Latest news with #PublicServiceLoanForgivenessProgram
The Hill
13-07-2025
- Business
- The Hill
Student loan borrowers navigate new landscape as options dwindle under Trump
Student loan borrowers' options are dwindling and time is not on their side as the Trump administration turns up the heat to get all borrowers back in repayment. The recently passed 'big, beautiful bill' will take the bevy of choices away from borrowers by 2028, leaving only two options for repayment. Those on the Biden administration's Saving on Valuable Education (SAVE) plan who have been in forbearance have even less time, with interest accrual restarting next month. Student loan advocates are encouraging borrowers to reach out for help in understanding their options as they fear many will not be able to afford their monthly repayment plans with the plans left for them. 'It feels like a flood-the-zone type situation where confusion is part of the intent,' said Natalia Abrams, president of the Student Debt Crisis Center (SDCC), adding, 'the hits just keep coming.' The slate of changes rolled out, she said, 'feels reckless in terms of treatment towards student loan borrowers and for Americans at large.' After years of pauses, on-ramps and forbearances from the start of the pandemic in President Trump's first term through the Biden administration, the White House is now requiring all borrowers to begin repaying their loans by the end of Trump's second. The millions of borrowers on the SAVE plan have been in forbearance with no interest since that Biden program was ruled illegal by the 8th U.S. Circuit Court of Appeals last year. The SAVE plan made it so some borrowers had to pay as low as $0 a month. The government said those in the SAVE plan will have to switch to a different option for payments to start counting towards their loan forgiveness, but people can stay in the plan and just pay interest potentially until summer 2026. An analysis from the Student Borrower Protection Center found the typical borrower will pay more than $3,500 in interest charges per year due to the policy change. The decision to switch out of the plan by Aug. 1 or just pay the interest is a personal one. 'Every single borrower's financial situation is so different. For borrowers who are truly unable to afford to make payments, remaining on the SAVE forbearance might be their best option,' said Aissa Canchola Bañez, policy director for the Student Borrower Protection Center. 'But for borrowers who are on the SAVE forbearance' but want to take advantage of the Public Service Loan Forgiveness Program, 'it's been our advice that folks should try to get off of SAVE so that they can begin making payments and begin earning credit towards' forgiveness, she added. Experts also advise those leaving SAVE to wait until the Aug. 1 deadline so the interest is taken care of 'throughout the entire month of July' and a borrower does not get on the hook for it with a new plan, Abrams said. Over the next three years, all borrowers will be forced into the two repayment options that were passed under Trump's 'big, beautiful bill.' The act only leaves borrowers with a standard repayment plan, which includes 10-25 years of repayments depending on the loan amount, and a new Repayment Assistance Plan (RAP), which takes into account a person's income but lengthens the amount of time spent on repayment. RAP is 'based on their income. Low-income borrowers can make payments as low as $10 a month, but unlike past income driven repayment plans, they're going to have to repay on their loans for longer. The span soon will be 30 years … So [the department is] making things simpler, they're trying to make things easier and they're trying to prevent students from being burdened with excessive debt,' said Angela Morabito, spokesperson for the Defense of Freedom Institute. The Trump administration and conservatives argue the policy changes are 'compassionate,' saying borrowers agreed to these loans and have to pay them back. 'No one should be panicking over this. This is a really thoughtful and strategic and compassionate way to try and solve the student loan crisis that the past administration, quite frankly, made so much worse,' Morabito said. 'The fact of the matter is, whenever you take out a loan, no matter what loan it is, you agree to pay it back. Borrowers made that agreement. They need to pay their loans back. They've had a long break, if anything, should make repayment easier that they've had so much time to plan and prepare,' she added. 'But if anyone was under the impression that they would just never have to pay loans back, that's because they were lied to by people who don't have the best interests of students and taxpayers at heart.' Others advocates, however, predict the changes will devastate some borrowers, with more defaults on the horizon and misinformation making it hard to navigate the situation. One of the biggest concerns for borrowers is the backlog of almost 2 million applications for the income-driven repayment programs as the administration pushes students to sign up for these options. The backlog began under the Biden administration, and resumption of application processing only restarted in April of this year. 'The Biden Administration failed to process income-driven repayment applications for borrowers, artificially masking rising delinquency and default rates and promising illegal student loan forgiveness to win points with voters. The Trump Administration is actively working with federal student loan servicers and hopes to clear the Biden backlog over the next few months,' said Ellen Keast, deputy press secretary for the Education Department. Student loan advocates are encouraging borrowers to reach out to nonprofit organizations and the federal government when figuring out their next steps, as scams abound. Even experts on the issue have struggled to understand the new landscape as the federal government said other student loan repayment options will phase out between the summer of 2026 and the summer of 2028, but it isn't clear what those two years will look like for borrowers or when it would be most advantageous for borrowers to leave their current plans. 'Borrowers are feeling so much anxiety right now. The bill makes ginormous changes to our student loan system. It very much feels like there's no clear answer on what borrowers can or should be doing right now,' Bañez said. While those advocating for broader student loan forgiveness don't see much cause for hope under the Trump administration, they were encouraged the GOP legislation did not take away the future possibility of debt relief, potentially under a different administration. 'The only other small silver lining … is they were able to get rid of the piece [in the Senate bill] where they were trying to take away the secretary's ability to cancel student loans or make big changes to the student loan program. That got thrown out in the bird bath and so … [there is] a little bit of hope that we can pull to actually change these very bad policies that have been done' in the future, Abrams said.
Yahoo
26-03-2025
- Business
- Yahoo
Education Department restores IDR student loan applications
(The Hill) — The Department of Education announced Wednesday that access to apply for certain student loan programs has been restored after an almost monthlong pause. The applications were put on pause after a federal appeals court ruled the Biden administration's Saving on Valuable Education (SAVE) income-drive repayment (IDR) plan was illegal. 'A federal appeals court struck down another one of the Biden Administration's illegal efforts to transfer student loan debt to taxpayers. In response, the Trump Administration substantially revised the income-driven repayment plan application to conform with the ruling,' said Acting Education Under Secretary James Bergeron. 'Our team was able to relaunch this application within weeks, ensuring borrowers have access and the ability to access all legal repayment plans,' he added. The American Federation of Teachers (AFT), one of the largest unions of educators in the country, had sued the federal agency over the removal of the plans. Other applications that were blocked besides the SAVE plan included the Public Service Loan Forgiveness Program, a popular IDR plan used by teachers. 'The AFT has fought tirelessly to make college more affordable by limiting student debt for public service workers and countless others — progress that's now in jeopardy because of this illegal and immoral decision to deny borrowers their rights under the law,' AFT President Randi Weingarten said at the time. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
26-03-2025
- Business
- The Hill
Education Department restores IDR student loan applications
The Department of Education announced Wednesday that access to apply for certain student loan programs has been restored after an almost monthlong pause. The applications were put on pause after a federal appeals court ruled the Biden administration's Saving on Valuable Education (SAVE) income-drive repayment (IDR) plan was illegal. 'A federal appeals court struck down another one of the Biden Administration's illegal efforts to transfer student loan debt to taxpayers. In response, the Trump Administration substantially revised the income-driven repayment plan application to conform with the ruling,' said Acting Education Under Secretary James Bergeron. 'Our team was able to relaunch this application within weeks, ensuring borrowers have access and the ability to access all legal repayment plans,' he added. The American Federation of Teachers (AFT), one of the largest unions of educators in the country, had sued the federal agency over the removal of the plans. Other applications that were blocked besides the SAVE plan was Public Service Loan Forgiveness Program, a popular IDR plan used by teachers. 'The AFT has fought tirelessly to make college more affordable by limiting student debt for public service workers and countless others — progress that's now in jeopardy because of this illegal and immoral decision to deny borrowers their rights under the law,' AFT President Randi Weingarten said at the time.
Yahoo
20-03-2025
- Business
- Yahoo
Federal student loan restrictions will disproportionately impact LGBTQ+ adults
LGBTQ+ people are more likely to have student loans and experience economic insecurity, poverty, and disabilities, and Donald Trump's federal student loan restrictions are expected to disproportionately impact them. More than one-third (35 percent) of LGBTQ+ adults ages 18 to 40 — an estimated 2.9 million — held more than $93.2 billion in federal student loans at the beginning of the Biden Administration, according to a new report from the Williams Institute and the Point Foundation, including over half (51 percent) of transgender adults, 36 percent of cisgender LBQ women, and 28 percent of cisgender GBQ men. Through loan forgiveness, new repayment plans, the expansion of the Public Service Loan Forgiveness Program (PSLF), and relief for students with disabilities, the Biden administration approved over $183 billion in student debt relief for more than five million borrowers. Assuming that LGBTQ+ adults received the benefits equally, an estimated 11.6 percent of queer adults with student loans — about 336,000 — benefited from Biden's programs. 'Student loans have been an important bridge out of poverty and towards independence for many people," Jorge Valenica, Executive Director and CEO of the Point Foundation, said in a statement. 'LGBTQ+ individuals have been less likely to rely on family support for meeting the costs of higher education, making federal student loans all the more critical.' Now, the Trump Administration is pushing for changes that would disproportionately impact LGBTQ+ borrowers. This includes ending income-driven repayment plans, as outlined in Project 2025, and replacing them with one that "takes less account of borrowers' finances and imposes no cap on interest," the report states. Trump has also signed an executive order ending the Public Service Loan Forgiveness (PSLF) program, and is expected to sign one attempting to completely shut down the Department of Education, though he can't legally do so. 'The proposed restrictions on student loans will particularly affect the nearly one-quarter of LGBTQ adults employed in the public or nonprofit sectors, which qualify for the Public Student Loan Forgiveness program,' said lead author Brad Sears, Distinguished Senior Scholar of Law and Policy at the Williams Institute. 'A recent executive order could potentially disqualify anyone working for an organization involved in gender-affirming care, or possibly those serving transgender individuals more broadly, from the PSLF program.'
Yahoo
15-03-2025
- Business
- Yahoo
Pastor details taking fight to the Trump administration to get her student loans forgiven. All from her hospice bed
Pastor Eva Steege planned to meet with officials from the Consumer Financial Protection Bureau on February 10 hoping to get $15,000 of student debt forgiven. She was under the nation's Public Service Loan Forgiveness program that is designed to give loan relief to people who participate in public service. In Steege's case she used the money to fund her seminary training. But the day before her meeting, Steege learned that President Donald Trump – with help from Elon Musk and the Department of Government Efficiency – had taken steps to shut down the CFPB - the agency that was supposed to help her with the Department of Education and eliminate the debt. To make matters worse, Steege was battling advanced chronic obstructive pulmonary disease. She was given just six months to live and now lives in hospice care. 'We're caught in the backwash of what Trump is trying to do with the CFPB… [he] wants to reduce waste fraud and abuse, but there's no waste fraud and abuse here,' Steege, 83, and her husband, Ted, told The Independent. Steege, who prior to joining the clergy was a banker, public relations worker and a teacher, is now the sole consumer plaintiff in a lawsuit being brought against the CFPB and Acting Director Russell Vought to challenge the unlawful dismantling of the bureau. The lawsuit, amended last month to include Steege, states that she 'is entitled to discharge her loans under the Public Service Loan Forgiveness Program, and the CFPB was helping her do so.' 'Pastor Steege wants to ensure that she discharges her debt before she dies, so that she will not burden her surviving family, and because she could pass on to her family as much as $15,000 of overpayments,' the suit states. 'Pastor Steege had a meeting scheduled with the was suddenly canceled because of the CFPB's unlawful closure. 'Absent the CFPB's assistance, it is unlikely that she will be able to discharge her debt and get her overpayments returned before she passes away.' Steege joins the CFPB Employee Association, Gupta Wessler LLP, NAACP, National Consumer Law Center, the National Treasury Employees Union, Public Citizen Litigation Group and the Virginia Poverty Law Center in the lawsuit that seeks to halt what the group calls 'illegal actions' by CFPB's appointed and acting officials. The Independent has reached out to the CFPB for comment on the lawsuit brought by Steege and the other parties. Steege had struggled to enroll in a federal loan forgiveness plan, operated through the Department of Education. 'I have friends who have zipped right through the process [of enrolling in PSLF], but it still feels like it's one thing after another that makes this fairly simple thing much more difficult than it needs to be,' Steege told The Independent. 'Add to that, I had a slightly more complicated public service career, but it also feels like they're almost looking for ways that they don't have to do this. I know that's probably not true in the real world, but I can imagine a lot of people thinking, 'Why on earth do they have a reason for stopping this kind of fairly direct, simple request?' 'I put my original request in in 2022 – that's a long time – and I've filled out all the forms nicely and as precisely as I know how. And yet, there's some other weird reason why they can't do this.' It was only last year that she sought help getting into the program through the CFPB – the agency created after the 2008 financial crisis and designed to protect consumers. After an initial meeting in January, she was hopeful that she might finally enroll in the Public Service Loan Forgiveness program, have her loans forgiven and receive a refund. A follow-up meeting was scheduled with CFPB for February 10. That was until Trump and Musk started making their cuts. 'I guess there's an odd feeling. It might be my own, it might not be valid, but it feels like one way or another, they're going out of their way to make this thing worse,' Steege told The Independent. 'One of the Feds' suggestions even was, can you believe it, that maybe my computer wasn't working, and I should go to the library or find some other reason why this wasn't working – that it's somehow my fault.' If the CFPB isn't able to help her, Pastor Steege will spend her final six months 'in great duress, worried that she is leaving her family with a financial burden and without the monetary help to which they are entitled' the suit states. The timing of the suit is somewhat ironic. Trump declared the week of March 2 as 'National Consumer Protection Week 2025.' 'Consumer rights are a cornerstone of American freedom, a building block of the American economy, and a foundation of American success,' a Friday press release from the White House read. 'During this National Consumer Protection Week, we renew our commitment to protecting the American consumer, upholding the right to privacy and transparency, and ensuring the American economy remains free and prosperous.' Ted Steege says that his wife's inclusion in the suit is to show the Trump administration 'the damage being done to ordinary citizens' by the attempt to wipe out the CFPB. He says the suit is not about politics, but about 'finding the justice' for his wife. 'So long as the Trump administration is willing to wipe out that agency entirely, then it means people like us, and there's many thousands of them… who are in the middle of trying to get justice that's due to them, it makes it impossible. He added: 'I certainly don't object to the government administration looking for efficiencies, but this is a very inefficient way of dealing with the needs of taxpayers… Obviously we're not in total poverty, and we will survive, but it's going to be much harder to do that if she's not getting what she deserves under this program.'
