may shift dramatically.
Biden’s Approach
The Biden administration implemented several measures to provide relief for student loan borrowers. Early in his term, Biden extended the student loan payment moratorium initiated during the Trump administration.
This pause allowed borrowers to suspend payments without accruing interest, offering relief to millions of Americans. The moratorium, which lasted through the pandemic, ended in October 2023.
Biden also advocated for broad student loan forgiveness. He proposed forgiving $10,000 in federal loans per borrower, with higher amounts for Pell Grant recipients. In 2022, the administration announced a forgiveness plan of $10,000 for individuals earning less than $125,000 annually and $20,000 for Pell Grant recipients. However, this initiative faced legal challenges and was ultimately struck down by the Supreme Court in 2023, which ruled that large-scale debt forgiveness required Congressional approval.
Despite these setbacks, Biden’s administration managed to reduce or forgive student debt for over 5 million Americans through targeted relief programs.
What to Expect
Donald Trump’s second term is expected to bring a different approach to student debt. Trump has historically opposed broad student debt forgiveness, arguing that it unfairly shifts the financial burden to taxpayers. This stance suggests that initiatives from the Biden era, such as widespread forgiveness and targeted relief programs, are unlikely to continue.
Elimination of PSLF
One of the more concerning possibilities is the elimination of the Public Service Loan Forgiveness (PSLF) program. PSLF offers loan forgiveness to federal borrowers who work in public service roles, such as government or nonprofit organizations, after a set number of qualifying payments.
The program is designed to incentivize careers in public service, but it has faced criticism for its complexity and cost. Trump’s previous budgets proposed eliminating PSLF, and his administration could pursue this policy in his second term.
Shift in Focus
Trump’s administration is likely to emphasize personal responsibility over forgiveness, possibly introducing policies that encourage alternative repayment plans without offering forgiveness. Additionally, his administration may seek to reform how student loans are disbursed, potentially making it harder to borrow large sums without a clear repayment plan.
Ongoing Debate
The issue of student debt reflects deeper ideological divisions. On one side, liberals argue that broad debt forgiveness is necessary to alleviate economic burdens, particularly for low-income and minority borrowers. They see student debt as a barrier to social mobility and economic growth, pushing for policies that make higher education more accessible and affordable.
On the other hand, conservatives often view student debt forgiveness as an unfair subsidy that benefits those who chose to attend college at the expense of taxpayers. They argue that tertiary education is a personal investment, and individuals should be held accountable for their financial choices.
Both perspectives highlight the underlying issue: higher education remains unaffordable for many Americans. The average borrower owes around $37,000, and over 45 million people are burdened by student loans. This debt impacts life choices, from buying a home to starting a family, and hampers economic progress.
Career Opportunities
While free university education akin to some European countries seems unlikely in the U.S., there’s a growing argument for expanding vocational training and non-degree career paths. Addressing the affordability of education and increasing opportunities for well-paying jobs that don’t require a degree could reduce reliance on student loans.
The future of student debt relief is uncertain, but it’s clear that systemic change is needed. Whether through forgiveness, reform, or alternative career pathways, addressing the student debt crisis remains a crucial issue for millions of Americans.
FAQs
What is the current U.S. student debt total?
As of 2023, Americans owe over $1.7 trillion in student loan debt.
Did Biden forgive student loans?
Biden provided relief to over 5 million borrowers but faced legal challenges.
What is PSLF?
Public Service Loan Forgiveness forgives loans for public service workers after qualifying payments.
Will Trump eliminate PSLF?
Trump’s administration may seek to eliminate the PSLF program.
How much does the average borrower owe?
The average student loan borrower owes around $37,000.
