Trump’s Student-Loan Overhaul Negotiations Continue Amid Shutdown

URGENT UPDATE: Negotiations for President Donald Trump’s significant student-loan repayment overhaul are proceeding into their second week, despite the ongoing government shutdown. The Department of Education confirmed today that discussions will continue on vital changes to borrowing caps and repayment plans.

The Trump administration is determined to implement these reforms, which were formalized in the “One Big Beautiful Bill” signed into law in July. The current negotiations focus on proposed new borrowing limits and the elimination of income-driven repayment plans, aiming for implementation by July 1, 2026.

During the first negotiation session earlier this month, Jeff Andrade, deputy assistant secretary for policy, emphasized that the shutdown would not hinder the rulemaking process. “Failure to actively continue work towards promulgating these regulatory changes would substantially impair otherwise funded programs,” Andrade stated. This commitment underscores the administration’s urgency to finalize the overhaul, which could affect millions of borrowers.

Key changes on the table include a significant restructuring of borrowing options. The proposed reforms eliminate the Grad PLUS program, which previously allowed graduate students to borrow the full cost of their education. Under the new plan, graduate students would face a borrowing cap of $20,500 per year and $100,000 over their lifetime. For professional students, the limits would be $50,000 annually and $200,000 in total.

Concerns are rising among negotiators regarding the impact of these caps. Bennett Boggs, a commissioner from the Missouri Department of Higher Education & Workforce Development, expressed worries that the proposed limits could hinder essential workforce development by excluding crucial programs. “This list doesn’t cover some professions vital to our state’s economic growth,” he warned.

Additionally, the Department of Education plans to replace the existing income-driven repayment options with two new plans: a standard repayment plan and a Repayment Assistance Plan, which would offer forgiveness of remaining balances after 30 years. Borrowers with loans taken out before the implementation date will retain access to the current plans, while new borrowers will have to adopt the Repayment Assistance Plan.

The negotiations are being streamed live for public viewing, but key documents from the department remain unavailable due to the shutdown. As negotiations advance, the public will have opportunities to comment on the proposed changes.

With the potential impact on millions of borrowers, the urgency surrounding Trump’s student-loan repayment overhaul cannot be overstated. Stakeholders are advised to stay tuned for further developments as negotiations progress this week.