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How A Trump Presidency Signals Higher Student Loan Bills


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President-elect Trump has made clear he wants to eliminate the Department of Education, which oversees student loan policies.


Student loan borrowers should expect higher monthly payments amid Trump’s second presidency. This move is likely to undermine the Biden administration’s efforts toward loan relief.

President Biden had many initiatives toward student loan forgiveness, although most faced legal hurdles that blocked implementation. Despite this, many borrowers also had their loans left in limbo as court rulings against them continued. Given the circumstances, service providers had no choice but to pause payments until they received more legal clarity.

However, President-elect Trump has made clear he wants to eliminate the Department of Education, which oversees student loan policies. Moreover, Trump has stated his dislike for student loan relief plans. He emphasized its unfairness for those who paid off their loans, per the Los Angeles Times.

Given Trump’s stance on the matter, the current steps toward loan forgiveness and relief are likely to be scrapped. Those plans, which include the Save on a Valuable Education (SAVE) option, Pay-As-You-Earn (PAYE), and Income-Contingent Repayment (ICR) plans, will continue to endure legal blocks.

The SAVE plan currently has eight million borrowers in forbearance. However, the 8th Circuit Court of Appeals blocked its rollout after seven Republican state attorney generals sued.

If Trump axes the program altogether, those borrowers will have to choose another repayment plan. The switch would likely come with a higher monthly cost as well. Moreover, the Department of Education will stop pursuing its less expansive draft rules for debt reduction under the new President.

Fortunately, those with student loans already forgiven or modified will experience less impact from Trump’s impending policies. However, those inching close to total loan forgiveness in the PAYE or ICR programs could face issues down the line as Trump enters his second term.

The actual end of the Department of Education will take more than an executive order. Its entire overhaul would require considerable work, specifically in duty reallocation.

Despite this, some analysts deem that the more pressing issue for borrowers is to live under a presidency that is less concerned with reducing student loans. This shift would inevitably lead to more years in debt, with significantly fewer options for relief.

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