Now that the election is over, student loan borrowers might be wondering how a Trump presidency will affect their student loan debt and repayment plans. It’s worthwhile to take a look at Trump’s previous administration in 2016 for some background.
Christina Randell, President of My Education Solutions, a student loan management firm, had this to say. “Contrary to how the media portrayed Trump before the election, Trump strongly supported the Loan Act of 2007 that offered needs-based student loan forgiveness programs that Congress approved.” When COVID occurred in March of 2020, Trump initiated the CARES Act, which stopped Federal Student Loan repayment while everyone was sent home and many were without work. The Biden Administration continued the CARES Act for 3.5 years until last year when it ended in September of 2023.
What You Should Expect
With Trump’s return to office, student loan borrowers could see significant changes to loan forgiveness and repayment programs. Trump is expected to dissolve the Department of Education, that has been very controversial for over two decades, and move student loan management to the Treasury Department. The Treasury Department currently manages loan issuance and repayment plans for the rest of the government.
Trump has been very critical of the SAVE program, that the Biden Administration created, as being unconstitutional since Congress did not approve the Forgiveness plan, but not of PSLF for Public Service Loan Forgiveness that Congress approved in 2007. PSLF assists those with incomes that are too low to repay their student loans that work in education, military, non-profit, tribal, and government employees.
Trump’s stance is firmly against large-scale forgiveness initiatives to the mass public in lieu of forgiveness plans that are income based the way forgiveness was intended from the 2007 legislation. In addition, Trump is pro alternatives to traditional college education, such as career training and trade programs. He has also been very vocal about challenging the legality of Biden’t programs.
Randell said, “the current status of student loans at this time is that all 44 million borrowers are required to make payments as of October 1, 2024, because CARES Act and the Biden Ramp Up period have ended. If individuals do not make payments their credit can be adversely affected, and even their employers can begin garnishing by the end of the year. The only borrowers that get a temporary break are those individuals that are in the SAVE program because of the Missouri federal Judge and pending litigation.
“The Judge is trying to determine whether it was constitutional for the Biden administration to create plans that Congress didn’t approve. Both sides, Republican and Democrat, have said that they will appeal the decision and take it to the Supreme Court which could take years.”
Under Trump’s administration, SAVE and other affordable income-driven repayment plans could disappear, but is that a bad thing? Why do we need the SAVE program when everyone can use the already approved 2007 Student Loan Act Forgiveness program that works great, according to Randell, who has helped their My Education Solutions Clients save over $52 million dollars to date by using them.
“It’s disappointing that so few people realize they are missing out on Forgiveness because they thought the SAVE program was their only option.”
– Christina Randell, President, My Education Solutions
The future of student loan forgiveness is bright. The industry landscape will look different and it may revert back to pre-Biden days when Forgiveness was needs-based and not an entitlement that the country could not afford. The Trump administration is focused on lowering inflation and building a stronger economy and that is going to mean that student loans repayment will be required again.
If you have questions about SAVE or want to know how you can get into a forgiveness plan, My Education Solutions can help. Contact a reliable student loan debt management advisor at My Education Solutions today. Email Enrollments@MyEduSolutions.com or call 210-812-3200.
My Education Solutions is not a financial institution or affiliated with a financial institution. My Education Solutions does not provide financial services or advice. Our services and products are intended for managing student loans only. Any information provided or transactions conducted through our platform should not be construed as financial advice.
