What a Biden presidency could mean for America's student-loan debt crisis

• President-elect Joe Biden's higher education plan aims to provide more federal government support to student borrowers.
• Biden's $750 billion education plan would make undergraduate education free in certain circumstances and expand college federal loan programs.
• He has also recommended giving every student borrower $10,000 in coronavirus relief.
• Experts say America can't wait for the Biden presidency to begin in January, because the current federal student loan pause is set to expire on December 31.

America's $1.5 trillion student-loan debt crisis has exploded over the last decade, especially as two historic recessions have hobbled the financial prospects of the millennial generation before its oldest members have turned 40.

Even before the pandemic, the Student Borrower Protection Center (SBPC) told Business Insider, "millions of Americans with student loans were struggling to get by, faced with mounting debt and a broken student loan system."

The pandemic may have put as many as 10 million student-loan borrowers out of jobs, higher education expert Mark Kantrowitz told CNBC. And while federal student loan payments have been paused until the end of the year, borrowers with private student loans still have to pay them.

For the past four years, President Donald Trump has focused on pre-college education by promoting school choice and making charter schools more accessible. In 2020, he provided student-debt relief by suspending federal payments, but what might that relief look like under President-elect Joe Biden?

Biden's proposed higher-education policies would expand federal government support for education beyond high school. The $750 billion plan would make undergraduate education free in certain circumstances and expand college federal loan programs.

Biden has also promised to appoint an educator as secretary of education.

While still proposals at this stage, Biden's plan to tackle student debt focuses on making the cost of college more affordable and providing pandemic relief for student borrowers. Here's what it might mean for you.

What would pandemic student-loan debt relief look like?

Currently, borrowers with a federal government-owned student loan don't have to make payments and have a 0% interest rate, thanks to the student-loan relief extension that President Donald Trump approved as one of four executive actions in August.

But that relief left out 9 million student-loan borrowers, the SBPC previously told Business Insider, and it didn't extend all the student-loan provisions of the CARES Act (the $2.2 trillion stimulus package passed in March). It's also set to expire on December 31.

That leaves a gap between the relief expiration date and Biden's Inauguration Day on January 20. America can't wait for a Biden presidency for more student-loan relief action, Persis Yu, National Consumer Law Center attorney and director of NCLC's Student Loan Borrower Assistance Project, told Business Insider.

"With coronavirus cases spiking and the holiday season right around the corner, borrowers cannot afford to wait for a change in administration to extend the federal student loan payment suspension," she said. "Borrowers need the current administration and congress to do its job and give borrowers the financial security they need to continue to keep themselves and their families safe amidst this ongoing pandemic."

In a letter sent on October 28, 77 advocacy groups urged the US Department of Education to extend the federal student loan pause until September 30, 2021. Supporters say an extension will bring financial support to financially burdened households, while critics say it comes at a taxpayer cost and that those experiencing hardship already have access to student loan relief.

Biden has recommended providing $10,000 of student-loan debt relief per borrower as a form of coronavirus aid, according to Unity Task Force recommendations. But whether the Biden administration will do this on its own or work with Congress, says the Washington Post, remains to be seen.

What would student-loan forgiveness look like?

Biden's coronavirus student-loan relief recommendation is just one aspect of a lengthy higher-education plan intended to lift the weight of student-loan debt for current and future borrowers.

Here are some of the key highlights from Biden's higher-education plan, according to his website and his Unity Task Force recommendations from July 2020:

• Free tuition for up to four years at a public college or university if your family's income is below $125,000 and for up to two years if you attend a private minority-serving institution or community college.
• Student loan forgiveness of $10,000 on federal loans for every year if you work in a public service job (like teaching or working at a non-profit) for up to five years for a total of $50,000.
• A revised income-driven repayment plan for federal loans where you only pay 5% of your discretionary income compared to the current 10% to 20% and where monthly payments are $0 if you make less than $25,000. After 20 years, this debt will be canceled tax-free.
• Doubling Pell Grants, which are currently worth up to $6,345 for students who demonstrate financial need.
• Allowing private student loan holders to discharge their loans into bankruptcy.

But as with the $10,000-per-borrower coronavirus aid, it's unclear how these proposals would be implemented once he takes office.