What Will Trump's Second Term Mean For Student Loans?

"As the Trump administration gears up to take over the White House in January of 2025, many student borrowers are wondering what comes next," Forbes reports.

..."There’s a strong possibility the SAVE income-driven repayment plan will be struck down by the courts in the coming months. Senior Policy Analyst Megan Walter of the National Association of Student Financial Aid Administrators (NASFAA) adds that borrowers should expect some changes to the availability of forgiveness plans in the coming years. However, she says expected changes to existing programs like Public Service Loan Forgiveness (PSLF) should only apply to new applicants (and not to borrowers already using them).

Walter points out that Trump proposed ending the PSLF program and proposed significant changes to IDR plans as part of broader student loan reforms during his 2016 administration. While these proposals never came to fruition, it's likely there will be renewed calls in the same vein.

For example, Trump proposed consolidating multiple income-driven repayment plans into a single plan in his fiscal year 2017 budget proposal. However, monthly payments on the new IDR plan he suggested would be capped at 12.5% of discretionary income instead of the 10% some plans require now (or the 5% discretionary income for undergraduate loans that applies under the SAVE plan). Trump's suggested proposal also lengthened the loan forgiveness timeline for graduate loan borrowers to 30 years and shortened the term to 15 years for undergraduate loan borrowers."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 12/17/2024

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