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<\/span><\/div>\n<\/div>\n<\/div>\nMany student loan borrowers counting on debt forgiveness are growing increasingly anxious about how the Trump administration might revise existing repayment programs.<\/p>\n
While borrowers eager to have their loans wiped out knew they were losing an ally when former President Joe Biden \u2014 whose administration erased billions in student debt<\/a> \u2014 left office, borrowers still had access to existing pathways to debt cancellation.<\/p>\n To be clear: Borrowers continue to have access to those pathways, namely income-driven repayment and Public Service Loan Forgiveness, or PSLF. However, the administration\u2019s actions over the past few months have many borrowers on edge.<\/p>\n Millions of borrowers are waiting to find out whether the Saving for a Valuable Education, or SAVE, plan will survive \u2014 and what their payments and forgiveness options would be in the likely scenario that it doesn\u2019t. Borrowers in non-profit jobs are worried about the future of PSLF following an executive order focused on limiting the jobs that qualify. And staffing at the Education Department, which is responsible for overseeing any changes to student loan repayment, was slashed earlier this year \u2014 though the layoffs are the subject of an ongoing court case<\/a>.<\/p>\n What are borrowers to do amid so much uncertainty about how they\u2019ll be able to repay their education debt? \u201cDon\u2019t make any panicked decisions based on a headline,\u201d says Betsy Mayotte, president of The Institute for Student Loan Advisors. That\u2019s \u201cthe No. 1 piece of advice I can give.\u201d<\/p>\n Any changes would take a long time to implement, and borrowers should have time to make a thoughtful decision about their options, she says.<\/p>\n That\u2019s because Public Service Loan Forgiveness<\/a> and income-driven repayment are written into statute. And while student loan experts and consumer advocates say borrowers would be smart to expect some changes down the road, it\u2019s important to remember that it would take congressional approval to end either program and a lengthy regulation-making process to introduce substantial changes.<\/p>\n Here\u2019s what to know about your current options for loan forgiveness and how they could change.<\/p>\n Roughly 8 million borrowers enrolled in the SAVE plan have been in forbearance<\/a> since last summer, when a court injunction stopped the Biden administration from fully implementing its marquee repayment plan.<\/p>\n As background, all current income-driven repayment plans set your monthly bills based on what you earn, as well as your family size, and offer loan forgiveness after a certain number of qualifying payments \u2014 typically 20 or 25 years\u2019 worth. But SAVE was significantly more generous than previous iterations: It promised to lower monthly payments and offered faster loan forgiveness for borrowers with smaller balances.<\/p>\n While the court case that paused the plan is still unresolved, most experts agree that borrowers shouldn\u2019t expect SAVE to survive.<\/p>\n “SAVE is sunk. It\u2019s just about who actually puts the headstone up, whether it\u2019s the courts or Congress,” Mayotte says.<\/p>\n When SAVE is officially ended, the millions of borrowers who are in that plan would be moved to a different repayment plan. What that different plan will look like \u2014 and whether it\u2019s a new plan passed into law by Congress or an updated version of an existing plan introduced via regulatory changes \u2014 is still unclear.<\/p>\n Republicans in the House of Representatives are pushing for a major overhaul of the repayment system that they say would encourage borrowers to repay their loans and ultimately reduce the cost to taxpayers. It would offer just one income-driven option that sets monthly bills according to a borrower\u2019s adjusted gross income.<\/p>\n Compared to the SAVE plan, most borrowers would see higher monthly payments under the GOP\u2019s current model. But compared to some older income-driven models, some borrowers could see similar, or even lower, payments. The plan<\/a> also calls for extending the forgiveness timeline, requiring 30 years of payments before any remaining balance is erased. House Republicans included the repayment overhaul in the \u2018big, beautiful\u2019 budget bill<\/a>, which could still change significantly in the Senate. Lawmakers are hoping to pass a final bill by July.<\/p>\n At the same time, the Education Department is focusing on two specific existing plans \u2014 Income-Contingent Repayment and Pay as You Earn \u2014 for regulatory changes through a process called negotiated rulemaking, although officials haven\u2019t released concrete details about potential changes. Any changes introduced after the negotiating sessions likely wouldn\u2019t take effect until next summer at the earliest.<\/p>\n The upshot: There are a lot of moving pieces that could affect what income-driven plans are available and what forgiveness options exist within them for both current and future borrowers. But there aren\u2019t any immediate changes, and the existence of some kind of income-driven plan with a built-in forgiveness clock seems to be safe.<\/p>\n Last month, loan servicers resumed processing income-driven applications after a nearly three-month pause. There is still a backlog of some 2 million<\/a> income-driven applications, per data from the Education Department. But the resumption of applications means you should be able to get into a more affordable plan in the near future if you\u2019re struggling with your bill.<\/p>\n You can use the loan simulator at studentaid.gov<\/a> to see what your payments would look like under different plans. Keep in mind that income-driven plans aren\u2019t your only option if you can’t afford your bill: For shorter-term challenges, you can ask for a forbearance or a deferment. You can also look at whether another payment plan, such as the extended option, would lower your monthly bill enough to make it affordable.<\/p>\n Borrowers who are currently in income-driven plans \u2014 particularly those who are nearing the payment count needed for forgiveness \u2014 should know that the government has paused forgiveness processing under three IDR plans. (They are: SAVE, Pay as Your Earn and Income-Contingent Repayment.) But forgiveness under Income-Based Repayment (IBR) is still open, and payments made on the other plans will count toward forgiveness if you enroll in IBR.<\/p>\n Regardless of what plan you\u2019re on, it\u2019s always a good idea to keep track of your repayment progress so you have a record of what plan you\u2019re on, how much you\u2019re paying and how far you are on the timeline to forgiveness. That\u2019s especially prudent right now, given the likely repayment plan changes that are coming down the pipeline.<\/p>\n Otherwise, there\u2019s not much borrowers can do while they wait to see how things shake out other than stay informed about their options.<\/p>\n Despite Trump\u2019s March executive order<\/a> aimed at limiting eligibility for Public Service Loan Forgiveness, the program remains intact and the jobs that qualify are unchanged.<\/p>\n PSLF, which offers student loan forgiveness<\/a> to people who work in government and non-profit jobs and make 10 years\u2019 worth of payments, is clearly outlined in statute. All 501(c)(3) organizations are eligible employers. So even though Trump has said he\u2019d like to restrict some organizations\u2019 eligibility, and the Education Department has named PSLF as an area of focus for regulatory changes in its upcoming rulemaking session, there’s not much wiggle room in the law. In Congress, the only change that’s been floated is no longer allowing periods during medical residency to count as employment for forgiveness.<\/p>\n Connor Pierce, who advises borrowers as a certified student loan professional with Student Loan Planner, says that borrowers who are somewhere on the 10-year path through PSLF shouldn\u2019t make any drastic decisions based on Trump\u2019s actions so far.<\/p>\n \u201cIf you had a plan and it made a lot of sense before, just stay the course until the dust settles,\u201d he says.<\/p>\n That said, he notes that there are ways the Trump administration could make it harder to access PSLF (and income-driven plans) without any legal or regulatory action. Staffing reductions could trickle down into delays for all kinds of services, including processing applications for repayment plans and approving employment certification forms for PSLF.<\/p>\n Borrowers who are currently enrolled in SAVE should know that these months in the forced forbearance do not count toward the 120 payments they\u2019ll need to qualify for PSLF. Assuming you can afford payments right now, you may want to consider moving to a different income-driven plan. You\u2019ll have to resume monthly payments, but you\u2019ll be actively working toward forgiveness rather than sitting in limbo.<\/p>\n Consumer advocates are also pushing borrowers to download their payment history so they have an up-to-date record of where they are in the PSLF timeline. As with the income-driven plans, borrowers need to prepare to be their own advocate when navigating the system and be persistent when dealing with loan servicers.<\/p>\n Trump Administration Resumes Student Debt Collections for Millions of Borrowers in Default<\/a><\/p>\n Student Loans Will Get (Slightly) Cheaper Next Year Thanks to Lower Interest Rates<\/a><\/p>\n<\/span><\/div>\n<\/div>\n<\/div>\nBorrowers on income-driven plans could see higher payments, longer forgiveness timeline in the future<\/h2>\n
What borrowers on IDR plans can do now<\/h3>\n
Public Service Loan Forgiveness is safe for now<\/h2>\n
What borrowers working toward PSLF can do now<\/h3>\n
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