What Biden's Exit Could Mean for Student Loan Forgiveness

President Joe Biden is no longer running for reelection, and borrowers want to know what that means for student loan forgiveness. 

The Biden administration has provided student loan forgiveness to nearly 4.8 million borrowers, but legal battles have repeatedly challenged or halted these relief programs. The administration's Saving on a Valuable Education (SAVE) plan, which promises to reduce or wipe out student loan payments for 25 million borrowers, is currently on hold following two separate court decisions blocking some or all elements of the income-driven repayment plan.

How does the fate of student loan forgiveness change now that Biden has pulled out of the race? And what can borrowers do? We asked two student loan experts to weigh in.

Will the SAVE plan go away?

In short, the SAVE plan won't vanish right away.

"President Biden withdrawing his candidacy does not affect the SAVE repayment plan or the legal turmoil surrounding it," said Mark Kantrowitz, a financial aid expert and CNET Money expert review board member.

SAVE, an income-driven repayment plan announced by the Biden administration last year, proposes to wipe debt for eligible borrowers once they've made monthly payments for 20 or 25 years. The next phase of the plan was set to roll out this summer, reducing borrowers' payments from 10% to 5% of their discretionary income. However, Republican lawmakers have stopped the Department of Education from moving forward while the courts decide.

While the initiative is blocked, borrowers enrolled in the SAVE plan are being moved into forbearance. According to Education Department guidance released Friday, SAVE borrowers won't have to make payments and won't accrue interest on their loans until further notice.

What happens before and after the election?

"The future of the Biden forgiveness plan will remain unknown until the next president is elected," said Elaine Rubin, director of corporate communications for Edvisors and an expert on higher education finance and policy.

As Biden plans to remain in office through the end of his term, the current administration will likely defend its student loan relief programs until a new commander in chief is inaugurated on Jan. 20.

It's tricky to know where student loan forgiveness stands after the election. Vice President Kamala Harris, the expected Democratic nominee, and former President Donald Trump have distinctly different agendas.

If Harris wins, she'll probably continue backing the current student loan forgiveness programs, Rubin said. All the Department of Education statements about the SAVE program refer to the Biden-Harris administration, and Harris has touted its record of delivering relief to those with student loan debt. 

"But she has every right to run her own campaign and modify priorities," Rubin added. 

If Trump is reelected, the situation could substantially change, according to Kantrowitz. Project 2025, a "presidential transition plan" by a far-right think tank, outlines sweeping policy changes to the federal government under a second Trump administration, such as abolishing the Department of Education.

"Project 2025 includes proposals for eliminating many student loan forgiveness programs, including Public Service Loan Forgiveness and the SAVE repayment plan's accelerated forgiveness," Kantrowitz said. Though former Trump administration officials helped draw up Project 2025, the current Trump campaign has distanced itself from the plan.

Trump's running mate, J.D. Vance, has previously expressed his opposition to student loan forgiveness. 

If a new administration challenges existing forgiveness plans, eliminating all debt relief wouldn't be that simple. For example, ending the Public Service Loan Forgiveness program would require an act of Congress, Kantrowitz said. 

And even if the PSLF program is reversed, there could be a way to grandfather in borrowers working toward forgiveness under the plan, said Rubin.

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