Trump Presidency and Student Loan Programs: What’s at Risk?
As President Donald Trump reclaims the White House and Republicans gain control of Congress, concerns arise about the future of various student loan programs.
Programs like the SAVE plan and the Biden administration’s bankruptcy policy are now in jeopardy, according to experts.
House Budget Committee Republicans are proposing cuts to student loan programs, raising fears among consumer advocates.
With Trump’s past comments on student loan relief, borrowers are uncertain about the future of debt forgiveness initiatives.
Over 40 million Americans hold federal student loans, with a total debt exceeding $1.6 trillion, as reported by higher education expert Mark Kantrowitz.
Here’s a look at the programs that experts believe face the most risk under the new administration.
SAVE Plan: Will It Survive?
The SAVE plan, launched in 2023 by the Biden administration, aimed to provide an affordable repayment option for federal student loan borrowers.
However, legal challenges have stalled the plan, with Republican attorneys general opposing it.
Experts suggest that the Trump administration may dismantle the plan during a potential second term, affecting millions of borrowers.
Enrollees in the SAVE plan are currently in limbo, awaiting a resolution to the legal issues surrounding the program.
Bankruptcy Protections at Risk
President Biden’s efforts to make student loan debt dischargeable in bankruptcy court may be reversed by the Trump administration.
Consumer bankruptcy attorney Malissa Giles remains optimistic about retaining the updated bankruptcy guidelines, despite concerns about shifting political landscapes.
Uncertainty looms over the future of student loan bankruptcy cases, with potential changes in jurisdictional approaches based on political alignments.
Other Student Loan Aid in Jeopardy
House Budget Committee Republicans are considering repealing parts of the Borrower Defense regulations and Public Service Loan Forgiveness.
Proposed reforms could limit eligibility for these programs, impacting borrowers seeking debt relief.
Additionally, the elimination of the student loan interest deduction is on the table, affecting millions of taxpayers who benefit from the tax break.