Will Student Loan Programs Change in 2025? What Borrowers Should Know

Hey, what's going on everybody? I'm Stanley Tate, your student law lawyer. Thanks for joining me today. As you know, I spend a lot of time in the comment section reading through your questions, and there's been a lot of concern lately, especially wrapped up with this ongoing litigation, the forgiveness opportunities, the say forbearance, and now President Trump's election win. It's like, what does all of this even mean? So in today's video, I want to go over some of your top questions, talk about what's going on, and give you the best answers I can based on what we know right now. Now I won't pretend to predict the future here. Many things depend on what happens with the ongoing safe plan litigation, potential changes under the Trump administration, and any new challenges that might come up. None of this is happening in a vacuum. There's action, then response, and then another response to that action. It's a cycle that will continue until we reach some kind of resolution one way or another. And sometimes the result of all this back and forth is just no action at all, kind of homeostasis. And I know that's crushing, especially if you've had these loans for years and you're ready to be done, whether it's through public service loan forgiveness, the one-time account adjustment, or if you tended a school like the Art Institute, where you were promised relief by the education department, but you still haven't got it yet. I get it. So in this video, I'll do my best to share what I know based on years of working within the student loan system, reading the latest updates, interpreting the tea leaves, and from conversations I had with other advocates and lawyers, as well as direct conversation with the education department officials. Now, even with all of that, I am telling you, you need to be prepared to wait. Things are going to move painfully slow. We have to remember just how massive the undertaking is here. The Biden administration set out to untangle a federal student loan system that is frankly the most complex consumer loan system in the world. So with that caveat, let's go ahead and dive into your questions and see if we can bring a little clarity to all this mess. All right, let's start with the big question. What happens to my student loan forgiveness if programs like say PSLF or IBR get challenged or eliminated? First, if you're someone who's already received loan forgiveness, I can't see a realistic scenario where the department of education takes that forgiveness away and reinstates your loan. Once you've received that benefit, it is incredibly difficult to unring the bell. This is actually a big reason why department of education officials are working hard right now to apply the one-time account adjustment to borrower's files. They want that credit firmly awarded and it's much harder to retract something that's already been officially granted. Now, if you're still waiting on forgiveness, could programs like SAVE or PSLF be challenged, modified, or even eliminated? Yes, it is possible, but it's not probable. Think of it this way. It's possible I can get struck by lightning today, but that doesn't make it likely. Probable is about what's realistically likely to happen and here's where things stand. For the SAVE plan, for example, it's a very generous program. It allows borrowers with low income to avoid paying much, if anything, toward their student loans and it even leads to forgiveness faster than other plans like REPAY or IBR. So, could we see SAVE either eliminated or modified to be less generous? That's more likely, but again, it's important to remember that these changes would be prospective and likely wouldn't affect those already in forgiveness. As for PSLF and IBR, those are set by statute, meaning they're laws passed by Congress. They're not going anywhere unless the Supreme Court declares them unconstitutional or Congress itself decides to change those laws. Even when we see a shift in power, i.e. Trump moving into the White House, it's unlikely we'd get to that point. There are other more pressing issues on the table, like the economy and immigration, that both sides of the aisle are focused on. Now, I'm not ruling out the possibility of creative moves from those in power. Much like how opponents of the New Deal tried various tactics to chip away at the programs in the 30s and 40s, but just as Social Security proved too valuable to dismantle once Americans came to rely on it, there's enough support across the board for some form of loan forgiveness that makes a complete rollback improbable. Most people agree on forgiveness in principle. The debate is more about how it's structured. Now, yes, I did just compare Social Security to loan forgiveness, but wasn't really trying to make an apple-to-apple comparison, but you get my point. Alright, I've answered that question. Let's on to the next big one. If you've already several years into a forgiveness program, whether PSLF or IDR forgiveness, how safe is your progress? Are you actually going to reach that finish line, or is the promised relief going to vanish before you get there? First off, I get your worry here. You've made payments for years with the expectation that forgiveness is waiting at the end, and it's natural to be concerned about whether that promise will hold. Now, the likelihood of you reaching the end only to find the relief gone, I don't see that as probable. For programs like PSLF, they'd have to eliminate the program altogether, and any major change would likely face significant legal pushback. In the worst-case scenario, we might see attempts to slow or restrict forgiveness processes under a new administration. For instance, under a Trump administration, when they take office, they're already talking about dismantling the education department and blocking the initiative. It's possible we see temporary obstacles, but it's also likely that any drastic actions would lead to a swift public and legal response, potentially leading to a political swingback. Still, there's one big caveat to consider. PSLF requires payments under an income-driven repayment plan, so even if they didn't touch PSLF itself, blocking or severely modifying IDR plans could complicate things for borrowers on their way to loan forgiveness. Sure, there's still IBR, but IBR isn't open to everyone. There are some borrowers who won't be eligible for IBR because they don't have a partial financial hardship. So, there is a way to block progress towards PSLF even without eliminating it. But again, I don't think that's probable. I'm just pointing out what's possible. Now, having said all of that, all of these are valid concerns. And yet, if I'm being honest, I don't think it necessarily changes what you should do right now. Many of you are in a position where these forgiveness programs are your only realistic path forward. Walking away from that now, out of fear, could leave you with a debt load you can't realistically repay otherwise. So yes, it's frustrating and stressful to feel over-leveraged and dependent on a system this complex and volatile. But in most cases, the best move is to stay the course and monitor developments carefully. You've come this far, and despite the uncertainty, all signs still point toward forgiveness being in reach for those who put in the years and met the requirements. Now, let's move on to the next big question. Should I be doing anything different if I'm waiting on the one-time account adjustment? Now, as I mentioned earlier, if you're already in an IDR plan, it likely means you're not in a position to cover your monthly payments comfortably out of your normal budget. So, if you're considering opting out and not waiting on the one-time account adjustment, then you're necessarily saying you're considering paying the debt off. And if you're considering paying it off, I imagine your only real option to do so is to cash out something major like your home equity, retirement, savings, or some other financial safety net. Essentially, you're deciding to tap into assets you've built up for future security to get rid of the loan debt today. This is a huge decision because it's about tradeoffs. By going that route, cashing out your kind of safety net, you're saying I'd rather lose that financial cushion than wait for the forgiveness I've been promised. And I think the question to ask yourself here is this, would I be okay if I paid off the debt with those resources only to find out later that forgiveness went through? And had you waited, you would have You could end up in a position where you regret not waiting, especially if it's difficult or impossible to get that money back. And trust me, the government ain't trying to give you no money back for real. So, unless the emotional toll of waiting is too high where it's truly affecting your well-being, it may be worth holding onto those assets and trusting that forgiveness is coming. After all, if you have the money to pay off the loan today, you should still have it tomorrow. You don't need to make that move right now unless waiting is no longer an option for you emotionally and mentally. But if you do decide to pay off that debt and walk away from waiting, commit to that decision fully. Avoid looking back or trying to get a refund if things change. It'll only create more stress down the road. Weigh the options, and if you can, stay the course a little bit longer. Relief might be closer than it feels. Is there any update on the Art Institute discharge opportunity? No. That's the short answer. But right now, unfortunately, there's no formal update. My colleagues and I have been asking the Department of Education for information, and what we're seeing and getting back is a lot of delays and silence. The truth is, untangling these loans, especially for people who have consolidated them multiple times, is complicated work. And it seems like a lot is happening behind the scenes. At least to me, this is what I'm getting. I know it doesn't seem that way to you. And the way I think of this is kind of like bamboo. It grows on the ground first, developing its roots, and before you actually see it sprout up, there's a bunch of stuff happening. That's what's going on here. They're working on it. But the process is long. It'll be helpful if the Education Department provided some progress updates instead of just saying, your loans will be forgiven and then going silent for months. I get how frustrating that can be. In fact, I recently heard from one of my clients, Debbie. Yo, shout out to you, Debbie, who got a letter earlier this year saying that her loans would be discharged because she attended the Art Institute. But here we are, she's still seeing that loan balance show up. And this language will be forgiven versus our discharge leaves you stuck in this uncomfortable in-between where you're waiting, uncertain, and sometimes unable to actually move forward in life because you want that debt gone before you pull the trigger on something else major in your life. Now, with the new administration on the horizon, I get how that adds to even more anxiety. But right now, it seems like all we can do here is wait. The process may feel invisible, but I believe they're working toward delivering those changes just like bamboo growing underground before it breaks the surface. All right, last question. Can you sue the Department of Education, lawmakers, or others for emotional harm, personal injury, or for wrongly denying you benefits you're entitled to? Technically, yeah, you could. But pursuing this type of case is like trying to cross from a mountain peak to a mountain peak on a unicycle while juggling and cooking dinner and playing cards and text messaging your friends all at the same damn time. It is theoretically possible to do all of that, but practically, it's almost impossibly difficult. First off, you need an attorney willing to take on such a complex case. Realistically, this would have to be a larger consumer advocacy group like the Student Borrower Protection Center or the Project on Predatory Student Loan Lending. And even with their support, you need serious funding because cases like this are long and expensive and require a ton of resources. Then there's the legal part. You'd have to prove harm, which is especially tough for something like emotional damages, which are hard to quantify and prove in court. And on top of that, you're up against sovereign immunity or protection that makes it incredibly hard to hold government agencies accountable for their decisions. So yeah, sure, in theory, it is possible. But it's like stacking up a bunch of shaking Jenga blocks. Any one block out of place and the whole thing falls apart. The system is designed with so many obstacles that it is highly unlikely a case like this would succeed. So instead of pouring resources into something with such slim odds, the more realistic approach is to stand firm, advocate for your rights where you can, and join the larger push for change. That's where you're likely to see more impact, even if it doesn't feel as immediate or as satisfying as a way to tell your government kiss my giving my. All right. That's it for today's questions. I know there's a lot of frustration and uncertainty doesn't make it any easier. But remember, you're not alone in this. I'm here. Me and my team are to help you navigate it all. And I'll keep showing up with updates, insights and answers whenever I have them. With that being said, I'll see you next video, please.