Many Will Lose Access to Student Loan Forgiveness Programs If GOP Gets Its Way: See If You’ll Be Affected
Written by
Adam Palasciano
Edited by
Amber Barkley
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Student loan forgiveness has been a hot-button issue in the U.S., and the subject was a cornerstone of the Biden administration’s efforts. Over the past several years, there has been an unprecedented amount of student loan forgiveness, which has brought significant financial relief to millions of Americans.
The National Association of Student Financial Aid Administrators (NASFAA) reported that former President Joe Biden approved student loan forgiveness for 5.3 million borrowers — a total of $188.8 billion.
However, under the Trump administration and a GOP-controlled Congress, things are looking quite different. Here’s what President Donald Trump and the GOP are looking to do to limit student loan forgiveness.
Executive Order on Public Student Loan Forgiveness
At present, the Public Service Loan Forgiveness (PSLF) program offers student loan forgiveness to those working full-time for a government or not-for-profit organization and who have made 120 qualifying monthly payments under an accepted repayment plan.
But Trump wants to make a significant change to the existing program.
On March 7, 2025, Trump signed an executive order targeting the PSLF program. The order directs Linda McMahon, the current Secretary of Education, to revise the PSLF program to “exclude from eligibility organizations that engage in activities that have a substantial illegal purpose.”
The Trump administration claims that the program had been “abused” by the Biden administration to forgive the loans of more than 1 million under the PSLF program.
The intention of this order is to direct taxpayer funds used in the PSLF program towards more traditional, “essential public service roles,” such as nursing, and away from any programs the administration considers ineligible.
Ineligible organizations include those the Trump administration finds “advance” causes such as “radical” diversity, equity and inclusion (DEI) agendas.
As of mid-May, there have not been any changes implemented to the existing PSLF program, but it remains to be seen if that will change.
Planned Elimination of Income-Driven Repayment Plans
House Republicans are also working to reform and limit pathways to student loan forgiveness.
The House Education and Workforce Committee recently released a plan that, if implemented, would bring sweeping changes to existing student loan plans. If passed by Congress, student loan borrowers currently enrolled in an income-driven repayment (IDR) plan, such as SAVE, PAYE or the ICR plan, would have their plans terminated.
Borrowers would be transitioned to an income-based repayment (IBR) plan, which has stricter terms.
Depending on the plan, student loan borrowers with an IDR plan may receive loan forgiveness after 20 or 25 years of payment. The IBR plan, on the other hand, requires 25 years of payments and, Finger Lakes 1 reported, usually carries higher monthly payments — 10% to 15% of your discretionary income.
To add, Parent PLUS loan borrowers would also be impacted. By eliminating the ICR plan, which is the only income-driven option for Parent PLUS loans, many could completely lose their pathway to forgiveness, if no other option is introduced.
The impact on student borrowers remains to be seen, but many borrowers should prepare for an increased financial burden if these changes are implemented.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
Sources
- National Association of Student Financial Aid Administrators, “Biden Administration Announces ‘Final’ Student Loan Debt Relief Approvals.”
- House Education and Workforce Committee, “Providing for reconciliation pursuant to H.Con.Res. 14, the Concurrent Resolution on the Budget for Fiscal Year 2025.”
- Finger Lake 1, “Student loan forgiveness update: GOP moves to cut key programs.”
