Student Loan Under Donald Trump: As President Joe Biden’s time in office comes to a close, major changes are on the horizon for the approximately 40 million Americans with federal student loans.
With President Donald Trump taking office, his stance on student debt relief differs significantly from the Biden administration’s approach, leading to the potential end of certain programs, including the Saving on a Valuable Education (SAVE) plan.
Given that several of the student loan forgiveness programs introduced under the Biden administration are likely to be canceled, borrowers must prepare for potential changes to their repayment options. Here are a few things to keep in mind as the landscape shifts.
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During President Trump’s first term, nearly all applicants for Public Service Loan Forgiveness (PSLF), about 99%, were turned down. According to Theguardian, Over the four years he was in office, the total student loan debt grew from just over $1.4 trillion in 2017 to nearly $1.7 trillion by the time he left office.
Under President Biden, around 4.4 million borrowers received $166.5 billion in student loan forgiveness. Trump’s transition team has reportedly been considering ways to quickly end the student debt relief programs that Biden pushed for.
What Student Loan Borrowers Should do
Although many relief initiatives might be altered or discontinued, some programs will likely remain in place. One that is expected to continue is the Public Service Loan Forgiveness (PSLF) program.
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This program, which helps federal employees and nonprofit workers get rid of their student loans after 10 years of qualifying payments, was established by President George W. Bush in 2007 and is safeguarded by law. Therefore, it would require congressional action to remove it.
Betsy Mayotte, president of the Institute of Student Loan Advisors, pointed out in a recent interview that while the SAVE plan could be phased out, alternatives still exist for those needing help with loan repayment.
Other Repayment Options
Even if the SAVE plan is no longer available, there are other repayment plans to consider. Options like Pay as You Earn (PAYE), and Income-Contingent Repayment (ICR) offer flexible repayment terms based on your income and family size. These plans could significantly lower your monthly payments and may even result in loan forgiveness after a set number of years. According to the U.S. Department of Education, these plans will remain available until at least July 1, 2027.
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For borrowers facing financial hardships, there are still ways to pause or reduce their loan payments. Special programs like deferments and forbearances can offer temporary relief. For instance, if you lose your job, you may qualify for an unemployment deferment. There are also specific deferments available for situations such as military service, graduate fellowships, or medical treatment for serious health conditions like cancer.
While the new administration’s policies will likely lead to changes, borrowers still have access to various options that can help ease the burden of student loan repayment.
