Trump’s Student-Loan Overhaul Negotiations Persist Amid Shutdown

UPDATE: The Trump administration is pushing forward with its major overhaul of student-loan repayment plans, despite the ongoing government shutdown. The Department of Education confirmed it will continue negotiations this week, vital for shaping the future of student borrowing.

Negotiations, which began last week, are focused on new borrowing caps and significant changes to repayment plans. Among the proposed changes, the elimination of the Grad PLUS program stands out, limiting graduate students to $20,500 annually or $100,000 over their lifetime. Professional students would see even tighter restrictions with caps set at $50,000 yearly and $200,000 total.

Jeff Andrade, deputy assistant secretary for policy, emphasized that the shutdown would not hinder progress. “Failure to actively continue work towards promulgating these regulatory changes would substantially impair funded programs,” he stated. The urgency of these negotiations is underscored by the looming July 1, 2026 implementation date for the new rules.

While the negotiations continue, critical information regarding proposed rules will not be available on the department’s website until the shutdown ends. However, all sessions are being livestreamed for public access, ensuring transparency.

The proposed changes have sparked significant concern among negotiators. Many advanced degree programs exceed the proposed borrowing caps, potentially forcing students to seek private loans or abandon their education altogether. “There are professions crucial to our state economic development and workforce development, and this list doesn’t have it,” warned Bennett Boggs, a commissioner from Missouri’s Department of Higher Education.

In addition to new borrowing limits, the department plans to dismantle existing income-driven repayment plans, replacing them with a standard plan and a new Repayment Assistance Plan. This latter option would allow borrowers to have remaining balances forgiven after 30 years. Borrowers who take out loans before July 1, 2026 will still have access to current income-based plans.

As negotiations unfold this week, public commentary will also be sought before final implementation occurs. The outcome of these discussions could reshape the financial futures of countless students across the nation.

Stay tuned for more updates as this critical issue develops. The impact of these changes could resonate far beyond the classroom, affecting the broader economy and workforce for years to come.