Topline:
In recent months, the Trump administration has taken actions that could significantly affect federal student loan borrowers, including the more than 3.8 million Californians with student debt. Experts say borrowers should be vigilant — but they should also keep in mind that many of the administration’s proposed changes have not gone into effect.
Why it matters: The flurry of action at the federal level might compel borrowers to falsely believe that some payment plans and forms of relief are no longer available.
All is not lost: Even though the president issued an executive order to deny debt relief to public servants whose work he’s deemed “illegal,” eligibility for the Public Service Loan Forgiveness (PSLF) program has not changed. Also, although a Biden-era repayment plan remains unavailable due to pending litigation, borrowers can apply for the Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) plans.
What to know: If students are enrolled in PSLF, IBR, PAYE or ICR, college affordability advocates encourage borrowers to keep making their payments. They also suggest that all borrowers go to studentaid.gov, make sure their contact information is up-to-date and to verify the name of their student loan service providers.
Document everything: Advocates also recommend that borrowers take screenshots of all their information and keep it in a secure file. They also say it would be wise to download student loan data, along with copies of master promissory notes (the contracts to get loans).
Go deeper: Republicans plan to overhaul the federal student loan system. Here's what to know
Read on ... for details about the information you'll need as policies change.
Starting this week, the Trump administration will resume collections on defaulted student loans. This means the Department of Education’s office of Federal Student Aid can take funds from borrowers' tax refunds, Social Security benefits and wages.
I have federal student debt. What Trump administration changes affect me?
Given this change, what should you keep an eye on if you have federal student debt? Experts say that if you have student loans, it’s time to be vigilant.
For this guide, LAist reached out to multiple college affordability advocates, and heard back from spokespeople for:
- EdTrust
- The Institute for College Access & Success
- The National College Attainment Network, and
- The Student Borrower Protection Center
What federal changes are in motion?
In recent months, the Trump administration has taken actions that could significantly affect federal student loan borrowers, including more than 3.8 million Californians.
After moving to dismantle the Department of Education, the president issued an executive order that aims to deny debt relief to public servants whose work he’s deemed “illegal,” including those who provide aid for undocumented immigrants or gender-affirming care.
The administration also announced that the country's $1.6 trillion student debt portfolio will be transferred from the Education Department to the Small Business Administration. Both agencies are facing mass layoffs.
All the while, 8 million borrowers have been in limbo because of lawsuits against Saving on a Valuable Education (SAVE), a Biden-era repayment plan that offered low monthly bills and promised not to let original balances build up due to unpaid interest. Those borrowers’ payments have been on pause for months.
What to do if you have federal student debt
Know your current situation. If you haven’t taken a good look at your debt recently, the college affordability advocates said it’s time to go to studentaid.gov, make sure your contact information is up-to-date, and verify the name of your student loan servicer. (It may have changed.) Jessica Thompson, senior vice president at the Institute for College Access & Success, also recommends taking screenshots of all your information and keeping it in a secure file.
If the Trump administration succeeds in making the changes it has called for, “there's going to be a lot of movement and shuffling and reprogramming,” Thompson said. “We're very concerned that customer service is not going to be up for this task because of the cuts that have been made at the Department of Education.”
Borrowers need to have records. Document how much you owe and how much you’ve paid, in case anything goes awry. If you are in an income-driven plan or working toward Public Service Loan Forgiveness (PSLF), be sure to document that too, Thompson said.
Victoria Jackson, assistant director of higher education policy at EdTrust, suggests borrowers download their data file, along with copies of their master promissory notes (the contract to take out student loans).
Be sure to stay in good standing. The federal government is reporting delinquency, Thompson added, which can affect your credit score. “If you are looking at a [bill] that you can't afford, call your servicer and see what's possible for you,” she said.
Focus on current policy, not on what might happen
MorraLee Keller, a spokesperson for the National College Attainment Network, said borrowers should “stay on top of any changes that Congress may make,” without letting political headlines derail them.
For instance: Aissa Canchola Bañez, policy director at the Student Borrower Protection Center, underscored that despite President Donald Trump’s executive order, PSLF eligibility has not changed. “Only an act of Congress can end this program or fundamentally change it in any way,” she added. “So keep making your payments, so you can stay on track toward that relief.”
Also, although the SAVE plan remains unavailable, borrowers can apply for the Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) plans.
“Every federal loan borrower has the right to tie their monthly payment to their income and to see cancellation after 20 or 25 years,” Canchola Bañez said. “Ensuring that folks know that these are resources that are still at their disposal is very important."
