3 Student Loan Forgiveness Programs That Could Survive Under Trump — With Caveats

With Donald Trump set to return to the White House in just six weeks, student loan borrower advocacy groups and allies are sounding the alarm about student loan forgiveness and relief programs being under threat. But some programs may be easier for the incoming Trump administration to eliminate than others.

Earlier this week, a coalition of advocacy organizations and elected officials, including Senators Bernie Sanders (D-VT) and Ed Markey (D-MA) held a press conference calling on President Joe Biden to use his remaining six weeks in office as a final push to enact as much student loan forgiveness as possible. This would include implementing discharges for hundreds of thousands of borrowers who have already been approved for relief, but have yet to receive it.

Advocates for borrowers are concerned because Trump administration officials have already signaled their intent to try to roll back several Biden administration student loan forgiveness and relief initiatives. This would include Biden’s “Plan B” student debt relief program as well as the SAVE plan, both of which are currently tied up in court. And rollback efforts would also probably include Biden’s new hardship student loan forgiveness plan, which hasn’t even been finalized yet.

But despite the very real concerns of some student loan borrowers and advocacy groups, at least some student loan forgiveness programs may be a bit more secure.

Differences Between Regulatory And Statutory Student Loan Forgiveness Programs

First, it’s important to note the differences between student loan forgiveness programs that were established through a regulatory process, versus those that were created via an act of Congress.

Federal law can delegate authority to federal agencies to create new rules and regulations under existing statutes. Through this process, agencies like the U.S. Department of Education can tweak or expand programs by following procedures governing the creation of new regulations, without direct Congressional involvement. The department has relied on this process to create a number of student loan forgiveness and relief programs such as the SAVE plan, Plan B student loan forgiveness, and hardship student loan forgiveness. The department has also used this process to create more generous terms for other existing student loan forgiveness plans.

These regulatory programs can be changed, tweaked, or even repealed by a future administration, without necessarily involving Congress (hardship student loan forgiveness hasn’t even been finalized yet, so that would be particularly easy for the Trump administration to nix). To change or repeal regulations, a federal agency would need to go through the same formal process that was used to create the regulations in the first place. This takes time, and going too far, acting arbitrarily, or harming people can sometimes provide a basis for legal challenges.

But, it’s generally easier to change regulations than it is to change federal statutes, because lawmakers in Congress don’t have to create and pass new legislation. Federal statutes are created by Congress through legislation that must be approved by the House and the Senate, and then signed by the president. And typically, it would require an act of Congress to repeal a statute that a prior Congress had approved.

Statutory Student Loan Forgiveness Programs

Several student loan forgiveness programs were established through legislation passed by Congress. These include:

• Public Service Loan Forgiveness, or PSLF, which can wipe out the federal student loan debt for borrowers who work at least 10 years for qualifying nonprofit or public sector employers while meeting other program criteria.
• Income-Based Repayment, or IBR. This is an income-driven repayment plan that allows borrowers to make payments using a formula applied to their income and family size, with any remaining balance forgiven after 20 or 25 years. IBR is similar to the SAVE plan, but its terms are less generous.
• Total and Permanent Disability, or TPD, discharges. This is a program that can wipe out the federal student loan debt for borrowers who are unable to engage in substantial, gainful activity due to a medical impairment.

Because these student loan forgiveness programs were established by Congress, they cannot be repealed through the regulatory process. It would take new legislation by Congress to eliminate these programs.

With complete Republican control of the House, Senate, and White House, full repeal of any of these programs is at least a theoretical possibility. But successful repeal is very far from guaranteed, for several reasons. Republicans hold very narrow majorities in both chambers, particularly in the House — leaving little to no room for defections, assuming Democratic lawmakers would remain united in opposition. The Senate filibuster, which requires 60 votes to break, could also serve as a barrier to repealing these programs, unless Republicans in the Senate eliminate the filibuster (which is unlikely) or are able to bypass the procedural barrier through the budget reconciliation process. In addition, it’s important to note that prior attempts to repeal these programs, particularly PSLF — all of which failed — would have grandfathered in current borrowers.

Other Administrative Barriers To Statutory Student Loan Forgiveness Programs

Nevertheless, the incoming Trump administration could take unilateral steps to make accessing these statutory student loan forgiveness programs more difficult.

For example, a Trump Education Department could take steps to repeal recent regulations that eased access to some of these programs. This could include new rules creating a PSLF Buyback option and an expansion of what constitutes qualifying payments or qualifying PSLF employment, as well as regulations that eliminated post-discharge income monitoring for the TPD Discharge program. The Trump administration could also pass regulations imposing new restrictions on these programs, although Trump transition officials have not indicated publicly that they have any concrete plans to do so. Any such restrictions could be subject to legal challenges, depending on the specifics.

In addition, the Trump administration could cut funding, staffing, or both for Education Department programs. This could lead to slower processing of student loan forgiveness applications and less oversight over federal student loan servicers, which typically administer these programs. That, in turn, could lead to delays, erroneous determinations, and other problems that could serve as very real barriers to accessing these loan forgiveness programs, even while they technically remain legally intact.

The bottom line is that federal student loan forgiveness programs don’t all fit in the same bucket. Some may be more secure than others, depending on how they were enacted. Borrowers will just have to wait and see how everything plays out over the next few years.