With the transition to the Trump administration, student loan borrowers will see changes in collection practices and loan forgiveness options.
As the White House transitions from President Joe Biden's administration to President-elect Donald Trump's, a few key updates will impact borrowers.The closure of the Education Department will allow servicers to resume collecting on defaulted loans through wage garnishments as of this month. The on-ramp formally expired in October, but the Biden administration gave borrowers an extra few months before allowing these collection activities to resume.
Ideally, you can make your student loan payment in full and on time each month. But if you do miss a payment or can't pay, you'll want to reach out to your servicer as soon as possible to see what options you have to avoid the harshest consequences. Loans are delinquent the day after a missed payment, and after 90 days your servicer will report the delinquency to the credit reporting agencies. After 270 days of nonpayment, your loan will be considered defaulted. At that point, the entire balance comes due immediately and you could be subject to wage garnishments or the seizure of your tax refund or other federal benefits.Borrowers hoping for a last-minute act from Biden to forgive debt may have been disappointed to learn that wasn't happening. The Biden team was considering allowing the Secretary of Education discharge loans for long-term borrowers and those facing a variety of financial hardships. However, the Biden team ultimately decided against this action. Existing loan forgiveness programs, such as Public Service Loan Forgiveness and Teacher Loan Forgiveness, remain available to borrowers. However, very few borrowers had their loans discharged under these programs during the first Trump administration, due to both technical problems and strict eligibility criteria. The Biden administration made some changes to these programs, like expanding the criteria for qualifying payments to better streamline the application and approval process for PSLF, but it remains to be seen whether borrowers who become eligible to have their loans forgiven will see their debt discharged under President Trump
STUDENT LOANS DEBT FORGIVENESS EDUCATION DEPARTMENT TRUMP ADMINISTRATION BIDEN ADMINISTRATION
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