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Two Different Visions of the Future of Student Loans
By: Phoebe Kranefuss · October 16, 2024 · Reading Time: 4 minutes
As usual, the economy will be one of the top issues driving voters to the polls in November. But for the 43 million Americans with student debt, the choice between Vice President Kamala Harris and former President Donald Trump could have a major impact on one of the most significant bills that lands in their mailboxes every month.
The average student loan borrower owes around $40,000, which can translate into a minimum payment of hundreds of dollars per month. Chances are that you or someone you know is well-acquainted with those bills. And college just continues to get more expensive; one year of private college tuition currently costs around $40,000 on average and the interest rate on federal student loans (6.53%) is at its highest point in 15 years.
As such, it’s no surprise that roughly 30% of Americans with student debt say that their loans will have a major influence on their vote in the 2024 presidential election, according to a May 2024 study by Bankrate. So, let’s take a look at where the two major presidential nominees stand on this issue.
Stark political differences
Harris and Trump have articulated profoundly distinct perspectives on student loans and debt relief. In keeping with the posture of the current administration, Harris and her running-mate Governor Tim Walz have expressed support for student loan forgiveness and other measures to make higher education more affordable, including the expansion of income-driven repayment plans and the Public Service Loan Forgiveness program. (It’s worth noting a 2023 Supreme Court decision blocked President Biden’s debt cancellation proposal and a federal court injunction has blocked the SAVE Plan since July 2024.)
Republicans are generally opposed to the prospect of student debt forgiveness, characterizing it as fundamentally unfair to those who paid off their student loans. In 2023, after the Supreme Court blocked Biden’s first attempt at student loan forgiveness, Trump expressed support for the decision, arguing that the proposal would be “very unfair to the millions and millions of people who paid their debt through hard work and diligence,” as reported by CNBC. That noted, Trump did provide some modest student debt relief during his presidency, according to the Hill. But he has been generally opposed to the type of universal forgiveness programs that have been at the center of the Biden administration’s efforts.
The Harris/Walz track record on student loans
- Since 2020, the Biden-Harris administration has forgiven approximately $170 billion in student loans through Income-Driven Repayment plans and loan forgiveness under the SAVE plan, according to The Hill.
- In 2023, Governor Tim Walz signed the Nurse and Patient Safety Act, which includes a loan forgiveness program for nurses and other healthcare practitioners in Minnesota.
- In August 2022, the Biden-Harris administration proposed a program that would have forgiven up to $20,000 in loan debt per borrower for those below a certain income threshold. This proposal was struck down by the Supreme Court.
- As Attorney General, Harris instigated a lawsuit to compensate students who were defrauded by Corinthian College. In 2023, the Biden-Harris administration announced that students who took out federal loans to attend institutions owned by Corinthian would be forgiven, per the US Department of Education.
The Trump/Vance track record on student loans
- During his presidency, Trump proposed a policy to eliminate subsidized federal student loans, cut student aid, and eliminate Public Service Loan Forgiveness (PSLF) programs.
- In 2024, Vance introduced legislation (with two Democratic co-sponsors) that would excuse parents from student loans taken on for a child who became permanently disabled.
- In 2022, Vance posted on X: “Forgiving student debt is a massive windfall to the rich, to the college educated, and most of all to the corrupt university administrators of America. No bailouts for a corrupt system. Republicans must fight this with every ounce of our energy and power.”
- Trump’s 2021-22 budget proposal included cuts to federal student aid programs as part of a $5.6 billion cut to the Department of Education (though federal funding for K-12 education actually increased by about 2%).
Next steps for people with student loans
Student loans are but one of many vital economic issues that will impact the coming election. And it’s clear that Harris and Trump have vastly different positions on numerous issues in addition to student loan debt. But the future of student loan policy will have a perceptible impact on the daily finances of millions of Americans.
The president can’t unilaterally control the student loan landscape, as proven out by the 2023 Supreme Court’s decision to curb Biden’s debt cancellation plans and the federal court injunction currently blocking the SAVE Plan. Still, the next president will undoubtedly influence the future of student loans.
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