3 Ways Student Loans Could Be Affected if Kamala Harris Wins the Election
Written by
Adam Palasciano
Edited by
T. Woods
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Student loans have become a hot-button issue since the first student loan payment pause was implemented at the onset of the COVID-19 pandemic. For several years, all federal student loan borrowers had their loans effectively paused with no interest accrued. With rising inflation and an overall higher cost of living, student loan borrowers nationwide rejoiced.
Fast-forward to today, and student loans have resumed for tens of millions of borrowers. At the same time, the Biden administration has successfully implemented student loan forgiveness for some.
CNBC reported that Vice President Kamala Harris is proud of her and President Biden’s work to forgive $167 billion in student debt for nearly 5 million Americans to date.
In addition, the Biden Administration created the new SAVE income-driven repayment (IDR) student loan repayment plan. It offers a path to student loan forgiveness in as little as 10 years and borrowers with an annual income of $32,800 or less qualify for a $0 monthly payment.
However, AP reported Republican-led states are standing in the way of the SAVE plan.
Republicans Are Attempting to Block the SAVE Plan
In a ruling on July 18, the 8th Circuit Court of Appeals granted a motion for an administrative stay filed by a group of Republican-led states looking to cancel the Biden administration’s entire student loan forgiveness program.
“Today’s ruling from the 8th Circuit blocking President Biden’s SAVE plan could have devastating consequences for millions of student loan borrowers crushed by unaffordable monthly payments if it remains in effect,” explained Education Secretary Miguel Cardona in a recent statement. “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.”
The court’s order effectively prohibits the Biden administration from implementing the parts of the SAVE plan that were not already blocked by lower court rulings, such as a reduction in a faster path to forgiveness and reducing income-based monthly payments from 10% of a borrower’s discretionary income to 5%. The Department of Education is assessing the ruling and will keep borrowers currently enrolled in the plan informed of new developments.
However, if Harris is elected president this November, more student loan forgiveness and reforms could be coming.
Here are three ways student loans will be affected if Harris wins the election, according to Business Insider:
1. There Could be More Targeted Student Loan Forgiveness for Certain Groups
Harris has a record of championing student loan forgiveness for those defrauded by predatory for-profit schools. Her administration will aim to continue the Biden administration’s current policies to fight for student loan forgiveness who were deceived.
2. The Second Attempt at Broad Student Loan Forgiveness Could be Passed
After the Supreme Court struck down the Biden administration’s first attempt to implement broad student loan forgiveness of up to $20,000 per borrower, there’s now a second attempt at broader student loan forgiveness in the works. The new plan is expected to benefit over 30 million borrowers and includes canceling up to $20,000 in unpaid interest coupled with relief for borrowers who have been in repayment for at least 20 years. A possible Harris administration would likely fight for the passage of this new plan.
3. Harris Might Push the College for All Act
In 2017, Senator Bernie Sanders introduced the College For All Act. If passed, students at community colleges and four-year public institutions making up to $125,000 a year would be able to attend tuition-free. Harris supports this initiative and could take action to help push this bill through Congress.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out What a Trump Presidency Would Mean for Student Loans.
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