The Trump administration has recently announced changes to student loan repayment plans that could significantly affect individuals planning to start college in the upcoming year.
In the United States, pursuing higher education is notably costly, with yearly tuition fees ranging between $20,000 and $50,000.
The Biden administration had introduced a plan aimed at forgiving student loans for certain borrowers and reducing payments for others. However, this initiative has been overturned by Donald Trump.
On Tuesday, December 9, Education Secretary Linda McMahon and her department disclosed in a press release that they had come to an agreement with Missouri to abandon Joe Biden’s ‘Saving on a Valuable Education’ plan.
Previously, Republican-led states had taken legal action against the Department of Education concerning the SAVE plan, and the program had been paused since February after the Court of Appeals ruled in favor of Republicans challenging Biden’s initiative.
Under Secretary of Education Nicholas Kent remarked, “For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration.”
He continued, “The Trump Administration is righting this wrong and bringing an end to this deceptive scheme. The law is clear: if you take out a loan, you must pay it back. Thanks to the State of Missouri and other states fighting against this egregious federal overreach, American taxpayers can now rest assured they will no longer be forced to serve as collateral for illegal and irresponsible student loan policies.”
Under the newly proposed plans, the SAVE scheme will no longer accept new borrowers, which previously allowed some students to have zero monthly payments.
According to The Hill, approximately seven million federal student loan borrowers are currently enrolled in the SAVE scheme, with an additional 450,000 individuals showing interest in joining the plan.
The settlement agreement proposed by the Trump administration is pending court approval.
This development has certainly caused concern among those affected, compounded by the press release indicating that students will have a limited period to choose a new, lawful repayment plan and begin repaying their student loans.
This announcement comes just weeks after Trump revealed plans to cancel student loan debt for millions, albeit with conditions attached.