How Trump’s Potential Shutdown of the Education Department Could Affect Your Loans | Global News Avenue

Incoming President Donald Trump’s second term is expected to bring some changes. Trump’s pledge to close multiple government agencies to reduce wasteful spending could have a huge impact on how the government operates. One of the agencies at risk is the U.S. Department of Education, which oversees and administers federal student loans and the various programs that administer those loans. If the Department of Education does disappear, federal student loans may fall under the purview of another government agency.

Can Trump really shut down the Department of Education?

While President-elect Trump has the potential to dismantle the Department of Education, doing so would require a monumental effort. Abolition of government agencies would require congressional approval, meaning it would likely require bipartisan support.

This isn’t the first time someone has tried to end the Department of Education, either. One of the most recent examples is HR899, Ending the Department of Education, which was introduced in February 2023 by Rep. Thomas Massie (R-KY). The U.S. House of Representatives has considered the bill, but has yet to make any progress.

Education under the Trump administration

What would existing education be like without a government agency focused solely on education? student loans? Unfortunately for borrowers, the Trump administration is unlikely to forget (or forgive) all of these debts. If the Department of Education were disbanded, agencies like the Department of Justice, Labor, or Treasury would more likely be responsible for student loans. Of course, these agencies may need additional staff and support to handle the additional workload.

Borrower repays student loan Income Driven Repayment (IDR) Plan It’s also valid to worry about the future. this Save valuable education expenses (SAVE) The scheme is currently on hold as we await a court ruling on its legality, but it is likely to be overturned in the coming months. This will allow borrowers to choose from remaining IDR programs, which may be overhauled or eliminated entirely After Trump took office.

However, Republican leaders have proposed some solutions to ease the burden of the student debt crisis. For example, Rep. Mike Lawler, R-N.Y., introduced the Affordable Student Loans Act, which would lower interest rates on most federal student loans to 1%.

Another bill is called college cost reduction act Introduced by Rep. Virginia Foxx (R-NC), which would double the maximum limit Per Grant reward and block capitalized interest About student loans. It will also replace all repayment plans with two options – Standard, 10-year repayment program and the “Repayment Assistance Program.”

bottom line

Incoming President Trump has promised to end the Department of Education, but no one is sure he will be able to pull it off. All borrowers with federal student loans can do now is wait and see how the situation develops and which repayment plans will remain available in 2025 and beyond.