Will Donald Trump Reshape Student Loan Repayment Plans in 2024? Here’s What You Need to Know

President-elect Donald Trump has consistently criticized the Biden Administration’s student debt forgiveness programs, labeling them as “vile” and “illegal.” With his return to the White House, significant changes to these initiatives are on the horizon.

SAVE Program and REPAYE Under Threat

The Savings on a Valuable Education (SAVE) program, which aimed to cancel up to $20,000 in student loans for eligible borrowers, is one of the most vulnerable programs. Designed to replace the Revised Pay as You Earn (REPAYE) plan, SAVE faced a major setback when the Eighth Circuit Court of Appeals struck it down in August. Efforts by the Biden Administration to revive the program have yielded little success.

If these efforts fail before Trump’s inauguration, the incoming administration is unlikely to challenge the court’s decision, signaling the likely demise of SAVE. Borrowers previously under SAVE may be transitioned to standard repayment plans or income-driven repayment (IDR) plans under REPAYE statutes.

Tightened Eligibility for PSLF and Other Programs

While not all debt forgiveness programs will vanish immediately, their accessibility is expected to decrease significantly. Programs like Public Service Loan Forgiveness (PSLF), Borrower Defense to Repayment (BDR), and various IDRs will likely see stricter eligibility criteria.

BDR, designed to support students defrauded by educational institutions, has been historically volatile, changing with each administration. During Trump’s first term, eligibility tightened significantly, and similar restrictions are anticipated.

PSLF, which forgives loans for borrowers working in public service, is unlikely to be eliminated entirely. However, analysts predict a surge in rejected applications, mirroring the program’s performance during Trump’s initial presidency. While Congress would likely avoid retroactive changes to PSLF, new applicants will face increased scrutiny and stricter requirements.

Timeline for Changes and Future Outlook

The transition to Trump’s administration won’t immediately nullify existing programs but will introduce a gradual overhaul. SAVE beneficiaries are currently in forbearance, awaiting clarity on repayment structures. Similarly, REPAYE and PSLF beneficiaries face uncertainty about the continuity of their benefits.

Debt collection, which paused during the pandemic, was already slated to resume in 2025 under the Biden Administration. Trump’s team is expected to proceed with this plan, though specific implementation details remain unclear.

The rollback of Biden’s programs marks a significant shift in federal student debt relief policy. While some avenues for relief may persist, borrowers will face increased challenges navigating the tightened systems. Despite the expected hurdles, opportunities to alleviate student loan burdens remain. Staying informed and proactive will be critical for borrowers in the coming years. Trump’s return to the Oval Office signals an end to Biden-era student debt relief efforts. However, while the future of these programs appears bleak, hope is not entirely lost. Strategic planning and awareness of updated regulations can still provide pathways for managing student loan debt effectively.