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What The Election Results Mean For Student Loan Forgiveness: 4 Key Takeaways

Results are still being tabulated in many states following one of the most consequential midterm elections in recent memory, and neither the House nor the Senate have been called for either party yet. But Democrats seem to have outperformed expectations in many state and national races.

Here’s what the election results mean for student loan forgiveness, and for student loan borrowers in general.

Younger Voters — Potentially Motivated By Student Loan Forgiveness — Played a Role in Election Outcomes

In the weeks leading up to the election, there was an ongoing debate about whether President Biden’s sweeping student loan forgiveness initiative — which could cancel up to $20,000 in student loan debt for 40 million borrowers — would prove to be unpopular, leading to a backlash against Democrats at the polls.

But those concerns, based on preliminary election results, may have been unfounded. Younger voters showed up at the polls, seemingly in high numbers (at least in several key races), which was potentially enough to swing close races towards Democrats.

“Young people won this election,” tweeted the Sunrise Movement, an advocacy organization geared towards the interests of younger Americans, on Wednesday. “From voting to leading enormous GOTV operations, young people pushed [Pennsylvania Democratic candidate for Senate] Fetterman over the edge.” Fetterman’s apparent victory may help Democrats maintain control of the Senate (although the outcome of several other key Senate races remains undetermined at this time).

It is too early to know whether or not student loan forgiveness played a critical role in the youth vote or in Democrat victories. But polls conducted in the last several years have tended to show fairly consistent support for a broad student loan forgiveness initiative, like the one Biden formally announced in August.

Congress Unlikely to Repeal Student Loan Forgiveness

Congress is still up for grabs, as neither Democrats nor Republicans have decisively won enough races yet to claim a majority. The results are far narrower than many had predicted, and a so-called “red wave” appears to have not occurred.

Given that neither party is likely to end up with a decisive advantage in Congress, a Congressional repeal of any existing student loan forgiveness initiatives appears to be highly unlikely in the near term. If Democrats maintain control of at least one chamber of Congress, any legislation repealing a student loan forgiveness initiative is highly unlikely to pass. If Republicans flip both the House and the Senate, they would likely still be significantly short of the two-thirds majority that would be required to overrule a veto by President Biden.

Biden Likely to Continue To Rely on Executive Action to Implement Student Loan Forgiveness Initiatives

While slim Congressional majorities by either political party significantly reduces the chances of legislative repeal of student loan forgiveness programs, it also diminishes the chances that Congress would be able to pass any impactful student loan forgiveness legislation or other reforms that could provide 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 opportunities and implement other relief for borrowers.

The administration is still in the process of implementing the Limited PSLF Waiver, which operated as a temporary expansion of the Public Service Loan Forgiveness program. Although the waiver ended in October, the Education Department is continuing to process PSLF applications.

The Education Department is also starting to roll out the IDR Account Adjustment, a sweeping executive action-based initiative that will advance millions of borrowers’ progress towards loan forgiveness under income-driven repayment (IDR) plans, regardless of a borrower’s current repayment plan. The IDR Account Adjustment will also effectively extend many of the benefits of the Limited PSLF Waiver for borrowers working in public service careers who may have missed the October deadline.

The Biden administration is also implementing new regulatory changes to PSLF, disability discharges, the Borrower Defense to Repayment program, student loan interest capitalization, and IDR programs, including establishing a new (and potentially more affordable) IDR plan. Those changes should start becoming effective next summer.

Federal Courts May Have Final Say on Biden’s One-Time Student Loan Forgiveness Plan

Biden’s one-time 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 implementation of student loan forgiveness would negatively impact state revenues.

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 effect until that court issues a ruling, which is expected any day now that the election is over.

The midterm election results would not have any direct impact on the 8th Circuit’s decision on whether to lift the stay and allow the loan forgiveness program to proceed. And the 8th Circuit’s ruling will probably not definitively end the legal battle over Biden’s student loan forgiveness plan, as the losing party may appeal to the U.S. Supreme Court.

26 million borrowers have already submitted student loan forgiveness applications, according to top administration officials. The online application portal remains active.

Further Student Loan Forgiveness Reading

Already Applied For Student Loan Forgiveness? 6 Key Updates

Court’s Block On Student Loan Forgiveness Continues, But There’s A Big Update

When Will You Receive Student Loan Forgiveness? Key Details On Timing

A New, Bigger Student Loan Forgiveness Initiative Is Set To Launch — And It’s Not The One That You Think