What the Election Results Mean for Student Loan Cancellation: 4 Key Takeaways
Results are still being tabulated in many states following one of the most important midterm elections in recent memory, and neither the House nor the Senate has yet been convened for either the other of the parties. But the Democrats seem to have exceeded expectations in many state and national races.
Here’s what the election results mean for student loan forgiveness and for student borrowers in general.
Young voters – potentially motivated by student loan forgiveness – played a role in election results
In the weeks leading up to the election, there was an ongoing debate about whether President Joe Biden’s sweeping student loan forgiveness initiative – which could forgive up to $20,000 in student loan debt for 40 million borrowers — would be to prove unpopularleading to a backlash against Democrats at the polls.
But those concerns, based on preliminary election results, may not have been well founded. Younger voters showed up at the pollsapparently in large numbers (at least in several key races), which was potentially enough at swing close races to the Democrats.
“Young people won this election” tweeted the Sunrise Movement, an advocacy organization for young Americans, on Wednesday. “From voting to leading huge GOTV operations, young people have pushed [Pennsylvania Democratic candidate for Senate John] Fetterman on the edge. Fetterman’s apparent victory could help Democrats retain control of the Senate (though the outcome of several other key Senate races remains undetermined at this time).
It’s too early to tell whether student loan forgiveness played a critical role in the youth vote or in Democratic victories. But polls Conduct over the past few years has tended to show fairly consistent support for a broad student loan forgiveness initiative, like the one Biden officially announced in August.
Congress unlikely to repeal student loan exemption
Congress is still up for grabs, as neither Democrats nor Republicans have yet won enough races to claim a majority. The results are much narrower than many predicted, and a so-called “red wave” seems not to have happened.
Given that neither party is likely to end up with a decisive advantage in Congress, a repeal by Congress of any existing student loan forgiveness initiative seems highly unlikely in the near term. If Democrats retain control of at least one house of Congress, any legislation repealing a student loan forgiveness initiative is highly unlikely to pass. If Republicans overthrew both the House and the Senate, they would likely still be well short of the two-thirds majority that would be needed to override a President Biden veto.
Biden likely to continue to rely on executive action to implement student loan forgiveness initiatives
While narrow majorities in Congress by either political party greatly reduce the chances of legislative repeal of student loan forgiveness programs, it also decreases the chances that Congress will be able to pass a hard-hitting legislation on student loan forgiveness or other reforms that could have a lasting impact for borrowers. (such as changes to the bankruptcy code).
This means that President Biden will likely continue to rely on executive action and the regulatory process to expand student loan forgiveness and implement other relief for borrowers.
The administration is still in the process of implementation of limited PSLF waiver, which operated as a temporary extension of the civil service loan cancellation program. Although the waiver ended in October, the Department of Education continues to process PSLF applications.
The Department of Education is also starting to roll out the IDR account adjustment, a broad, action-based executive initiative that will advance the progress of millions of borrowers toward loan forgiveness under income-contingent repayment (IDR) plans, regardless of their current repayment plan. the borrower. The IDR account adjustment will also effectively extend many of the benefits of the limited PSLF waiver for borrowers working in the civil service who may have missed the October deadline.
The Biden administration is also implementing new regulatory changes PSLF, Disability Releases, Borrower Defense Program until Repayment, Student Loan Interest Capitalization, and IDR programs, including establishing a new IDR plan (and potentially more affordable). These changes should begin to take effect next summer.
Federal courts may have final say on Biden’s one-time student loan forgiveness plan
Biden’s Unique Student Loan Forgiveness Initiative was blocked by a federal appeals court last month in response to a legal challenge brought by a coalition of Republican-led states. The states had filed a lawsuit challenging the plan as illegal and arguing that implementing student loan forgiveness would negatively impact state revenue.
The lawsuit was dismissed by a federal district court judge, but the states then appealed to the 8th Circuit Court of Appeals, which imposed a temporary administrative stay while it considers a more lasting preliminary injunction. The temporary stay remains in force until this court renders a decisionwhich is expected any day now that the elections are over.
The results of the midterm elections would have no direct impact on the 8th Circuit’s decision whether to lift the suspension and allow the loan forgiveness program to continue. And the 8th Circuit’s ruling likely won’t permanently end the legal battle over Biden’s student loan forgiveness plan, because the losing side may appeal to the United States Supreme Court.
Twenty-six million borrowers have already submitted applications for student loan forgiveness, according to senior administration officials. The online application portal stay active.