Today, Donald Trump takes office as the 47th President of the United States, marking the return of a Republican administration to the White House. This transition signals the potential rollback of several key policies enacted under President Biden, with student loan debt relief likely among the first to face significant changes. For the approximately 43 million Americans burdened by student loan debt, uncertainty looms as the new administration takes charge.
More than 5 million people in the US have aided under Biden’s presidency due to his student loan forgiveness push, namely the proposals he spearheaded that resulted in reduced monthly payments or complete debt forgiveness.
Now that his presidency has ended and the conservative right is back at the helm, what does that mean for student loan borrowers that are drowning in debt?
Dr. Sonia Lewis, founder of student loan debt consultancy The Student Loan Doctor, says that now is the time to get informed…and quickly.
What are some immediate changes that could happen?
It can be daunting thinking about the shifts that could take place under new leadership, namely under a different political party but Dr. Lewis says it’s important to stay calm.
“Take some time to put some context around what’s likely to happen because it’s easy to get scared about what you don’t understand,” she tells ESSENCE. “First, you want to make sure you are aware of the options you’re eligible for.”
She says that one of the most important facts to keep in mind is that repayment support options won’t be completely done away with, just lessened. This could also happen within weeks.
“We already see that happening,” she explains. “Lenders are telling you by mail that your payments are going to start sooner than what Biden has said they would. So we’re looking at repayments starting around March or April.”
She advises borrowers to check StudentAid.gov for up-to-date information on total debt owed and due dates. Then cross referencing that insight with your lender.
Some support programs could go away — but there’s hope
One of the aims for Biden’s student debt relief program was to allocate funding to resources dedicated to helping borrowers lessen their debt. Under Trump’s presidency, those efforts could likely be undone, but not everything is going to go away according to Lewis.
“There are some programs like Public Service Loan Forgiveness and Borrowers Defense that are still active,” she says. “But just to offer a larger context, some programs were created through the Department of Education which Trump has pledged to dismantle. Other programs were created through Congress like Public Service Loan Forgiveness. This can’t be fractured as easily as a program like Borrowers Defense or TEPSLF, Temporary Expanded Public Service Loan Forgiveness, which allows you to go back from October 2007 to October 2022 to get some credit.”
She advises borrowers to look at the fitting requirements for those programs and consider applying.
“Don’t count yourself out.”
The SAVE program will likely be repealed
Lawsuits have blocked Biden’s SAVE plan progress, the income-driven repayment (IDR) plan Saving on a Valuable Education (SAVE) in June 2024, which left more than 8 million federal student loan borrowers enrolled in limbo.
Lewis says it’s important to remember that the parameters set by the Biden administration could change in just a few weeks, namely payment due dates.
“The program is likely to be rolled back, but that won’t happen until Biden is out of office, not before,” she explains. “Trump will make that known very soon.”
She notes that as of October, Borrowers enrolled in the SAVE plan were informed that they do not need to make payments after the Department of Education placed those accounts in an interest-free forbearance while legal decisions were made–which were likely to take at least six months.
However, that could shift once Trump takes office. The hold is also due to be lifted soon.
“It’s coming off in two months,” she says. “So, what we’re telling borrowers to do is to pivot to the PAYE Plan, pay as you earn, or the Income Based Repayment Plan, IBR.”
The difference between the two is that PAYE is for newer loans. You’ll be able to pay 10% of their discretionary income for loans that are consolidated or considered new loans after July 1, 2014. I see a large number of people being eligible, especially if they’re more newly consolidated. But if they have older loans, they would have IBR eligibility, which is at a 15% repayment.”
She advises borrowers to, again, stick closely to StudentAid.gov to stay abreast of updates.
“Lenders change all the time and the information on their sites can be unreliable sometimes,” she explains. “Staying informed can help you reach your debt repayment goals.”