URGENT UPDATE: The Trump administration has just announced a significant shift in its approach to student loans, focusing on repayment rather than forgiveness. The Department of Education is expanding its efforts to assist borrowers in repaying their loans, marking a decisive departure from the previous administration’s policies aimed at student-loan forgiveness.
On September 8, 2023, the Department of Education revealed plans to solicit feedback on a new centralized manual designed to enhance debt collection and repayment practices. This initiative aims to equip borrowers with the tools needed to make informed borrowing decisions and manage their federal student loan debt responsibly.
In a press release, acting head of Federal Student Aid, James Bergeron, stated,
“Unlike the previous Administration’s focus on loan forgiveness, the Trump Administration is taking action to implement meaningful and necessary enhancements to the way student loans are serviced to better serve borrowers and American taxpayers.”
This statement underscores the administration’s commitment to ensuring that borrowers prioritize repayment over seeking loan forgiveness.
The announcement follows a controversial move by Federal Student Aid to place the complaint submission button on its website at the bottom of the page, which some lawmakers argue makes it difficult for borrowers to report issues. The administration’s focus on consumer education and better borrower communication is intended to address these concerns.
Officials are also working on creating a new “common manual” that will standardize servicing and debt collection practices. This manual is expected to be finalized by July 1, 2026, coinciding with the implementation of changes stemming from Trump’s recent spending law. This law has replaced existing income-driven repayment plans with two new options: a standard repayment plan and a Repayment Assistance Plan that allows for loan forgiveness after 30 years. Critics have noted that these options are less favorable than former President Biden’s SAVE plan, which offered forgiveness after just 10 years.
As of August 1, 2023, borrowers under the SAVE plan have also seen a restart of interest charges on their accounts, a move intended to encourage repayment. Additionally, borrowers in default are now facing renewed collection efforts after a five-year pause, which includes negative credit reporting and potential wage garnishment.
These changes have sparked concern among student-loan borrowers, including supporters of Trump. Mary Smith, a borrower enrolled in the SAVE plan, expressed her frustration:
“I did vote for Trump. I am a Trump supporter, but there are a couple of things I don’t really agree with, and this is one of them.”
The Department of Education is encouraging feedback on the new manual for a 30-day period, highlighting the urgency for borrowers to voice their concerns. As these developments unfold, borrowers and stakeholders will be keenly watching how these changes impact their ability to manage student loan debt effectively.
Stay tuned for more updates on this developing story as the Trump administration continues to reshape the landscape of student loan repayment.
