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For almost 15 years, Trygve "Spike" Magelssen says he faithfully paid down his student loans each month, slowly chipping away at the original debt of $53,000, even as medical bills, a home improvement loan and other costs left him "financially up against a wall."
Then in late 2018, Magelssen, an associate professor of electrical technology at Montana State University-Northern, wondered if he might benefit from Congress' temporary expansion of the so-called Public Service Loan Forgiveness program. Public servants, including teachers, health care workers and law enforcement, can apply under certain requirements, and must make 10 years' worth of payments before the loan's remaining balance can be erased.
But after contacting a federal student loan office for help, Magelssen learned that his past payments could not count retroactively. Furthermore, even if he enrolled, he realized he could pay off the remainder of his debt in less time than it would take to meet the 10-year threshold.
"It was a dead end," said Magelssen, 62, whose current student loan debt is about $21,500, consisting mainly of interest.
For student borrowers like Magelssen, who missed out on applying or may have qualified if they had known about the program sooner, they're hoping that the next administration under President-elect Joe Biden will throw them a financial lifeline while protecting their interests, particularly during a pandemic that has left millions of Americans jobless or underpaid.
These borrowers may get their wish.
Biden has said he would tackle loan forgiveness for public servants by providing $10,000 of student debt relief for every year of service, up to five years. That includes working in a school, for the government or in a nonprofit setting. Student borrowers would be automatically enrolled, according to his plan, and previous "national or community service" would also allow a borrower to qualify.
The nation's 45 million student borrowers carry an estimated $1.7 trillion in student loan debt — less than total mortgage debt but higher than credit cards, according to the Brookings Institution, a Washington-based think tank.
"It should be done immediately," Biden told reporters last week about his student loan forgiveness plan.
But he did not commit to other Democrats' demands for a more expansive student loan forgiveness program or even complete debt cancellation as part of his broader higher-education agenda.
During a news conference Tuesday, Senate Minority Leader Chuck Schumer, D-N.Y., urged Biden to issue an executive order once he takes office to begin his proposal for student debt relief.
"Higher education should be a ladder up," Schumer said. "Student debt is an anchor around the ankles of these kids."
Schumer, along with Sen. Elizabeth Warren, D-Mass., and other Democrats, have outlined a plan for Biden to take immediate action once he becomes president, including using executive authority to ensure there is no tax liability for federal student loan borrowers.
Some economists and policymakers have questioned the benefits to the economy if student debt is forgiven and how the Biden administration would pay for its cost, which is anticipated to be in the billions.
Also uncertain is whom Biden will name to replace Betsy DeVos as head of the Education Department. Meanwhile, student borrower advocates say if Republicans maintain control of the Senate, a divided Congress could derail efforts for substantial student loan reforms or make it harder for Biden to reverse certain policies enacted under the Trump administration.
A report issued this week by student loan experts and advocates entitled, "Delivering on Debt Relief," argues that the approaches — administrative action or legislation — are not mutually exclusive and will depend on the circumstances and the specific debt relief programs the Biden administration will try to reform.
Student advocacy groups say the Public Service Loan Forgiveness program needs sweeping changes. A 2019 Government Accountability Office report found that the Education Department under DeVos had rejected a staggering 99 percent of applications as part of the expanded loan forgiveness program.
"These programs are broken," said Seth Frotman, the executive director of the Student Borrower Protection Center, a consumer advocacy group that worked on the report. "They're broken because of incompetencies at the Department of Ed or because of rampant illegal practices by for-profit colleges and predatory schools. An incoming Biden administration, at its most basic function, has the chance to improve the lives of millions of people."
Biden says he also supports forgiving student debt owed by those who were defrauded by for-profit colleges.
DeVos was criticized for hiring several industry insiders and for freezing Obama-era regulations that would have increased protections for students. But the Education Department has defended its actions, saying those hired were "highly qualified" and recused themselves when necessary.
Theresa Sweet, a student borrower from the Bay Area who was the lead plaintiff in a 2019 lawsuit against DeVos, said Wednesday that she had lost faith in an Education Department that she believed was supposed to be protecting students' interests.
Her lawsuit, brought by attorneys with the Project on Predatory Student Lending at Harvard Law School, alleges that DeVos illegally stalled a program known as borrower defense to repayment, a 1990s-era regulation that was expanded under the Obama administration and says borrowers who are cheated by their schools are eligible for federal loan forgiveness.
But after a settlement agreement in April, in which DeVos admitted no wrongdoing but pledged to adjudicate the program promptly, the Education Department began issuing blanket denials to student borrowers — setting up an ongoing legal dispute that may finally end under the next administration.
The Education Department did not immediately respond to a request for comment Wednesday after a judge ruled that student borrowers won't have to make applicable loan payments until the case is resolved.
Sweet, a nursing assistant, said the Biden administration must ensure the law is enforced as it's written.
"If whoever the next DOE secretary is doesn't come out swinging for borrower defense, I feel like we're still going to have to fight," she added. "And I will keep fighting until this situation receives some measure of justice."