President Trump and Future of PSLF

Since President Trump has been in office, we have seen a rise in concerns of the future PSLF.

We do not believe PSLF will be retroactively eliminated, for a number of reasons, some of which we blogged about earlier.

We do not see President Trump eliminating the PSLF program also because during his campaign, he basically offered a student loan plan that would be almost as generous as the PSLF program, capping repayment at 12.5% of a borrower’s income with forgiveness after 15 years of payment.

President Trump’s student loan plan reduces the payment period from 20/25 years under IBR/REPAYE/PAYE to 15 years. In comparison, the 10 year forgiveness under PSLF is merely 5 years less than 15 years (oh math!).

We believe that the extreme reduction in the payment period from 20/25 years to 15 years is an indicator that President Trump does not view the PSLF 10 year forgiveness term unfavorably.

Arguably, the PSLF 10 year term should be even further reduced, perhaps proportionally to 6-7.5 years, given the drastic reduction in the IBR/REPAYE/PAYE repayment period. We will what happens and keep you updated.