It’s been a whirlwind month for student loan borrowers, as the Trump administration has taken a series of actions that have plunged repayment and student loan forgiveness programs into turmoil and uncertainty. Many borrowers may feel paralyzed.
In February, following a new ruling by the 8th Circuit Court of Appeals in an ongoing legal challenge over the Biden-era SAVE plan, the Trump administration effectively shut down the entire income-driven repayment plan system. The U.S. Department of Education removed the online and paper applications for income-driven repayment, and ordered loan servicers to stop processing any pending IDR requests, including for repayment plans not directly subject to the ongoing litigation. In response, the American Federation of Teachers filed a legal challenge last week, arguing that the Trump administration is illegally blocking affordable repayment plans and preventing borrowers from pursuing student loan forgiveness under programs like Public Service Loan Forgiveness.
Then, President Donald Trump engaged in a series of executive actions that have injected an enormous amount of uncertainty into the environment. Trump issued an order to limit eligibility for the PSLF program based on an organization’s activities. The administration then effectively fired or bought out nearly half of the Department of Education’s staff. Trump issued a subsequent executive order to shut down the Department of Education. And the next day, after the White House provided assurances that the federal student loan system would remain with the department, Trump unexpectedly announced that federal student loans would be transferred to the Small Business Administration.
Borrower advocates and legal experts have warned that many of these actions may be illegal. A legal challenge has already been filed over the Trump administration’s termination of half of the Department of Education’s staff. And Trump’s orders to shut down the department and transfer federal student loans to the SBA without congressional authorization may also get challenged in court.
But navigating the federal student loan system in the current chaotic environment may be challenging for many borrowers, to say the least. While many people may feel powerless, there are steps that borrowers can take, even if they are impacted by the Trump administration’s recent actions. Here’s a breakdown.
Save Student Loan Records From The Department Of Education Website
Whenever there are major changes to federal student loans, such as a transfer to a new servicer or contractor, or reforms to existing programs, there is always a chance that critical records could be lost or corrupted. Saving key student loan records may be really important if the Trump administration winds up trying to move the federal student loan system to a different federal agency (like the SBA), or cuts off access to certain websites or data.
To mitigate these risks, borrowers should log into their Department of Education account at StudentAid.gov and periodically download and retain key records. This would include taking a screenshot of their StudentAid.gov dashboard, which contains key high-level information about a borrower’s student loans as well as progress toward student loan forgiveness under income-driven plans and PSLF, if applicable. Borrowers pursuing PSLF should also take screenshots of their PSLF tracking information available via their StudentAid.gov accounts.
It’s also a good idea to periodically download your raw StudentAid.gov data file. This text contains a lot of critical information about all of your federal student loans including origination and balance information, the status history, your repayment plan and income recertification date for IDR programs, and much more. To download your student loan data file, click the “View Details” button in the “My Aid” box on your StudentAid.gov dashboard, then click the “Download My Aid Data” link. Save the file to your computer (you can save it as a text file or convert it to a PDF).
Save Student Loan Payment Records And Letters From Your Loan Servicer
One piece of information that you cannot get via your StudentAid.gov account is your actual month-by-month payment record, showing your history of making payments each month. To obtain that, you would need to log into your student loan servicer account (for Department of Education student loans, this would likely be Nelnet, MOHELA, EdFinancial, or Aidvantage).
You can download or take screenshots of your monthly payment history once you’re logged in (but keep in mind, the payment record will probably only go as far back as when that particular student loan servicer started handling your account). While logged in, be sure to also download and save key letters and notices you have received.
Submit A Paper Income-Driven Repayment Application To Request Affordable Student Loan Payments
Following the Trump administration’s order last month, the Department of Education took down the online and paper IDR applications, preventing borrowers from accessing affordable repayment plans or switching to a different IDR plan. Student loan servicers were also instructed to stop processing all IDR requests.
Despite this, borrowers can still complete and submit paper IDR applications directly to their loan servicer. These applications are not being processed right now, but there’s at least a possibility that if you get it submitted, it will already be in the queue once processing resumes again, which could mean a shorter delay. The problem is finding the appropriate IDR application; a quick Google search suggests that the application is still out there, even if it is not on the Department of Education’s website anymore (i.e., Aspire, a FFEL-program loan servicer, has the IDR application available on its website). Be sure to use the most recent version of the application, which is Form No. 1845-0102 with an expiration date of “4/30/2027” in the top right corner of the first page.
Follow the instructions on the form to complete the application, then hand-sign and date it where indicated. Attach documentation of your income (such as your most recently-filed federal tax return, or a recent pay stub) and upload this to your student loan servicer. Most loan servicers have a mechanism that allows you to upload documents, although you may need to be logged into your account, depending on the specific loan servicer.
Request A Deferment Or Forbearance If You Cannot Afford Your Student Loan Payments
Student loan borrowers who cannot afford their normal Standard plan payments, or have experienced a change in income and need to have their monthly IDR payment recalculated, are in a bind following the Trump administration’s order to halt all income-driven repayment plan requests. If you have a student loan bill due that you cannot afford, do not ignore it – this can have significant repercussions including late fees, credit damage, and even default, which is very serious.
Instead, contact your loan servicer to request a temporary deferment or forbearance. This will postpone your payments while keeping your loans in good standing. This isn’t ideal – interest will still accrue on your loans, and the time probably won’t count toward student loan forgiveness under IDR or PSLF. But some borrowers effectively have no choice right now given the Trump administration’s actions, and going into a deferment or forbearance is better than falling behind on your payments and going into default.
Certify PSLF Employment To Get Student Loan Forgiveness Credit
Student loan borrowers who are pursuing PSLF should continue to certify their employment, as that is the only way to get credit toward student loan forgiveness. Despite President Trump’s recent executive actions and the downsizing of the Department of Education, PSLF employment certifications are still actively being processed. And borrowers who use the department’s online system should be able to get their certifications completed fairly rapidly.
Borrowers can use the PSLF Help Tool at StudentAid.gov to certify their employment online. Using the online tool is preferable to doing the certification manually on a paper or PDF form; the online system is designed for rapid processing with fewer errors than a manual form, and you’ll be relying less on Department of Education staff to review and approve it. Be sure to coordinate with your employer (usually someone in human resources) and work with them to complete the online form, as both the borrower and the employer must digitally sign off on the certification.
Check Credit Reports For Erroneous Student Loan Reporting
Whenever there are student loan disruptions, there is always the possibility of credit reporting errors. These can include duplication of accounts (suggesting borrowers owe twice as much as they actually do), or erroneous reports of missed or late payments. Student loan borrowers should periodically review their credit reports.
One option to do so is by exercising your right under the Free Credit Reporting Act to access at least one free credit report from each of the national credit bureaus. You can also sign up for a credit monitoring service.
Rethink Financial Aid Plans And Explore Options That Don’t Involve A Student Loan
Given the turmoil that the federal student loan repayment system is currently experiencing right now, it wouldn’t be unreasonable to also be concerned about the broader federal student aid system, including the FAFSA and the disbursement of new federal aid. To be clear, there are no clear signs that these systems are currently failing. But with all of the ongoing disruptions at the department, including significant staff reductions at the Office of Federal Student Aid, it’s certainly conceivable that there could be problems.
In addition, Republican lawmakers in Congress are considering making significant changes to the federal student loan system as part of a broader reconciliation bill to extend tax cuts. This may include eliminating certain federal student loan programs entirely, like the Parent PLUS and Graduate PLUS programs, reforming work study programs, and even making scholarships taxable. Lawmakers are also considering fundamentally changing the repayment system, including repealing or changing existing loan repayment and federal student loan forgiveness programs.
Families of prospective college students, and college graduates who are considering returning to school for a graduate or professional degree, should be vigilant and may want to consider delaying enrollment or attending an institution where they will not have to rely on federal student loans or other federal aid.
Contact Your Federal Elected Representatives Over Student Loan Concerns
If you’re concerned over what the Trump administration is doing (or what Republican lawmakers say they might to) with regard to federal student loan programs, then you should reach out to your federal elected officials and express your specific concerns. This includes your congressperson, as well as your two senators who represent your state. In addition, your congressperson and your two senators have offices that handle constituent services; if you are experiencing a problem related to your federal student loans as a result of Trump administration actions, you may be able to get some assistance from their offices.
You can find your local elected officials online at Congress.gov. In addition, the Student Borrower Protection Center, a student loan borrower advocacy and legal organization, recently launched an online tool to help you connect with your elected officials.
Don’t Rush To Refinance Your Federal Student Loans
Given the significant amount of chaos and uncertainty hobbling the federal student loan system right now, it may be tempting for some borrowers to try to refinance their loans via a private lender. The main reason to do this would be to get a lower interest rate and better repayment terms.
But this can be risky for many student loan borrowers. Refinancing your federal loans via a private lender means you would be permanently leaving the federal loan system, closing the door permanently on accessing federal student loan forgiveness and repayment programs. Once you refinance privately, you cannot get back into the federal student loan system again. So while it may be tempting right now, make sure this is the right move for you, and understand what you may be giving up.
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