Editor’s note: As President Donald Trump takes office, OPB is providing a look over the week surrounding inauguration to understand how Oregonians voted, how they’re feeling now and how the new administration could affect Northwest communities through top issues like immigration, tariffs, criminal justice and the I-5 bridge replacement.
FILE-President Joe Biden speaks at an event about canceling student debt, at the Madison Area Technical College Truax campus on Monday, April 8, 2024, in Madison, Wis.
Kayla Wolf / AP
The student loan borrower landscape is muddier than ever for the more than half a million Oregonians burdened with federal student loan debt.
Over the past 15 months, borrowers have waded through a confusing return to repayment after years of COVID-era pauses. Others waited for a Biden administration promise to cancel up to $20,000 in student loans that never materialized. And borrowers who signed up for a new and more affordable repayment plan saw their payments paused once again.
With a new administration transitioning to the White House next week following the inauguration of Donald Trump as president, borrowers could see even more disorienting changes to their loans. To clear up some of that confusion, U.S. Rep. Suzanne Bonamici, D-Beaverton, hosted a webinar earlier this month with state and national advocates to offer borrowers guidance for the uncertain year ahead.
“The student loan system is broken,” Bonamici, a senior member of the House Education and Workforce Committee, said at the Jan. 10 meeting. “It should be opening doors of opportunity for people who seek a higher education, not pushing people into financial distress.”
Below are some key takeaways for borrowers.
Keep receipts and make a plan
According to an analysis from the nonprofit Student Borrower Protection Center, there are currently more than 530,000 people with federal student loan debt in Oregon alone, owing more than $23 billion to the federal government.
“People with student loan debt are disproportionately at the mercy of the federal government and the private companies the government hires to make the system work,” Mike Pierce, Executive Director of the Student Borrower Protection Center, said during the webinar.
“I think we should be prepared for anything.”
Pierce recommended borrowers check the status of their loans on studentaid.gov as soon as possible to make sure the accounting is correct. For people working toward loan forgiveness, he advised borrowers to back up their information and take screenshots of eligible payment counts.
Pierce also said studentaid.gov provides good resources for Oregonians looking to lower their monthly student loan payments or learn more about federal loan forgiveness programs.
Borrowers who have defaulted on their loans should also expect to hear from federal collections staff this year, said Oregon’s Student Loan Ombudsman Lane Thompson. Garnishments for this group of borrowers have been paused for nearly five years. Oregon’s federal student loan borrowers have a delinquency rate of 15%.
SAVE borrowers in limbo
Most borrowers in Oregon have already made the transition back to repayment. But Oregonians who signed up for the Biden administration’s Saving for a Valuable Education, or SAVE, repayment plan have not been required to make payments since last summer. And this pause could extend to the end of this year.
Borrowers enrolled in SAVE were placed in an administrative forbearance due to a federal injunction. The Biden administration unveiled this plan in 2023 to replace the U.S. Department of Education’s other income-based repayment plans and make student loan payments more affordable. Some borrowers on the plan have had their monthly payments reduced to $0.
In Oregon, about one in every five student loan borrowers is enrolled in SAVE.
“It’s not clear what the future of the income-driven repayment program will look like due to the ongoing litigation against SAVE,” said Thompson.
Lane Thompson is Oregon's first student loan ombudsman. They are tasked with supporting the state's student loan borrowers and giving oversight to loan servicers.
Courtesy of Oregon Division of Financial Regulation
Thompson and Pierce said there are a few advantages for people in this plan who are currently in forbearance. An obvious benefit is that borrowers don’t have to make payments. In addition to that, loan balances won’t grow during this period.
“For borrowers that want to pay down their loans while they’re on the SAVE forbearance, it’s a great opportunity to do that, because you’re not being charged interest at all,” said Pierce.
Public Service Loan Forgiveness requires borrower action
There is one big downside for borrowers enrolled in SAVE. During this forbearance period, borrowers in this plan will not receive a monthly credit for the Public Service Loan Forgiveness program, or PSLF.
This program forgives the remaining student loan balance of borrowers who work in the public sector, including most nonprofit organizations, after 120 qualifying payments.
During the Biden administration, nearly 17,000 Oregonians saw their federal student loan balances erased by the Education Department through this program. Thousands more are seeking relief through the program.
Borrowers looking to rack up PSLF credits again must apply for an income-based repayment plan other than SAVE. Last month, the Education Department reopened two other repayment plans for borrowers in this predicament.
The good news, according to Thompson, is that the new administration will likely continue to process and accept qualifying PSLF applications in the future. The previous four years of the Trump administration approved fewer than 1% of PSLF applications.
“The Biden administration made changes that made Public Service Loan Forgiveness more accessible and more resilient,” said Thompson.
Future still hazy for most borrowers
On the campaign trail, candidate Trump made a lot of promises that could affect the nation’s higher education sector, including possibly closing the Education Department. The exact impact on the nearly 43 million federal student loan borrowers across the U.S remains unclear. But student loan advocates say there are a few things that are unlikely to occur.
If you were one of the more than five million Americans whose loan balance was cancelled under Biden administration executive actions, you can rest easy. Republican attorneys general and President Trump aren’t promising to reinstate debt, said Pierce. It’s still a good idea to keep records of your loan cancellation.
It’s also improbable that the U.S. Department of Education will be eliminated. An action like that would take an act of Congress. Education experts say there is little appetite from lawmakers to actually remove an established government entity and start from scratch. The same goes for ending loan forgiveness programs, like PSLF, which is written into law.
“Of all the things to worry about, the Trump administration passing a law to end PSLF is very much akin to destroying the Department of Education,” said Pierce. “It’s a talking point. It’s something that some Republicans run on. But it’s not gonna happen.”
Despite all the stops and starts of loan cancellation efforts under Biden, and the uncertainty ahead, Thompson said it’s important for Oregonians with student loan debt to remain optimistic.
“Oregon’s average student loan debt per capita is decreasing,” said Thompson. “I just like to mention this because there is some hope.”
Oregonians seeking student loan help can find resources at the state’s Division of Financial Regulation website or by calling the consumer hotline at 888-877-4894.
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