Trump’s Student-Loan Overhaul Presses On Despite Government Shutdown

UPDATE: The U.S. Department of Education is moving forward with President Donald Trump’s ambitious student-loan repayment overhaul, despite a federal government shutdown that has halted many other operations. Negotiations are now entering their second week, aiming to reshape how millions will repay their educational debts.

The Department confirmed that discussions will continue throughout the shutdown, which began recently. On Monday, October 16, 2023, the department reiterated its commitment to finalize details of the repayment overhaul, which was outlined in Trump’s “big beautiful” spending bill signed into law in July. This legislation brings significant changes to borrowing caps and repayment plans, with implementation set for July 1, 2026.

During the first negotiation session, held earlier this month, Deputy Assistant Secretary for Policy Jeff Andrade emphasized the urgency of these discussions. He stated, “Failure to actively continue work towards promulgating these regulatory changes would substantially impair otherwise funded programs, like Pell Grants and direct loans.” Even though the shutdown limits the department’s ability to publish information online, sessions are being livestreamed to keep the public informed.

The negotiations focus primarily on new borrowing caps and the elimination of existing income-driven repayment options. The proposed changes include the abolishment of the Grad PLUS program, which previously allowed graduate and professional students to borrow without limits. Under the new rules, graduate students would face a cap of $20,500 per year and $100,000 over their lifetime, while professional students would be limited to $50,000 annually and $200,000 total.

Critics of the new caps are raising alarms about their potential impact. Many advanced degree programs exceed these limits, forcing students to consider private loans or abandon their education altogether. Bennett Boggs, a negotiator from the Missouri Department of Higher Education & Workforce Development, voiced concerns, stating, “There are some professions here that are crucial to our state economic development and workforce development, and this list doesn’t have it, so I’m concerned this is going to really cripple certain aspects of what we’re trying to get done here.”

In addition to the new borrowing limits, the Department plans to replace current income-driven repayment options with two new plans: a standard repayment plan and a Repayment Assistance Plan that offers loan forgiveness after 30 years. Borrowers who take out loans before the implementation date will retain access to existing plans, providing a temporary safety net for those already in the system.

As negotiations progress, stakeholders are encouraged to voice their opinions during public comment periods. The outcome of these discussions will have lasting effects on the future of student loans in the United States, influencing how students finance their education for years to come.

Stay tuned for updates as this developing story unfolds. The future of student loan repayment is at stake, and the implications are significant for millions of borrowers nationwide.