UPDATE: The Department of Education is advancing negotiations on President Donald Trump’s student-loan repayment overhaul despite the ongoing government shutdown. Negotiations entered their crucial second week, with significant changes to repayment plans and borrowing caps on the agenda.
The Trump administration’s efforts to reshape student loans are gaining momentum. As of Monday, October 16, 2023, the Department of Education confirmed it will continue discussions with stakeholders, emphasizing the urgency of implementing new rules mandated by the recently passed spending bill, dubbed the “One Big Beautiful Bill Act.”
During this second week of negotiations, key topics include new borrowing caps and alterations to repayment plans, which are crucial for millions of borrowers. The department’s deputy assistant secretary for policy, Jeff Andrade, reassured negotiators that work would proceed despite the shutdown, stating, “Failure to actively continue work towards promulgating these regulatory changes would substantially impair otherwise funded programs, like Pell Grants…”
Significant changes include the elimination of the Grad PLUS program, which previously allowed graduate students to cover full attendance costs. Instead, new borrowing caps will limit graduate students to $20,500 annually or $100,000 over their lifetime. Professional students face even stricter caps, capped at $50,000 per year and $200,000 total, affecting fields including medicine and law.
Concerns have already emerged regarding these caps. Stakeholders, including Bennett Boggs, commissioner of the Missouri Department of Higher Education & Workforce Development, voiced worries that the proposed limits could hinder crucial workforce development. “There are some professions here that are crucial to our state economic development… so I’m concerned this is going to really cripple certain aspects,” Boggs stated during the first negotiation session.
The department plans to overhaul existing income-driven repayment plans, replacing them with a standard repayment plan and a new Repayment Assistance Plan. This new plan would allow borrowers to have remaining balances forgiven after 30 years. Implementation is targeted for July 1, 2026. Borrowers who secure loans before this date will retain access to existing plans, while new borrowers will be eligible for the Repayment Assistance Plan.
Despite the government shutdown, the negotiation sessions are open to public observation through livestream, though updates and proposed texts will not be posted online until the shutdown ends. The department plans to gather public comments after negotiations conclude, before moving forward with final implementation.
As stakeholders continue to voice their concerns, the outcome of these negotiations will significantly impact millions of borrowers across the nation. The urgency to finalize these changes cannot be overstated, as they will shape the financial futures of many students and professionals awaiting clarity on their repayment options.
Stay tuned for more updates as this story develops.
