The Biden administration has forgiven a record amount of federal student debt. But in about two months, President-elect Donald Trump, a vocal critic of student loan forgiveness polices, will enter the White House.
Under Trump, the U.S. Department of Education is likely to abandon its efforts to deliver wide-scale student loan relief, experts say.
But what about the millions of people who’ve already had their debt excused over the past four years?
“I’ve been getting a lot of emails from borrowers concerned that President Trump could claw back their forgiveness,” said higher education expert Mark Kantrowitz.
Since President Joe Biden took office, the Education Department has canceled the federal student loans of nearly 5 million people, totaling $175 billion in relief, according to the White House.
It has done so mostly by improving existing student loan relief programs that had long been plagued by problems, including the Public Service Loan Forgiveness initiative and income-driven repayment plans.
Those borrowers should be in the clear, experts say.
“Any regulatory changes must be prospective only,” meaning that eliminations to loan forgiveness programs would only impact new borrowers, explained Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that helps borrowers navigate the repayment of their debt.
“They aren’t allowed to change regulations retroactively,” she added.
For that reason, even borrowers who have been pursuing forgiveness under an income-driven repayment plan or a program like PSLF, but have not yet received that relief, may be safe.
The terms of a loan, which are spelled out in the Master Promissory Note federal student loan borrowers sign when they take out the debt, can’t be change in the middle of repayment, experts said.
In June, U.S. District Judge Daniel Crabtree in Wichita, Kansas, described student loan forgiveness as having an “irreversible impact,” in his decision to block one of the Biden administration’s relief measures.
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The retraction of student loan forgiveness is incredibly rare, Kantrowitz writes in a recent article in The College Investor.
For example, in February, some borrowers saw their debts reinstated under the Public Service Loan Forgiveness program. Yet that only occurred because the debt cancellation was granted through an error, and the borrowers were not yet eligible for the relief.
“Don’t worry,” Kantrowitz said. “The president does not have the legal authority to reinstate forgiven loans.”
Still, borrowers should keep a record of the notices they’ve received about their forgiven debt, and any loan documents showing a $0 balance, Kantrowitz said.
In a new report, the Consumer Financial Protection Bureau cites, among the errors reported by student loan borrowers, “balance reinstatements,” in which a loan servicer tacks a loan balance back on to one’s account.