What Will Happen with Student Loans if Biden Wins the 2024 Election

President Biden has done more on student loans than any President in history without the aid of Congress. He’s implemented his policies mainly through executive action and consistently increased how big he’s willing to go over time.

For those familiar with the “Dark Brandon” meme, if Biden wins the 2024 election, will we see more bold, politically progressive student loan relief programs in the second Biden term? Or would it be more maintenance of the status quo?

A lot depends on how big the Biden win would be, along with whether or not the Democratic Party wins one or both houses of Congress.

We’ll discuss the various scenarios on student loans if President Biden wins again in 2024.

What has President Biden already done with student loans?

A lot. He’s done the following:

• Established the Saving on a Valuable Education (SAVE) plan (dramatically reducing payments for many borrowers)
• Extended the student loan pause for 2+ years
• Extended the Income-Driven Repayment (IDR) recertification date multiple times (most folks will now recertify for the first-time post-COVID in 2025)
• Discharged a significant amount of debt for borrowers who went to schools that shut down
• Sped up the Borrower Defense to Repayment process
• Chose not to resist Sweet v. Cardona, a case that could lay the groundwork for forgiving a huge amount of student loans (mostly for borrowers who attended for-profit institutions)
• Implemented the Public Service Loan Forgiveness (PSLF) waiver, which counted non-qualified payments toward forgiveness
• Implemented the IDR waiver, which provided forgiveness credit for all borrowers (not just PSLF) and gave credit for long-term forbearance and deferment
• Tried to cancel $10,000 to $20,000 of student loans for most borrowers
• Tried again to cancel an enormous amount of accrued interest for borrowers

That’s not an exhaustive list.

President Trump, in contrast, mostly maintained the student loan status quo, with the very huuuuge exception that he also paused student loan interest and payments in March 2020.

Now let’s talk about how much of Biden's policies above might be at risk if he loses.

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What's at risk if Biden doesn’t win?

Numerous policies would probably get reversed if Biden does NOT win the election.

SAVE plan might change

President Biden’s signature IDR plan would probably be toast if he loses. It's likely that Republicans would try to replace it with their own slightly more generous version of the Revised Pay As You Earn (REPAYE) plan that they previewed in the College Cost Reduction Act.

“Plan B” forgiveness would probably be done for

To be fair, Biden’s Plan B forgiveness might get axed anyway in the courts.

But if Biden loses, the effort to cancel student loan interest and create a hardship discharge process probably goes out the window.

What wouldn't be at risk if Biden doesn’t win?

The good news is that even if Biden doesn’t win, borrowers don’t need to worry about seeing the results of the IDR and PSLF waivers reversed.

Interest subsidies provided on the student loan pause extensions and the SAVE plan would also stick around.

Why?

Simply because servicers wouldn’t have the ability to figure out how to reverse it.

And politically, it wouldn’t be palatable to reinstate something as hated as student loan interest.

Let’s shift gears to what happens if Biden wins in 2024.

Student loan policies that stick around with a Biden win

The following programs are likely secure until 2029 if Biden wins a second term. And because of precedent, they’d likely be secure for much longer than that.

Save plan protected

If Biden wins, he won’t introduce a new student loan repayment plan. The SAVE plan would get adopted by close to 90% of borrowers on an IDR plan, perhaps more.

Many borrowers would still need to switch plans, such as moving to New Income-Based Repayment (IBR) to get forgiveness in 20 years instead of 25, but they wouldn’t need to do that until 2029.

More aggressive discharges

The Biden administration is taking a very different view towards forgiving student loans for students who attended low-quality programs.

The only catch is that they tend to forgive loans only under claims made against for-profit schools instead of uniformly across the board.

But that policy might broaden in a second term.

Borrowers would get discharge applications processed in a far more speedy fashion, and Sweet v. Cardona might pave the way for lots of borrowers to get forgiveness when they attend for-profit schools.

What new student loan policies Biden might try in a second term

If Biden wins, he probably won't issue many new executive actions on student loans.

Instead, I suspect he'd simply work to carry out the programs he’s already put forward.

He could forgive a lot of loans through Plan B forgiveness, but the courts might strike this program down.

If that happens, there’s a chance it would motivate him to make the SAVE plan even more generous, but that’s unlikely since the SAVE plan is already facing lawsuits.

To secure his policy gains, unless Biden has help in Congress to make lasting reforms, he'll probably sign a lot fewer student loan actions in a second term.

But if Congress IS on board, then that changes the analysis. Let’s discuss some scenarios.

Could we see major student loan legislation in a Second Biden term?

The Higher Education Act is long overdue for updating.

But that hasn’t happened in many years due to partisan disagreements on the scope of the federal student loan program.

So, what happens with Congress in the 2024 election will have a ton of impact on whether or not we see student loan legislation that permanently transforms the student loan system.

Here are the two big paths (assuming Biden wins).

Biden wins, but Republicans win one or both Houses of Congress

In this scenario, Biden probably just gets to protect most of what he’s done so far on student loans.

However, borrowers are facing a ticking time bomb in the student loan program that's set to go off in 2026.

Specifically, student loan forgiveness becomes taxable as income once again (excluding PSLF and death/disability discharge).

Biden would need agreement from Congress to extend the tax-free treatment of forgiveness. But Republicans would have very little incentive to say “yes” unless they got significant concessions in exchange.

This might mean that a Biden win without a Democratic sweep could force some kind of legislative agreement.

If that happened, it'd likely involve overhauling the IDR repayment plans and possibly making the SAVE plan less generous. It might also result in a cap on PLUS loans, which could create a funding crisis for many higher cost higher ed programs.

Biden wins, but Democrats keep control of Congress

If this occurred, Biden could extend the tax-free treatment of student loans without any Republican concessions. This would enable him to go bigger on his student loan policies without having to yield any on policies like capping PLUS loans or making IDR plans less generous.

Don’t wait on the 2024 election to lower your payments and interest

Many borrowers don’t realize that even if the SAVE plan is the best plan for most borrowers, you still have to navigate tax strategies like filing extensions, filing separately, and deciding whether or not to get aggressive and pay down your loans or pay as little as possible while pursuing forgiveness.

You need a plan that can cover you regardless of whether or not President Biden wins reelection. We can help. Check out our student loan planning service.