donald trump student loan forgiveness

Trump Student Loan Forgiveness: Could It Help You?

Donald Trump’s student loan forgiveness plan could provide real benefit to you if (a) he makes good on his promise, and (b) you have the right kind of student loan repayment plan.

One main big benefit would be that you could save a lot of money and your loan would be forgiven sooner.

Before we look at Trump’s proposed plan, you need to understand some potentially confusing terminology. Trump’s proposed plan would be a new type of Income-Driven Repayment Plan (IDR). Under current guidelines there are four different IDRs, each with slightly different terms and qualifications. They are: Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR).


Here’s how federal student loan repayment could change under a Trump administration.


Trump Student Loan Forgiveness

As currently understood, Trump’s plan would most closely resemble the REPAYE Plan. Keeping in mind that none of this is law yet, here is what Trump proposes:

  • You would consolidate all of your current federal student loans (private loans contact us for further assistance) into a single plan.
  • When payments start, you would pay 12.5% of your discretionary income toward your loans. (The current REPAYE plan requires 10%.)
  • Your loan would be totally forgiven after 15 years. (Current loans cannot be forgiven for 20 or 25 years, depending on whether loans are for undergraduate or graduate study.)


Questions Remain

Trump has not yet explained specifically how the increased forgiveness amounts and resulting higher costs to taxpayers would be funded.

He has said he plans to lower federal spending accordingly. Trump has also promised to scale back funding significantly for the Department of Education.

The Department of Education currently spends about $11 billion on IBR plans annually. It is not known how much more the government would have to spend on a plan that forgives loans 5 to 10 years earlier than current regulations allow.


Congressional Action Not Required

Now that he's president, Trump can enact his plan through the Department of Education without congressional approval. In fact, President Obama created two repayment plans through the Department of Education during his tenure.


According to Mark Kantrowitz, publisher and vice president of strategy at, “This [student loan repayment plan] could be implemented entirely through the regulatory process.”


Steps You Can Take Now

As you await more direction from the incoming administration, there are things you could do to prepare.

  • Do your best to stay out of default. In the past, new student loan programs have been difficult for those in default to enroll in, which might make enrolling in a new Trump plan problematic.
  • Make sure that all of your federal loans are consolidated in the direct loan program. If they are not, take action to do so.
  • If you are in default, you may want to enroll in an Income-Driven Repayment plan. Doing so will likely lower your payments. You will also be well positioned to take advantage of Trump’s student loan repayment plan should it come to pass.
  • If you are current on your payments, it may be advisable to stay put in your current loan(s) until the Trump plan is formally revealed. If your income is low enough and your balance high enough, the Trump plan may save you money, especially if forgiveness occurs after 15 years.
  • If you have private loans, they will likely not be eligible for Trump’s plan as it now stands. Our specialists can assist with with private loans, contact us today for a free consultation.
  • If you have Stafford Loans, check to see if you qualify for any of the Stafford forgiveness programs.
  • Check your eligibility for student loan forgiveness


Tweaking the Plan

Some observers like the idea of repaying federal student loans based on income, but feel adjustments are needed.

For one thing, they say, there should be a disincentive to pile on additional debt. Currently, with payments based solely on a percentage of income, your payments would be the same no matter how much student loan debt you carry.

One solution would be to require those with a higher balance to pay back their student debt at a higher percentage of income.

Others say it would be best if all federal student loans fall under an IDR plan. That way someone with higher income would not be able to obtain a standard plan at a lower rate as is allowed currently.


The Bottom Line

An Income-Driven Repayment plan such as the one Trump may enact could be good news for you, depending on your income and the balance owed on your student loans. If your balance is high enough and your income low enough, you could end up with much of your debt forgiven after 15 years.

On the other hand, if your income is high and your balance relatively low, you may pay off your debt in fewer than 15 years and have nothing left to forgive.

Once a Trump plan is in place, if you have a choice, it will be important to run the numbers before deciding which plan is best for you.


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obama vs donald trump on student loan forgiveness

Obama Student Loan Forgiveness Helps Those Cheated By For-Profit Colleges

In 2015, Corinthian Colleges, one of the largest for-profit colleges in the U.S, went bankrupt after federal investigations found the company to be using deceptive practices to commit fraud towards its students. The federal government is still picking up the pieces from its collapse. But have no fear because in 2010 the Obama administration signed the new Obama student loan forgiveness program that caps student loan payments at 10% of your income. This income-based payment setup is otherwise known as the "Pay as you Earn" program. Check your eligibility. This helps borrowers potentially save thousands of dollars on student loan payments and even "forgive" the loan as a whole!


What Is the Obama Student Loan Forgiveness Program?

The Student Loan Forgiveness Program is a federal program that assists those working in public service jobs, such as nonprofits, manage their debt loan through forgiveness after 120 payments (ten years).This program, signed in 2010 by the Obama administration, gives borrowers (as well as lenders) options to help student consolidate and refinance their student loans. This is a great alternative to the standard 20-25 year forgiveness plans that come with standard federal loan repayments. Learn more about student loan forgiveness.


Will Trump Get Rid of the Student Loan Forgiveness Program?

There is no guarantee that president Donald Trump will keep the Obama student loan forgiveness program. Trump recently signed off on executives orders that negated some of the previous work by the Obama administration. He has yet to comment on the status of federal student loans, but we are sure it is on his radar. If you ever considered applying for student loan forgiveness, right now is the best time to apply. You have the opportunity to be grandfathered into the current program and pay $0.00/mo on your current student loans. Contact one of our advisors to discuss your student loans.


For-Profit Universities Accused of Fraud

The U.S. Department of Education announced that students who were defrauded at 91 former Corinthian campuses across the country "have a clear path to loan forgiveness under evidence uncovered by the Department while working with multiple state attorneys general," according to a statement from the department. Students who took classes at Corinthian schools under its Everest and WyoTech brands in more than 20 states are eligible to apply for debt relief through an online form. The Education Department is making efforts to reach out to students to notify them of the relief measure through postal mail, email, partner organizations and by other means.


Read more: How Does A Student Loan Affect My Credit Score

The announcement marks the largest group of borrowers to be offered debt relief since the Education Department began to sort through evidence last year to determine which Corinthian students deserve to have their loans forgiven. Last summer, a similar online form was announced and sent out to students who attended 12 Corinthian schools under the Heald College brand.

In total, more than 8,800 former Corinthian students have been approved for loan discharges so far, totaling more than $130 million, according to the Education Department.

But some advocates for Corinthian student debt relief think this is all too little, too late. They say that even including the new relief measures, there are thousands of defrauded students who are still not eligible for the relief from loans.

Laura Hanna, co-founder of the Debt Collective, a group that helped organize a debt strike among former Corinthian students last year, said the latest debt discharge still leaves much to be desired.

"The majority of debtors we've been organizing with since November 2014 will not receive relief from this announcement," she said in an email. "And of those who qualify, plenty of people will never receive relief because they won't know to apply for it. This is a serious issue for all those who are low income, don't have access to computers or may not catch a news item about said possible relief."

Hanna and other advocates for more substantive debt relief think that given the widespread evidence of exploitative practices at Corinthian schools — and the kind of disrepute associated with a degree from one of them — an automatic class-wide discharge for all borrowers is both most appropriate and most efficient.

For the moment, it appears the debt relief process will remain slow and prone to allowing some defrauded students to slip through the cracks entirely. Don't be one of those students and consider applying for the Obama student loan forgiveness program while you still have the chance. Fill out the form below to get started.


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Public Service Loan Forgiveness is Real! Federal Loans Are Included

Yes! Public service loan forgiveness is real and could be a great option for lowering your student loan payments. You can select any servicer to process your forgiveness paperwork, but make sure you choose a trustworthy company. Student Loans FAQ provides top notch customer service. Our support reps are skilled in answering any and all questions you have related to student loans. We know how stressful it is to be in financial duress, burdened by loans. Our goal is to help you!

Federal loans are forgiven, but if you have private loans you may qualify for a loan consolidation. This is a great option if you have taken out multiple loans and want to break it down to one monthly payment. If you are interested in learning about your options, fill out the short form below:

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