Could Trump repeal PSLF and other student loan forgiveness plans?

Given the questions surrounding the longer term of President Joe Biden’s re-election bid, there’s a increasing possibility that Donald Trump could return to the White House. Although the Biden administration has forgiven greater than $167 billion in student loans over the past 4 years, tens of millions of borrowers are left with student debt. And the longer term of student loan forgiveness and low-interest repayment programs is uncertain.

No major student loan forgiveness plans were repealed during Trump’s presidency. That includes Public Service Loan Forgiveness – a preferred debt relief program that may forgive a borrower’s federal student loans after 10 years of repayment while working for a nonprofit or government organization. Advocacy groups argued that the Trump administration had delayed aid for tens of millions of borrowers and severely limited the effectiveness of existing debt forgiveness programs. And Trump’s Education Department took concrete steps to limit aid, reminiscent of rewriting rules on borrowers’ ability to plead repayment. But by and huge, the federal student loan system – including PSLF and most other major debt forgiveness programs, in addition to income-based repayment programs – remained technically intact.

But which may not be the case during a second Trump administration. Project 2025 – a sweeping conservative policy proposal – calls for modifying, repealing, or repealing plans to forgive federal student loans, including PSLF and debt relief through IDR programs. The Trump campaign has distanced itself from Project 2025, but Trump himself has spoken out against Biden’s student loan forgiveness initiatives through the campaign.

If re-elected, could Trump repeal PSLF and other student loan forgiveness plans? Here’s a breakdown of what could occur.

Administrative changes could affect student loan forgiveness plans

Even without directly changing the foundations or laws governing federal student loan forgiveness and repayment programs, a future Trump administration could still make it harder for borrowers to acquire debt relief.

Project 2025 calls for a comprehensive restructuring of the federal government, including the abolition of the Ministry of Education. “The federal government’s education policy should be restricted and the Federal Ministry of Education ultimately abolished,” says the SuggestionTrump himself has advocated measures that might significantly reduce the dimensions of the federal government’s workforce. Such changes could have a direct impact on federal student loan programs.

Already, the Department of Education and its contract loan servicers are struggling to implement various student loan forgiveness and repayment initiatives, leading to processing backlogs, billing errors, and delayed aid. The dissolution of the department, the lack of staff and related institutional expertise, and a drastic reduction in funding could make it even harder for borrowers to use for and get approved for various student loan programs, including PSLF and IDR — even when those programs technically remain available.

Steps to vary or repeal student loan forgiveness and repayment rules, including for PSLF

A future Trump administration would not less than attempt to handle the goals of the scholar loan system, namely programs implemented primarily through Department of Education regulations.

In the past, Congress has passed laws to ascertain certain student loan programs, but left it as much as the Department of Education to develop regulations to implement those programs. The laws essentially provide general parameters inside which the department can operate, and the regulations then go into rather more detail about how the programs ultimately work.

Trump, as president, probably couldn’t eliminate formal student loan forgiveness or repayment programs with the stroke of a pen. But he could order the Department of Education to draft recent regulations that change or limit how the plans work, or, for certain programs, eliminate them entirely. Drafting and implementing recent regulations takes time (normally a 12 months or two), but that is easily done during a four-year presidential term.

The programs most in danger might be the Saving on a Valuable Education plan and Pay As You Earn. SAVE and PAYE are two IDR plans that were established largely through the regulatory process and base a borrower’s monthly payments on their income. Regardless, SAVE is already facing two serious legal challenges that threaten its future.

The Trump administration would likely not find a way to completely eliminate other programs like PSLF through the regulatory process because PSLF is permitted by a law previously passed by Congress. Similarly, Income-Based Repayment (IBR) is a separate IDR program (different from SAVE and PAYE) created by Congress through laws. However, Trump could direct the Department of Education to repeal recent PSLF regulations put in place through the Biden administration that loosen previous restrictions and make it easier for borrowers to qualify for debt forgiveness.

Congress could repeal PSLF and other student loan forgiveness programs

If Republicans gain combined control of the House, Senate and White House, student loan forgiveness and repayment programs might be at greater risk because Congress could pass laws that goes far beyond regulatory changes.

For the primary two years of the Trump administration, Republicans controlled each the House and Senate, and through that point no laws repealing major student loan forgiveness or repayment programs, including PSLF, was passed. So unified control of Washington brings no guarantee of major legislative changes. But since then, student loan forgiveness has turn into a rather more polarized and partisan issue. Whether a repeal bill can actually pass may depend upon how large the Republican majorities are in each chamber of Congress and whether Senate Republicans should endure a filibuster, which might require a two-thirds majority.

A Republican-led Congress could potentially eliminate popular student loan forgiveness programs, including PSLF and IDR plans, by passing recent laws. Even this 12 months — when Republicans control only the House of Representatives — Republican congressional leadership has introduced a bill that might eliminate student loan forgiveness tied to IDR plans and repeal borrower-friendly debt forgiveness provisions enacted through the Biden administration (though that might apparently remain intact).

A key query for current borrowers is whether or not they can be grandfathered if the present programs were repealed—meaning that any changes going forward would only apply to recent or prospective borrowers. If current borrowers are usually not grandfathered, some advocates say that might provide a basis for legal challenges because those borrowers would have made their decisions in reliance on the continued existence of those programs, lots of which were contractually built into federal student loan promissory notes.

But whether or not borrowers are grandfathered in is ultimately as much as Congress. And if borrowers later file lawsuits, the final result of those lawsuits is ultimately within the hands of the courts.

Conclusion for student loan borrowers

Student loan borrowers are already facing unprecedented uncertainty. The upcoming presidential election is adding much more unpredictability. Even if President Biden wins re-election, certain student loan forgiveness and repayment initiatives—just like the SAVE plan—remain in danger as a result of court challenges.

If Trump returns to office, more student loan programs might be in jeopardy. But the extent of that danger may depend not less than partly on who controls Congress and the way far the White House and Republican leaders are willing to go in restricting student debt relief plans.