No change to PSLF for existing borrowers
We know we are going to get lots of email about this, so we’ll just come right out with a quick post. The scary headlines concerning the elimination of Public Service Loan Forgiveness in President Trump’s new budget proposal does not apply to current borrowers.
Here’s what’s written in the proposal
“This package would simplify repayment for all new undergraduate borrowers regardless of occupation and create a pathway for expedited debt forgiveness after 15 years of payments instead of after 20 years under current law”.
The keyword here is “new”.
Lot’s of proposed changes to loans!
Now, there are LOTS of proposed changes to student loans, such as the elimination of subsidized loan, elimination or limitations on graduate loans, elimination of all but one Income Driven Repayment plan, etc. But our advice? Ignore this budget, for two reasons. First, if you are reading this page you likely are already in school or have finished, and these changes do not apply to you. But most important, the White House does not create the budget. Congress does. The chances that any of these proposals get enacted anytime soon are virtually zero, as it would require the current House and current Senate to agree. So even for future borrowers, it’s much more likely that the status quo will be preserved. For better or for worse (and you can decide for yourselves whether it’s “better” or “worse”).