The Brian Lehrer Show How Trump's Spending Law Will Change Student Loans
Jul 10, 2025
Ayelet Sheffey, a Senior Economic Policy Reporter at Business Insider, breaks down the significant impacts of President Trump's domestic spending law on student loans. She discusses how recent changes will affect the affordability of medical and law schools for borrowers. The conversation covers the elimination of key forgiveness programs, challenges in repayment plans, and rising tuition costs. Sheffey also highlights bipartisan efforts to tackle student debt and the expansion of financial aid opportunities, offering a glimpse into the evolving landscape of education finance.
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New Repayment Plan Overhaul
- The Trump spending law consolidates federal student loan repayment plans into two main options, reducing choices for borrowers.
- The new Repayment Assistance Plan limits payments to 1%-10% of discretionary income, with loan forgiveness after 30 years.
PSLF Program Intact for Now
- The public service loan forgiveness (PSLF) program remains unchanged by the new spending bill.
- However, the Trump administration is negotiating to narrow eligibility, which could affect future borrowers.
Switch From Blocked SAVE Plan
- Borrowers on the blocked SAVE repayment plan should switch to existing income-driven plans to avoid accruing interest.
- Interest on SAVE borrowers' loans will resume August 1, increasing balances if no action is taken.