Student Loan Borrowers: Prepare for Changes Under the New Administration
As President Joe Biden’s term comes to an end, the country’s 40 million federal student loan borrowers should be prepared for changes to their debt repayment plans. With President-elect Donald Trump taking office, borrowers may face a shift in student loan forgiveness policies, including the potential demise of the Saving on a Valuable Education (SAVE) plan.
Understanding Relief Options
Despite the uncertainty surrounding the SAVE plan, borrowers can still explore other relief options. The Public Service Loan Forgiveness (PSLF) program, signed into law by President George W. Bush in 2007, is likely to remain intact. This program allows certain not-for-profit and government employees to have their federal student loans canceled after a decade of payments.
Income-Driven Repayment Plans
The U.S. Department of Education has reopened two student loan repayment plans, the Pay As You Earn Repayment Plan and the Income-Contingent Repayment Plan, which set monthly bills based on income and family size and lead to debt forgiveness after a certain period. These plans will be open for enrollment until July 1, 2027.
Deferments and Forbearances
Borrowers facing financial struggles may still be able to access deferments and forbearances under the Trump administration. Options include unemployment deferments, economic hardship deferments, and other lesser-known deferments.
Staying Informed
To navigate the changing landscape, borrowers should:
- Check their loan status to ensure accuracy
- Stay updated on correspondences regarding their loans
- Ask their servicer for the latest information on qualifying payments made towards loan forgiveness
- Keep detailed records of loan repayment progress and current balance
- File complaints with the Education Department’s feedback system or Federal Student Aid’s ombudsman if issues arise
By taking these steps, borrowers can prepare for the changes ahead and ensure they receive the relief they’re entitled to.
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