What Will the New Year Bring for Student Loan Borrowers? | Global News Avenue

The 43 million Americans with federal student loans will face more uncertainty in their financial lives in the coming year.

One thing is certain: On January 20, the White House will pass from Joe Biden, who has pushed for student debt forgiveness, to Donald Trump, a harsh critic of his predecessor’s loan forgiveness policies. Under the Trump administration, the Department of Education may be less willing to forgive student loans.

Here are some of the big changes student loan borrowers will face in 2025:

The fate of Biden’s student loan reform may be settled

A major student loan overhaul from President Joe Biden’s administration has been temporarily put on hold by the courts after Republican-led states filed a lawsuit to block it. This fall, a judge blocked the department from Implementing the new Savings for a Valuable Education (SAVE) program) repayment plan. This income-based program offers generous repayment terms and forgives any remaining balance for borrowers with repayment terms of 10 to 25 years, depending on the loan amount and whether it is for graduate or undergraduate education.

The court ruling also blocks loan relief under old income-driven repayment schemes such as PAYE and ICR. SAVE renders both programs obsolete, but they Registration reopens In December, the SAVE program was frozen due to legal challenges.

Since the ruling, 8 million people in the SAVE scheme have received loans Grant administrative suspensionmeaning they owe no payments and no interest accrues.

The case may be appealed to the Supreme Court and resolved in 2025. However, student loan experts speculate that the Trump administration may stop defending it in court, leading to its failure.

There may even be bigger changes

Now that Republicans win control of Congress in November’s elections, they will have the opportunity to rewrite the rules for student loan repayment as they see fit. In the past, Republican lawmakers have unsuccessfully introduced legislation to eliminate the Public Service Loan Forgiveness program.

Trump himself has proposed eliminating the Department of Education, which oversees the student loan system. The change would require cooperation from lawmakers and could be blocked by Democrats, who hold enough seats in the Senate to block legislation that would adopt filibuster rules. Trump did not elaborate on who would be responsible for overseeing student loans if the department disappeared, or whether existing student aid programs would continue in some way.