Biden's broad student-loan forgiveness efforts are over and borrowers are left wondering what's next
Ayelet Sheffey
Updated 7 min read
Student-loan borrowers are entering the new year with uncertainty on their payments and debt relief.
Ongoing litigation with the SAVE repayment plan makes it difficult for some borrowers to plan financially.
Biden also officially withdrew his broad debt relief plans, and any future relief under Trump is unlikely.
Wade Burt, 67, is entering the new year without knowing when — or if — he'll be free of his nearly six-figure student-loan balance.
Burt first took out just under $20,000 in student loans for an associate degree in avionics that he earned in 1988. However, he had periods of unemployment through 1998, during which he could not afford student-loan payments. Over the years, the interest on his loans ballooned his balance.
He eventually earned a bachelor's degree in information systems management, which has allowed him to secure a well-paying job. Burt said he hopes to retire in a few years, but he doesn't see an easy route to getting a handle on the debt.
"I don't have any confidence that I'll pay the student loans beyond 72 because I just won't have that kind of income," Burt told Business Insider, saying that his Social Security checks won't be enough to help. "The reality is that I'm in the last third of my life, and I don't know if we will be able to make those student loans go away."
Millions of other Americans holding student loans are facing similar uncertainties. President-elect Donald Trump is taking office in less than a month, and he's made clear that he opposed President Joe Biden's efforts to enact incremental and broad student-loan forgiveness.
With Republican opposition to student-debt relief, some borrowers told BI they don't feel confident about significant balance reductions over the next four years.
"It feels like we're in a pretty hopeless situation," Burt said. "It's a weight on us, and we don't get very solid answers, so it's pretty hard to plan with all those conditions in place."
The Trump transition team did not immediately respond to a request for comment from BI.
'We're in this waiting game'
Aimee Cooper just wants to know when — and how much — her next monthly payment will be.
Cooper, 53, has been enrolled in the Public Service Loan Forgiveness Program since it started in 2007, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments. She went back to school over the course of the 10-year period to earn two master's degrees, during which her loans were put on in-school deferment and pushed back her forgiveness timeline.
Her student-loan servicer estimated she's less than 10 payments away from reaching forgiveness through PSLF. But she's not sure when that will be achievable because the student-loan repayment plan she's enrolled in — the SAVE plan, created by Biden to make payments cheaper and shorten the timeline for borrowers to reach debt relief — is paused as a result of a GOP-led lawsuit to block the plan.
All borrowers enrolled in the SAVE plan have been placed on forbearance until a court issues a final decision, which means that even if Cooper does choose to make a payment during this time, it will not count toward her PSLF progress.
"We're just in limbo, wondering what's going to happen," Cooper told BI. "We're not asking for special favors, none of us are. We're just asking for someone to tell us what to do."
The Education Department recently reopened two income-driven repayment plans that would give borrowers the opportunity to switch from the SAVE plan and enroll in a new plan to make payments and get credit toward PSLF. Borrowers would likely see different, and possibly higher, payments on those plans, so some might choose to wait until the fate of SAVE is decided.
Malissa Williams, 40, has found herself in the same boat. Working as a nurse, Williams is also enrolled in PSLF, and through the SAVE plan, she was making steady progress toward forgiveness. She's now in forbearance due to the SAVE litigation, and she said she's attempted to contact her servicer's customer service representatives, but the long hold times have rendered it nearly impossible for her to get clear answers on what her next steps should be.
"I'm terrified because there's been the discussion of the income-driven repayment plans going away," Williams told BI. "And when I looked at what my payments could be, it was back up to almost a thousand dollars a month, and that would be a significant blow that would put my student loan payment almost at what my mortgage is."
Some higher education experts previously told BI that regardless of what a court decides on the SAVE plan, Trump's administration is unlikely to continue Biden's repayment and relief efforts. It's also possible that Trump could work to rescind existing regulations, but doing so through the rulemaking process could take at least a year. Trump has also previously suggested eliminating PSLF altogether, but that would require congressional approval, and there has not yet been sufficient support among lawmakers to make that happen.
The uncertainty with SAVE and the actions that Trump's administration might take leave borrowers in a bind as they try to plan for their financial futures.
"We're in this waiting game," Cooper said. "Who knows what's going to happen."
'It's a feeling of anxiety, but also defeat'
With Republicans holding control of both Congress and the White House, GOP-led higher education legislation has a greater chance of being signed into law over the next four years. A key bill, the College Cost Reduction Act, could benefit borrowers by requiring pricing transparency in college programs to limit the amount of debt students have to take on. It would also aim to limit the education secretary's authority to enact debt relief for borrowers outside existing repayment programs.
Rep. Virginia Foxx, the top Republican on the House education committee, said in a recent statement that Biden's debt relief efforts have tried to "foist student loan debt onto hardworking taxpayers."
"The result? A broken student loan program and false hope for millions of borrowers," Foxx said. "Thankfully, on January 20th, Americans will be able to trust the information that's coming from the White House again."
Molly Valentine Dierks, 44, said she's worried that ending relief programs would jeopardize her future investments. Dierks, a college teacher, is enrolled in the SAVE plan, and if the GOP litigation succeeds, she expects her payments to surge, and it would impact her ability to buy a house.
"There's reverberating effects for my financial future," Dierks said. She added that if it comes to it, she has the fortune of falling back on her family for financial support, but she's concerned for her students and other borrowers who don't have that as an option.
"It's a feeling of anxiety but also defeat," Dierks said. It's unclear what's in store for millions of federal student-loan borrowers in the new year. A court decision on SAVE is still pending, and it's unclear how Trump's education department will choose to manage existing repayment and forgiveness programs, including PSLF and the borrower defense to repayment for defrauded borrowers.
Burt, the 67-year-old borrower, said he hopes that the incoming administration will consider assistance for those who have made good-faith efforts to repay their student loans.
"There has to be some empathy for the person who went to school to get a degree to improve their life and never achieved what they expected that degree to achieve," Burt said.
