Biden doesn't want to fight for 50,000 student loan relief. It's too hard

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Thread title needs to be changed to…

Biden Tried To Help You With Your School Loans…But Your Dumbass Voted For Trump…

Thread title is accurate based on the article posted.

 

[DC_Dude]

What Could the Proposed Federal Budget Mean For Student Loan Borrowers?​

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KEY TAKEAWAYS​

• As the government nears its March 14 budget deadline, a Republican budget resolution moved one step closer to being passed.
• The resolution calls for $4.5 trillion in tax cuts and a reduction of $2 trillion in federal spending. The $330 billion of that is directed to be cut by the House Education and Workforce Committee.
• A proposal to follow the directed cuts would eliminate higher education tax benefits, increase monthly loan payments, and eliminate student loan and grant programs.

The House passed a budget blueprint that could increase monthly student loan payments and eliminate critical student protection programs.

As the government approaches its March 14 deadline to pass a federal budget, a Republican budget resolution, which calls for $4.5 trillion in tax cuts and $2 trillion less in federal spending, was narrowly passed late Tuesday.1 The plan includes directing the House Education and Workforce Committee to cut $330 billion in the next 10 years. The committee oversees elementary, secondary, and postsecondary programs.

"The American people have been clear that they want to end wasteful government spending. This budget resolution delivers on that promise while providing relief to working families, students, and small businesses," Tim Walberg (R-MI), Education and Workforce Committee chairman, said in a statement.

Experts said that to save that much, the House committee would likely have to cut tax benefits for students, scale back key grants and loans or rework student loan repayment and forgiveness programs.

What's On The Chopping Block?​

A document reportedly released by the House Ways and Means last month outlined some student loan and grant programs the committee could possibly cut to reach its savings goal.2

Reporesentatives could eliminate tax benefits for higher education students and borrowers, such as the American Opportunity Tax Credit (AOTC), the Lifetime Learning Credit (LLC), and tax deductions of interest on student loans. In addition, one proposal would make all scholarship and fellowship income taxable.

The new budget could also repeal former President Joe Biden's Saving for a Valuable Education (SAVE) plan and eliminate other income-driven repayment (IDR) plans. Instead, borrowers would only have two repayment options: a standard repayment or a new IDR plan.

Officials at The Institute For College Access and Success (TICAS) said that reworking the income-driven repayment plans is likely going to be part of the plan to cut spending because of the high target amounts. Recently, the Department of Education closed applications for those plans.

House Republicans proposed a new IDR plan last year that would increase borrowers' monthly payments by almost $200 on average, according to The Institute For College Access and Success (TICAS) analysis.3

"Borrowers are just in a really tough spot, and we know a lot of folks are already struggling to afford monthly payments even under a more affordable plan, and so any increase in monthly payment expectation is going to be hard for a lot of folks," said Michele Zampini, senior director of college affordability at TICAS.

In addition, the proposal suggested reforming Public Service Loan Forgiveness (PSLF), "including limiting eligibility for the program."

Pell Grants could be reformed by capping grants at the median cost of attendance or expanding eligibility to short-term credential programs, which the nominee to head of the Department of Education said she would support.

The critical loan programs that allow parents to share the cost of higher education, PLUS and grad PLUS loans, could also be eliminated as part of the budget cuts.

 

[DC_Dude]

Personal Finance

Trump administration removes student loan repayment applications from Education Dept. website​

Published Thu, Feb 27 20252:48 PM EST

Annie Nova
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Key Points

• The Trump administration has taken down the applications for popular student loan repayments plans from the U.S. Department of Education’s website.
• Here’s what borrowers need to know about the disruption.

Students walk through the University of Texas at Austin on February 22, 2024 in Austin, Texas.
Brandon Bell | Getty Images
The Trump administration has taken down the applications for popular student loan repayments plans from the U.S. Department of Education’s website, leaving millions of borrowers with fewer options for now.
Borrowers are unable to access the applications for income-driven repayment plans, as well as the online application to consolidate their loans.

Both applications are critical for borrowers pursuing lower monthly payments and loan forgiveness through an IDR plan, as well as the related Public Service Loan Forgiveness program.
The disruption is due to a recent decision by the 8th Circuit Court of Appeals that blocked the Biden administration’s new IDR plan, known as SAVE, or Saving on a Valuable Education, as well as the loan forgiveness component under other IDR plans.
Congress created IDR plans in the 1990s to make borrowers’ bills more affordable. The plans cap borrower’s monthly payments at a share of their discretionary income, and cancel any remaining debt after a certain period, typically 20 years or 25 years.
More than 12 million people were enrolled in the plans as of September 2024, according to higher education expert Mark Kantrowitz.
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Here’s what to know about the changes.

Applications could be down for ‘a few months’​

The IDR plan applications shouldn’t be down for too long, Kantrowitz said.
“I expect it will be temporary, lasting a few months while they make changes,” he said.
The Education Department is likely tweaking the applications to make sure all their plans comply with the new court order, as well as removing the SAVE plan all together.
The Education Department did not immediately respond to CNBC’s request for comment.
Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit, also didn’t expect a long wait time before the applications return.
“I get the sense the ED is working hard to get the changes made,” Mayotte said.

Impacts of the plans going dark​

Unfortunately, there’s nothing federal student loan borrowers who want to sign up for an IDR plan or switch between the plans can do right now, Kantrowitz said.
Borrowers who are due to recertify their IDR plans will also have to sit tight for the time being, Mayotte said. (Those enrolled in IDR plans typically have to submit their income information annually.)
While the legal challenges against SAVE were playing out, the Biden administration put enrollees into an interest-free forbearance. That payment pause is likely to end soon, experts said. By then, borrowers should be able to access other IDR plans, though.
Those who graduate in the spring are typically entitled to a six-month grace period before their first bill is due, Kantrowitz pointed out.
As a result, they won’t need to sign up for a repayment plan until Novemember or December. The plans should be available again by then.

Options if you can’t afford your student loan bill​

The disruption to IDR plans will be especially difficult for borrowers who can’t afford their current student loan bill and now can’t access a more affordable option, Mayotte said.
These borrowers can call their loan servicer and explain their situation.
You should first see if you qualify for a deferment, experts say. That’s because your loans may not accrue interest under that option, whereas they almost always do in a forbearance.

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If you’re unemployed, you can request an unemployment deferment with your servicer. If you’re dealing with another financial challenge, meanwhile, you may be eligible for an economic hardship deferment.
Other, lesser-known deferments include the graduate fellowship deferment, the military service and post-active duty deferment and the cancer treatment deferment.
Student loan borrowers who don’t qualify for a deferment may request a forbearance.
Under this option, borrowers can keep their loans on hold for as long as three years. However, because interest accrues during the forbearance period, you can be hit with a larger bill when the break ends.

 

[DC_Dude]

 

[DC_Dude]

I understand many of you are upset and anxious about the recent activity around the IDR plans. I don't blame you. For what it's worth here's my speculation as to what comes next and why I think that way.

First - this is all happening because of the court injunction from February 18th. The reason this is affecting ALL IDR plans and not just SAVE is because the injunction required the ED to put the entire regulatory package on hold - not just the SAVE portion. And part of that regulatory package changed the way spouse's were treated in the family size when the borrower files taxes separately. It used to be that in that scenario (for the plans that allowed such a tax filing scenario to not count spousal income) to still use the spouse in the family size. So a borrower on IBR, PAYE or ICR who filed taxes separately could still claim a family size of two. The SAVE regulatory package made it so if you filed separately you couldn't claim the spouse in family size on any plan - so in the scenario above the family size would be one. They can't do that now - either temporarily or permanently remains to be seen. But that's why they had to pause ALL the plans. So this isn't something the current administration did to mess with people or cripple PSLF - it would have happened regardless of who was in office because it's due to the court injunction. If you want to see the rest of this regulatory package that's affected by this injunction you can find it here https://www.govinfo.gov/content/pkg/FR-2023-07-10/pdf/2023-13112.pdf

Remember - we don't know if in the end the courts will just kill SAVE or the whole package. And we don't know if they will permanently kill the forgiveness component of ICR and PAYE (which is not part of the package). But until the court process is over or until the injunction is lifted, the ED isn't allowed to do the things covered by this injunction.

One thing to add - it's possible Congress could end this on their own. If reconciliation goes through before the court process, and reconciliation kills SAVE, it's possible the rest of the package will come back and ICR/PAYE forgiveness will too. Not for sure, but definitely possible. Honestly that's what I hope happens. Reconciliation requires a savings of $330 billion from ED and Workforce spending. Killing SAVE "saves" $123 billion. If the court kills it before Congress can I'll be nervous as to where they go find that $123 billion.

Now - on to what how I think this could play out in the short term for the IDR plans. Short term meaning until this is settled either by the courts or Congress.

First..consolidations are still being processed. You can only submit via paper and with no idr application. So you can still consolidate..but may not be able to get that consolidation on an IDR right away.

I fully expect the ED to extend everyone's recert dates for those already on an IDR. At least everyone due in the next few months. There's no way they just let folks revert to standard or get kicked off their plan. There's zero political value and a lot of political peril for them to let that happen. Remember - both sides of the aisle have constituents with student loan debt. And they extended recerts in the past when there was a barrier to borrowers being able to fulfill this requirement.

I also suspect that they will treat this new pause in processing the same way as the last one. Processing forbearance for a few months then general forbearance if it goes on longer. https://studentaid.gov/announcements-events/save-court-actions I'm unsure about the interest as my read of the injunction is that they can't forgive interest - but I may be reading that wrong.

What I'm unsure about are borrowers trying to change plans or get on an IDR for the first time. Obviously nobody can do that while the form is down. Paper forms submitted now will not be processed. So if you are trying to get on a IDR for the first time now and need to or risk delinquency I recommend either exploring the non-IDR plans (graduated and extended) or request forbearance until we get further guidance.

Buy back rules are not at risk for PSLF. Different regulatory package. https://studentaid.gov/manage-loans...rvice/public-service-loan-forgiveness-buyback The plans themselves WILL be coming back. IBR and ICR are written into federal law. So even in the worst of worlds, the ED has to offer IBR and some form of ICR. IBR forgiveness is also not at risk - but the other IDR plan forgiveness components are as I mentioned earlier.

With that said, the wheels move slowly. It takes time for internal ED to meet with all areas - policy, legal, servicer oversight, IT, etc and think through all the things - then put together communication language to borrowers and vendors/servicers, then get that information out to everyone, then give the vendors time to code and implement. So it could be a few days or maybe even weeks before we see updated guidance or actions (assuming I'm right that this is what will happen). So for those that maybe didn't recertify on time and were due last week or this week or even maybe a few weeks from now - we may very well see people kicked off plans or reverted to standard. IF we do - I'm still not going to panic unless we get to say a month from now and nothings changed or been communicated about my assumptions above.

The IDR plan I think has the most legs for reconciliation is based off of the CCRA from 2024. You can read it here https://www.congress.gov/bill/118th-congress/house-bill/6951/text The proposal would mean only this new IDR plan and the ten year standard would be available to loans made on or after a date after the law was enacted. So all existing loans would still have access to today's plans. If Congress makes changes to the repayment plans, I fully expect it will be for new loans only.

As far as PSLF goes, I'm still not worried about it. I know there's a lot of people that are. But unless and until there's more than a vague "we should look at PSLF" proposal out there and one that actually starts getting debated in the committees I truly don't think it's a target - especially for existing loans. I'm a little worried about the proposal to make all hospitals for profit as that would have the unintended consequence for those employees for PSLF - but frankly the health care industry has such a strong lobbying force and funds, I'll be very surprised if this goes anywhere. But if you're worried - absolutely write your member of Congress and let them know the impact PSLF has and will continue to have.

Remember - we are at the stage of reconciliation where two things happen - they throw everything at the wall to see what sticks - and they often offer outrageous proposals so they can later concede to something that in comparison seems much less outrageous. Does it mean we shouldn't be paying attention? Absolutely we should be - but for stand-alone no detail line items that haven't been pushed robustly in the past, it might be too early to lose sleep over it. That's just my opinion of course. If you don't agree with me that's perfectly ok. But do a girl a favor and disagree with me in a way that isn't ugly. We should all be striving to maintain the ability to have reasonable discussions and debates about policy issues.

 

[blackbull1970]

As Trump goes after Education Department, staff cuts leave student loan borrowers in the dark

Staffers at the Education Department tasked with fielding complaints from federal student loan holders and resolving their issues were let go in the recent job cuts, one employee told CNBC. At least eight of the fired staffers were working on a total of nearly 800 student loan borrower complaint cases, an employee said.

By Annie Nova, CNBC
March 6, 2025

As Trump goes after Education Department, staff cuts leave student loan borrowers in the dark

Trump is expected to sign an executive order calling on Education Secretary Linda McMahon to abolish the agency.

www.nbcnews.com

Linda McMahon and President Donald Trump in 2018.​

 

[OutlawR.O.C.]

I think (or wish) the Democrats would start filing court cases in multiple states challenging the legality and rationality of the current laws and standards preventing student loan borrowers from filing for bankruptcy to address student loan debt.

 

[BKF1]

As Trump goes after Education Department, staff cuts leave student loan borrowers in the dark

Staffers at the Education Department tasked with fielding complaints from federal student loan holders and resolving their issues were let go in the recent job cuts, one employee told CNBC. At least eight of the fired staffers were working on a total of nearly 800 student loan borrower complaint cases, an employee said.

By Annie Nova, CNBC
March 6, 2025

As Trump goes after Education Department, staff cuts leave student loan borrowers in the dark

Trump is expected to sign an executive order calling on Education Secretary Linda McMahon to abolish the agency.

www.nbcnews.com

Linda McMahon and President Donald Trump in 2018.​

Let's see if this same group of people still believe voting doesn't matter and if the so called third parties (who are currently quiet) still appeal to them.