Will Trump Try to End the Public Service Loan Forgiveness Program?

There is widespread concern that President-elect Donald J. Trump may end it, since he has tried before. But that may be the wrong thing to fear.

While President-elect Donald J. Trump had plenty to say during the presidential campaign about higher education institutions that were “infected” by the “radical left and Marxist maniacs,” he did not say much about his plans for the federal student loan system.

That hasn’t stopped New York Times readers — whose money questions we solicited in the wake of the presidential election — and others from worrying about the fate of one particularly complicated program: Public Service Loan Forgiveness.

The P.S.L.F. program, which President George W. Bush signed into law in 2007, cancels all remaining balances for federal student loan borrowers as long as they work in a qualifying public-service job and have made 120 monthly payments. They must meet other qualifications, too, and the rules have proved enormously confusing for both the entities that administer the program and the borrowers themselves.

Still, borrowers persist — lots of them. At the end of June 2023, according to the Education Department, just over two million borrowers had credit for at least some P.S.L.F.-eligible employment and also a positive loan balance. A lot is at stake for them (given that the average balance was $88,259) and the nation’s coffers (since there was just over $182 billion eligible for cancellation at the end of 2023, according to the Education Department).

Here are questions that borrowers have asked about P.S.L.F. and some experts’ attempts to answer them.

Will President-elect Trump end P.S.L.F.?

It’s a reasonable question, since he proposed doing so in his 2021 budget for the 2021 fiscal year.

At least three things would need to happen for Mr. Trump to end P.S.L.F. during his second term: He would have to want to do it. Congress would have to want to do it. Then, legislators would have to get it together to pass a bill.

A spokeswoman for the transition team did not respond to a request for comment on Mr. Trump’s plans.

Preston Cooper, a senior fellow at the right-leaning American Enterprise Institute, said it remained to be seen how much — if at all — Congress would focus on higher education in 2025.

If any change affects P.S.L.F., he said, it would most likely be some kind of legislative effort to limit how much debt people could take on from the federal government in the first place. Most parents and graduate students can currently borrow up to the entire cost of attendance, no matter how high, minus any aid.

If Congress shuts down P.S.L.F., what happens to people who are midway through their 120 payments or current students who chose a graduate school based on the expectation that they could enroll in P.S.L.F.?

They would probably be grandfathered in and allowed to continue to pursue debt cancellation.

When Mr. Trump proposed ending P.S.L.F. last time, there was an explicit exception for people in this situation. Mr. Cooper said such an exception would most likely be included in any future attempt to get rid of P.S.L.F.

“People made decisions based on expectations that the program would be available,” he said. “There is a sense even among opponents of P.S.L.F. that ‘we might not think this is great policy, but we already made these promises.’”

The lack of complete certainty, however, could make the coming months tricky for administrators trying to give prospective and current students advice. Graduates of social work programs often use P.S.L.F., but not a single person from the following five universities responded to my questions about the advice they were giving out now: Columbia University, Howard University, Ohio State University, the University of Chicago and the University of Southern California.

If Congress ends P.S.L.F., will the government try to claw back canceled debt from the people who have already had their balances go to zero?

Doing so would be legally dubious and logistically complicated, not to mention cruel, given that the federal government has already used P.S.L.F. to cancel the debt of over one million people.

According to Abby Shafroth, a co-director of advocacy for the National Consumer Law Center, there is a presumption against retroactivity that would force Congress to pass a law specifically designed to reinstate debts — separate and apart from any successful bid to cancel the P.S.L.F. program.

How worried do I need to be in general about the future of P.S.L.F.?

Stay on guard.

If you remember the ragged years between when borrowers first started becoming eligible for P.S.L.F. debt cancellation during Mr. Trump’s first term in office and the 2020 pandemic payment pause, you may be worried about the next four.

Indeed, this is the biggest concern of Persis Yu, the deputy executive director and managing counsel at the Student Borrower Protection Center. Whatever Congress does, the P.S.L.F. program is a complex management task, and the outside entities that the Education Department has hired to help manage various repayment programs have created all sorts of problems over the years.

“What kind of accountability will we see for lost paperwork, bad record keeping and the other problems we saw before?” Ms. Yu asked.

The safest bet may be to assume, as so many borrowers have for years now, that you’re on your own. Document every payment, download every statement from your loan servicer and your bank, and save copies of anything the Education Department sends you.

Assuming the worst is a recipe for low-grade anxiety at a minimum. But Shana Laurienzo, a co-administrator of the 200,000-member Public Service Loan Forgiveness program support group on Facebook, understands why people feel whipsawed.

“This administration prides itself on being mavericks and change makers, but that scares people if they don’t follow the rules,” she said. “Those rules are the difference between our financial future and our financial ruin.”

Trump and Your Money

We’re examining how President-elect Donald Trump could affect your pocketbook.

• Trump’s Record: During his campaign, Trump made many personal finance promises. Here’s what he said about taxes, student loans and more.
• Social Security: Readers are concerned that Trump’s proposals would put Social Security’s finances on thinner ice. We asked experts to weigh in.
• Mortgage Rates: Many would-be home buyers are wondering what comes next for mortgage rates. Trump’s win only further fuels the uncertainty.
• Public Service Loan Forgiveness: There is concern that Trump may end the program, since he has tried before. But that may be the wrong thing to fear.