Could the Cancellation of Student Loans Occur if Trump Discontinues the Department of Education?
President Trump has consistently voiced his intentions to dismantle the Department of Education and revamp student loans. This Department, established by Congress in 1979, plays a significant role in education policy. However, President Trump can't eliminate it through executive orders; the responsibility falls on Congress. Even if Congress approves its dismantling, other federal agencies, like the Treasury Department or a new entity, would likely take over.
The prospect of student loan cancellation might seem appealing, but the federal student loan system is a legal obligation between governments and borrowers. Eliminating the Department of Education wouldn't erase these obligations; instead, loan responsibilities would potentially shift to a different agency.
Student loans may continue with the same servicers, as private loan servicers retained during previous shifts in department oversight. However, programs like Public Service Loan Forgiveness and Income-Driven Repayment could be at risk under this new structure. Future forgiveness could become more challenging to qualify for or even disappear altogether.
Privatization could emerge as an option for new student loans, moving them from direct government lending to bank-based loans similar to the situation before 2010. The elimination of the Department of Education also poses legal and administrative challenges. The transition process could be complex, with potential lawsuits and the requirement for congressional approval for major changes.
In essence, eliminating the Department of Education would not grant automatic relief from student loans for borrowers. The shift in oversight could bring new uncertainties and challenges while safeguarding essential services and programs. Borrowers must stay informed about policy changes and maintain clear records to navigate this evolving landscape.
President Trump's proposal to abolish the Department of Education could potentially impact student loan borrowers, as the responsibility for student loans might shift to a different agency under federal law. This scenario may not lead to an automatic forgiveness of Trump student loans, contrary to some beliefs.
The Department of Education, under President Trump's plan, might not be the sole entity responsible for student loan forgiveness, such as the Trump student loan forgiveness that many are advocating for. The changes could bring forth new entities capable of handling student loan cancellation.
If Congress approves the elimination of the Department of Education, the discourse on student loan cancellation may evolve. Trump student loans and other federal loans could still be forgiven, but the process and qualification criteria could change significantly.
Under the new structure, executive orders related to student loan forgiveness, like the hypothetical Trump student loan forgiveness, could face challenges as they may need to be aligned with the policies of the department taking over student loans.
The proposed changes to the Department of Education could have ripple effects on various loan forgiveness programs, including PSLF and IDR, leading to their potential disappearance or adjustment for borrowers, such as those with Trump student loans.
