For many Americans overwhelmed by student loan debt, the first week of October was bad.
On Monday of that week, a yearlong grace period ended for student loan borrowers struggling to make payments since the pandemic pause lifted a year ago. Two days later, a separate program, meant to help borrowers in default get back on track, also ceased.
The next day, a federal judge in Missouri temporarily blocked President Joe Biden’s efforts to finalize a broader student loan relief plan. That regulation – his “Plan B” after the Supreme Court struck down his first big proposal – would have fully canceled the debt of millions of longtime borrowers and forgiven runaway interest for millions more. The ruling was especially jarring because the day before the plan was halted in Missouri, a federal judge in Georgia said it could go forward.
To sum it up: The federal student loan system is an even bigger mess than usual. Just a few weeks before Election Day, the Missouri case and other court challenges have barricaded several avenues for student loan relief President Joe Biden and Vice President Kamala Harris touted earlier this year. And now, borrowers in dire financial situations are staring down tougher consequences for evading bills than they’ve likely reckoned with in years.
The potential implications at the ballot box of the legal whiplash are unclear, however, the heightened politicization of the student loan system has left many Americans feeling financially paralyzed.
“I would not expect any of this to be resolved before the election,” said Preston Cooper, a senior fellow at the American Enterprise Institute, a conservative think tank. “If you’re holding your breath, you’re probably going to be holding it for a very long time.”
In a blog post this week, the Education Department stressed the clock is ticking, warning: “Borrowers now have only three months until they face consequences for late payments – making our work to support student borrowers and reform the broken student loan system more important than ever.”
What’s the status of student loan relief?
After the Supreme Court rebuked Biden’s first big attempt to help floundering borrowers, millions of whom could have had up to $20,000 in debt wiped away, the president’s alternate strategies garnered significant attention. Because there are many pathways to loan relief, multiple court battles are moving forward on different grounds.
The reforms that haven’t been challenged are less controversial, smaller-scale efforts. Reforming guidance for student loan bankruptcy is one example of a debt relief tactic that has been less vulnerable to lawsuits. The administration has also opened the door for more students who feel defrauded by their colleges to file “borrower defense” claims to get their debts canceled.
“They’ve delivered historic levels of debt relief,” said Sara Partridge, the associate director of higher education policy at the Center for American Progress, a liberal think tank. The Education Department said earlier this year the Biden administration had forgiven roughly $170 billion in student loan debt for about five million Americans.
The larger reforms drew major pushback in court. Within weeks of the Supreme Court’s controversial 2023 decision, the Biden team began enrolling borrowers in a new income-driven repayment plan, which officials named Saving on a Valuable Education, or SAVE. Miguel Cardona, the education secretary, called it the “most affordable repayment plan ever.” Through SAVE, about a half-million Americans were approved, as of July, for $5.5 billion in debt relief, according to a White House news release.
As officials began implementing the SAVE program, the Education Department convened with federal negotiators to map out a larger student loan forgiveness proposal. By April 2024, Biden pledged that this separate, more wide-reaching plan would eliminate interest beyond the original loan amounts of 23 million borrowers.
By late August, court challenges by Republican attorneys general stopped SAVE in its tracks. The millions of borrowers enrolled in the plan and other income-based repayment programs are now in interest-free forbearance while the court battles play out.
“It’s shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers,” Cardona said in a statement earlier this year responding to the litigation. “President Biden, Vice President Harris, and I continue to believe that college affordability is a cause worth fighting for – and we’re not giving up.”
Biden’s bigger plan has also been temporarily blocked, a development former President Donald Trump’s campaign praised.
“President Biden’s plan, if you can call it that, is a cynical ploy destined to fail that preys on the anxieties of young people for political gain and is unfair to the millions of Americans who’ve paid off their student loan debt through hard work and sacrifice,” said Karoline Leavitt, the Trump campaign’s national press secretary, in a statement. (The Harris campaign did not respond to a request for comment.)
Meanwhile, borrowers counting on the various forms of debt relief are unsure about what comes next.
“Attorneys and advocates like myself are often at a loss for what to tell people to do,” said Ed Boltz, a bankruptcy lawyer in Durham, North Carolina, who helped advise the Education Department on its broader forgiveness proposal. “It’s a very frustrating time for everyone.”
Read more:Student loan borrowers were expecting more help. They’re stuck waiting again.
Could the student loan chaos hurt Harris? Not exactly
Though student loan forgiveness may not rank as high for voters as issues like abortion, research shows that support for generous debt cancellation can be politically beneficial to Democrats. In his televised debate against Vice President Kamala Harris last month, Trump capitalized on the haphazard state of the Biden administration’s student loan agenda.
“They said they’re going to get student loans terminated and it ended up being a total catastrophe,” he said. “So all these students got taunted.”
Americans may not be so quick to blame Biden for the legal mess entangling his student debt policies. A survey of 2,000 adults conducted two months after the 2023 Supreme Court ruling suggests opinions about the crisis are more nuanced. Many people attribute America’s student loan mess broadly to colleges, student loan servicers and the courts, according to Mallory SoRelle, an assistant professor of public policy at Duke University who has studied the political impacts of student loan relief.
“President Biden actually gets the least blame,” she said. “Our results would suggest that it should not actually present a huge political cost for Biden or Harris, to the extent that we think Harris is kind of inheriting his legacy.”
Zachary Schermele covers education and breaking news for USA TODAY. You can reach him by email at zschermele@usatoday.com. Follow him on X at @ZachSchermele.
