President-elect Donald Trump’s victory last week should bring some clarity to Americans with student loans, but probably not in the way they were hoping for.

A wave of Biden administration initiatives and court rulings against them have left millions of borrowers uncertain about their future payments. In fact, many federal student loans are stuck in limbo, with no monthly payments, because the company servicing them can’t determine how much the payments will be.

Trump has made clear his dislike of student debt relief, saying it’s unfair to borrowers and taxpayers who pay their debts in full. Adding further uncertainty, Trump has said he would like to eliminate the Department of Education — which oversees student loan policies — a goal shared by many Republicans.

Ultimately, the Biden administration’s efforts to ease the debt burden are likely to be swept away in the near term. President Biden successfully canceled a huge amount of debt for a large number of borrowers during his term – approx. $175 billion in aid for nearly 5 million borrowers. But the pendulum is about to swing the other way.

Here’s a look at where Biden’s major student debt reduction initiatives stand:

Current Debt Relief Programs

In July 2023, the Ministry of Education launched the first elements of its Save on a Valuable College Reimbursement Plan reduce payments and cancel low federal student loan balances more quickly. Like many other repayment plans, TO SAFEGUARD allows borrowers to pay 10% of their discretionary income each month for 20 to 25 years, at which point their remaining balance would be forgiven.

But it increased the amount of income considered non-discretionary by 50%, immediately reducing monthly payments and waiving all interest accrued while the borrower remained current. And from July 2024, it was planned to significantly reduce payments, down to 5% of discretionary income.

By mid-2024, 8 million borrowers had joined the SAVE plan. That’s when seven Republican attorneys general filed suit. On August 9, the 8th Circuit Court of Appeals issued a decision temporarily block the entire plan. In other words, no payment cuts, no loan forgiveness.

The Department of Education did not have the authority to so dramatically expand the scope and cost of loan forgiveness — a 3,000 percent increase, according to the panel — according to a unanimous three-judge panel. without explicit instructions from Congress.

Assuming the Trump administration abandons the SAVE plan, borrowers enrolled in it will have to move to a different repayment plan with significantly higher monthly payments. In one example provided by the department, a single borrower earning $40,000 a year and owing $45,000 would see their payments increase from $60 in the SAVE plan to $151, $227 or $349, depending on the plan chosen.

However, the committee’s decision did not only affect the SAVE plan. The 8th Circuit’s decision also questions the legal basis for loan forgiveness in two other income-driven plans: Reimbursement based on income And Pay according to your income. A future administration could rule that these borrowers still owe their outstanding balances, with interest, even after making the required number of monthly payments.

These borrowers could move to other repayment plans whose legal basis for loan forgiveness has not been challenged, even though doing so could increase their costs.

The Department of Education is no longer allowing borrowers to sign up for ICR and PAYE plans, but they can still sign up for SAVE – even though monthly payments have been suspended. at least until April 2025according to the National Assn. student aid administrators. Department of Education says loans are forgiven will not generate interestbut neither will they come any closer to forgiveness.

The decision did not affect the Public Service Loan Forgiveness program, which extinguishes the loan balances of borrowers who work in government agencies or certain types of nonprofit organizations for 10 years, nor the plans for Income-driven repayments, which cancel loans after 20 to 25 years. payments (based on when the borrower signed up).

Trump sought to eliminate the civil service pardon plan during his first term, but it would take an act of Congress to do so. The same goes for income-driven repayment plans, which have the same statutory foundation: the College Cost Reduction and Access Act, which President George W. Bush signed into law in 2007.

Global loan waiver proposal

Shortly after the United States Supreme Court thrown away Biden’s original proposal to offer global forgiveness of up to $20,000 in student debt, the Department of Education has begun work on a smaller proposal to general debt relief and debt reduction. The proposed rules would have forgiven the debts of borrowers who had been making payments for at least 20 to 25 years and erased interest-related debts for some borrowers, but like the SAVE plan, they were challenged by seven Republican attorneys general, who argued that the department had exceeded its authority.

A federal judge in Georgia temporarily blocked the rules two days after the lawsuit was filed. When that order expired, a federal judge in Missouri I blocked it again.

Republican Missouri Attorney General Andrew Bailey summarized the plaintiffs’ argument against debt relief. in a tweet: “This is a HUGE win for every American who won’t have to pay off someone else’s Ivy League debt,” Bailey wrote.

As with the dispute over the SAVE plan, the Department of Education should stop defending the proposed rules under the Trump administration. He is also not expected to support a second element of the new forgiveness plan that is still being developed: a rule allowing the department to forgive debts when borrowers are in difficulty. financial difficulties and most likely to default within two years.

Loans already canceled or modified

Experts say borrowers whose loans have already been forgiven will not be affected by the Trump administration’s changes. Additionally, many borrowers enrolled in the Public Service Loan Forgiveness program have moved significantly closer to completing their payments, thanks to accounting adjustments ordered by the Biden administration.

These adjustments, which included providing some borrowers with credit for years spent in forbearance, were made in the name of correcting what the administration characterized as recordkeeping errors, mismanagement and predatory practices by companies that service federal student loans.

The same adjustments were applied to other income-driven repayment programs, bringing these borrowers closer to loan forgiveness. The 8th Circuit’s decision, however, casts doubt on whether PAYE and ICR program borrowers will ultimately be eligible for debt forgiveness.

The possible end of the Ministry of Education

The president cannot kill a federal ministry unilaterally. This would require an act of Congress, as well as considerable work to determine which tasks would be taken on by other agencies and which would be left to the states.

Abby Shafroth, co-director of advocacy for the National Consumer Law Center, said moving management of the loan programs to the Treasury Department “would likely be significantly disruptive to borrowers, simply because of the logistics of making this change.” But any changes to their rights or reimbursement options, she said, would depend on policy changes brought about by new laws or rules.

Natalia Abrams, president and founder of the Student Debt Crisis Center, said the biggest concern is the shift from an administration concerned about the burden of student debt to one that does not. She said her organization and other nonprofits meet regularly with officials from the Biden and Obama administrations to get updates on student loans, but only once with the Trump administration.

Noting previous proposals from GOP leaders and conservative think tanks, Abrams said Republicans have shown interest in overhauling loan programs and eliminating debt forgiveness options, “which would not than keeping people in student debt for decades to come.”