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It's no secret that President-elect Donald Trump is a sworn enemy of the Biden Administration's student debt forgiveness programs. Now that Trump is about to return to the White House, here's what could happen to SAVE, PSLF, REPAYE, and the IDRs.
Throughout his campaign, the Republican candidate constantly denounced student debt forgiveness programs, calling them "vile" and "illegal." Throughout this time, Trump assured that he would eliminate all of these efforts, which could begin to happen as soon as he sets foot in the Oval Office.
It is impossible for all of the Biden Administration's programs to disappear with a stroke of a pen, but those that cannot be canceled immediately will gradually disappear or will have their eligibility rules tightened.
There is no saving SAVE
Through the Saving on a Valuable Education (SAVE) program, President Biden was attempting to cancel up to $20,000 of each eligible borrower's student loans. This plan was meant to replace the Revised Pay as You Earn (REPAYE) program but the Eighth Circuit Court of Appeals shot it down this past August.
The Biden-led White House has made a desperate effort to get the plan back on track with no results so far. Worse yet, if they fail to do so in the coming weeks, the Trump-led Justice Department will no longer take action against the court's decision.
If the forecasts come true, SAVE beneficiaries would be placed on a standard repayment plan or an income-driven repayment (IDR) plan under REPAYE statutes.
Trump Administration to tighten eligibility requirements
While some programs would disappear, systems like PSLF, the IDRs and Borrower Defense to Repayment (BDR), which defends students defrauded by their schools, would be more difficult to access.
BDR in particular changes every time a new administration comes in. In 2017, the system tightened its eligibility rules under Trump's first term, but the Biden Administration made it more accessible.
The same would happen with Public Service Loan Forgiveness (PSLF). Analysts consider it unlikely that Congress will eliminate this program and if it does, it would not apply it retroactively. What will almost certainly happen is that most applications will be rejected, as happened during the first Trump Administration.
When will the changes be made?
The Trump Administration will still take months to recalculate payments and the debts of SAVE beneficiaries. For now, all of them have been put in forbearance, awaiting what will happen with the program. The same is happening to REPAYE and PSLF beneficiaries.
As for the debt collection that was paused during the pandemic, the Biden Administration had already said that it would resume it starting in 2025 and it is very likely that the Trump team will go ahead with the plan. However, there are still no details on how this would happen.
Trump's return to the presidency is the death knell for Biden's programs. However, there will still be some ways for you to ease the burden of your student loan debts. The requirements will be more difficult, but at least there is hope.