Student Loan Forgiveness: What’s Next Under Trump Presidency?
With the Biden administration forgiving a record amount of federal student debt, borrowers are now wondering what’s next under the incoming Trump presidency. As a vocal critic of student loan forgiveness policies, President-elect Trump is likely to shift the focus away from wide-scale student loan relief.
Will Borrowers Lose Their Forgiveness?
Experts reassure that borrowers who’ve already had their debt forgiven over the past four years are likely in the clear. Regulatory changes can only be prospective, meaning they’ll only impact new borrowers. Existing loan forgiveness programs, such as Public Service Loan Forgiveness and income-driven repayment plans, will continue to protect borrowers who’ve already received relief.
Protecting Borrowers’ Rights
The terms of a loan, outlined in the Master Promissory Note, cannot be changed mid-repayment. This means borrowers pursuing forgiveness under income-driven repayment plans or programs like PSLF, but have not yet received relief, may also be safe.
Rare Cases of Retraction
While rare, student loan forgiveness retraction can occur. In February, some borrowers saw their debts reinstated under the Public Service Loan Forgiveness program due to an error. However, experts emphasize that the president does not have the legal authority to reinstate forgiven loans.
Borrowers: Keep Records
To avoid any potential issues, borrowers should keep records of notices about their forgiven debt and loan documents showing a $0 balance. The Consumer Financial Protection Bureau has reported errors, including balance reinstatements, where loan servicers incorrectly add a loan balance back to an account.
The Future of Student Loan Forgiveness
As the Trump administration takes office, the focus may shift away from student loan forgiveness. Borrowers who’ve already received relief can breathe a sigh of relief, but those still seeking forgiveness may face uncertainty. One thing is clear: the importance of keeping accurate records and understanding the terms of their loans.
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