Trump’s Student-Loan Overhaul Negotiations Continue Amid Shutdown

UPDATE: The Department of Education is moving forward with critical negotiations on President Donald Trump’s student-loan repayment overhaul, even as the federal government remains in shutdown. This second week of negotiations is pivotal, aiming to reshape borrowing limits and repayment plans that could impact millions of students.

Negotiations commenced earlier today, with key topics including the elimination of the Grad PLUS program and the introduction of new borrowing caps. Under the proposed changes, graduate students would face a limit of $20,500 per year and $100,000 over their lifetime. For professional students, the caps would be set at $50,000 annually and $200,000 over their lifetime. These proposals have raised urgent concerns among stakeholders regarding accessibility and the potential financial burden on students.

During the first negotiation session, Jeff Andrade, deputy assistant secretary for policy, emphasized that the ongoing government shutdown would not hinder the regulatory process. “Failure to actively continue work towards promulgating these regulatory changes would substantially impair otherwise funded programs, like Pell Grants and direct loans,” Andrade stated.

One major change includes the proposed elimination of existing income-driven repayment plans, to be replaced by two new options: a standard repayment plan and a Repayment Assistance Plan. The latter would allow borrowers to have their remaining balances forgiven after 30 years. Implementation is scheduled for July 1, 2026, with current borrowers retaining access to existing plans until then.

Concerns have been voiced regarding the new borrowing caps and the limited list of qualifying degrees. Bennett Boggs, commissioner of the Missouri Department of Higher Education and a negotiator in the discussions, noted, “There are some professions here that are crucial to our state economic development and workforce development, and this list doesn’t have it.” This could force students into the private loan market for additional funding, exacerbating financial strain.

While the negotiation sessions are being conducted publicly via livestream, updates and proposed rules will not be posted on the Department of Education’s website until the government shutdown concludes. Stakeholders and the public will have opportunities to provide feedback as these negotiations advance.

As negotiations continue, the outcomes could have lasting implications on the landscape of student loans. The urgency surrounding these discussions reflects the broader economic impact on future students and educational institutions at large.

Stay tuned for more updates as these negotiations unfold, and consider the potential effects on your educational financing options.