The Biden administration has canceled a large amount of federal student loan debt. However, Donald Trump, who opposes these forgiveness programs, will become president in a couple of months.
Will Trump forgive student loans?
Experts believe that once Trump is in office, the Education Department may stop pushing for broad student loan relief.
This has made many borrowers nervous.
Insights from Student Loan Expert Mark Kantrowitz
According to student loan expert Mark Kantrowitz, many people have reached out to him, worried that their forgiven loans might be taken back.
Since Joe Biden became president, almost 5 million people have had their federal student loans wiped out, adding up to about $175 billion in total relief, based on information from the White House.
This was mostly done by fixing and improving older relief programs that had issues in the past, like those for public service workers and income-based plans.
Experts believe those who have already received forgiveness don’t need to worry. Betsy Mayotte, who works with a nonprofit that supports student loan borrowers, says that any future policy changes can only apply to new cases, not ones that have already been settled.
She also noted that the rules of a loan are set in a contract, and once repayment begins, those terms can’t legally be changed midway.
Even those still working toward having their loans forgiven are likely protected, as long as they’re following the rules of their program.
Last year, a federal judge pointed out that once forgiveness is granted, it can have lasting effects that can’t simply be undone.
Although there have been a few situations where forgiven loans were brought back, they were caused by processing errors, like when forgiveness was given before someone was eligible.
Student loan expert Mark Kantrowitz reassures borrowers that the president does not have the power to reverse loan forgiveness. However, he does advise people to keep proof, such as letters confirming forgiveness and statements showing their loan balance is now zero.
What to consider before making financial decisions
The Consumer Financial Protection Bureau recently mentioned that some borrowers have reported problems, including cases where their forgiven balances were mistakenly added back. So it’s a good idea to keep all important loan documents for reference.
