Here’s What You Should Do Immediately
The Trump administration recently had their upcoming budget proposal reviewed, and what’s inside does not look good for many student loan borrowers.
President Trump and Education Secretary DeVos have indicated that they want to upend both the Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) programs going forward, with the first salvo now being fired.
According to a leaked preliminary budget from the Department of Education, Trump plans to completely eliminate the Public Service Loan Forgiveness Program (PSLF) going forward. This could potentially affect millions of student loan borrowers and over a hundred billion dollars in loan forgiveness.
The potential impact of such a change cannot be understated; approximately 20% of the workforce works in jobs that would currently be eligible for PSLF. The GAO estimates that under the current program, the government is on pace to forgive $108 Billion in loans through this program. Under the new budget, it is unclear what will happen to the 550,000 student borrowers currently in the PSLF program.
This budget also seeks to combine all current federal repayment programs into a single Income-Based Repayment (IBR) plan going forward, consistent with Trump’s earlier campaign promises regarding student loans.
Here’s what eligible borrowers interested in PSLF should do at this point:
Borrowers who think they are currently eligible for this program but have yet to enroll need to take immediate action, including:
- Ensuring that they are currently enrolled in a Direct Federal Loan program
- Certifying their employment
While taking these steps doesn’t guarantee to get into the PSLF program prior to the law change, it should greatly increase the odds that eligible borrowers can still take advantage of this program’s benefits while the window of opportunity is still open.
What exactly will happen to borrowers currently in the program is anyone’s guess at this point. However, according to the promissory notes signed by all PSLF borrowers prior to their release of funds, they are entitled to take advantage of the program’s benefits as long as they continue to adhere to all eligibility and repayment requirements. Attempting to overturn this could be a major legal issue for the DOE and a huge political problem for the Republicans and President Trump.
We can only hope that these borrowers are allowed to continue to enjoy these agreed-upon benefits going forward.
In our opinion, this action taken against Public Service Loan Forgiveness by the Trump administration will only serve to further the student loan crisis if it is indeed passed into law.
We will continue to keep you up-to-date on all developments in this area and how they might affect your student loans going forward.