As the Trump administration prepares to take office, there is uncertainty surrounding the future of student loan policies that could impact millions of borrowers. Unlike President Biden, President-elect Trump has not prioritized student loan forgiveness as a policy agenda.
During his first term, Trump proposed ending a program that provides student loan forgiveness to public sector workers after 10 years. Additionally, his administration attempted to limit debt relief for borrowers who were misled by their colleges. Although these efforts were unsuccessful, they left many borrowers in limbo.
One of the key issues at stake is Biden's SAVE repayment plan, currently on hold due to litigation. The plan offers generous terms for low-income borrowers, including monthly payments as low as 5% of discretionary income and debt cancellation after 10 years of payments.
The Trump administration could decide to rescind the SAVE plan or stop defending it in court. Additionally, there are discussions about creating a new income-driven repayment plan and eliminating existing ones, although such changes would require congressional action.
Efforts by the Biden administration to cancel significant amounts of student loan debt have been met with legal challenges. However, Trump has not indicated plans to reverse the debt forgiveness already granted, which could face legal hurdles.
Trump's administration may also address the Public Service Loan Forgiveness program, which cancels remaining student loan debt for public sector workers after 10 years of payments. While Trump called for phasing out this program, it would require congressional action to dissolve.
Furthermore, Trump's administration made unsuccessful attempts to limit the borrower defense to repayment program, which provides debt relief to students misled by their colleges. The future of this program remains uncertain.
Overall, the Trump administration's approach to student loan policies could have far-reaching implications for borrowers. As legal battles continue and policy decisions are made, borrowers are advised to stay informed about potential changes that may affect their student loan repayment options.
