Trump Loan Forgiveness

Every time there is a new election, regardless of whether it is a local, state, or federal one, many people start to wonder how the student loan crisis will be affected.

Different administrations have implemented various policies to tackle the issue–some to the betterment and others the detriment of loan borrowers.

It makes sense that many are worrying about how their loans and payment plans will be shaped by President Donald Trump since his appointment of Betsy DeVos as Secretary of Education has been met with mass controversy.

Since many loan forgiveness programs are funded by the federal government, these two individuals are major powers in deciding how that will be executed in years to come. While DeVos has not made her position on how to best deal with federal student loans, her first education budget alongside Trump attempted to get rid of the Public Service Loan Forgiveness (PSLF) program.

This spells major trouble for affected individuals, and could cost them billions of dollars. The budget supposedly would do away with $700 million dollars in Perkins Loans while also cutting the work-study initiatives available for students.

The Tax Cuts and Jobs Act

On December 22nd, 2017 the Tax Cuts and Jobs Act was signed into law, affecting both current students with student loans in addition to the parents who have dependent children still under their tax plan.

The good news is that section 11031 of this act no longer considers discharge student loans to be taxable income when one applies for disability discharge. If you are a disabled person, this is a major benefit since before, many chose not to apply for discharge, opting instead to use income-based payment options.

Previously borrowers with disabilities would be left with a huge tax bill by the years’ end, often impossible to pay. They were understandably scared to have their student loans discharged.

American Opportunity Tax Credit

Another piece of good news regarding the Tax Cuts and Jobs Act is that it has bettered the American Opportunity Tax Credit. This tax credit permitted up to a $2,500 deduction for certain education expenses incurred during the first 4 years of post-secondary education.

According to the Internal Revenue Service, 9 million Americans applied for it the previous year, making it one of the most popular deductions. So how does the Tax Cuts and Jobs Act improve it?

It actually increased the period during which deduction is allowed from four to five years. But this is with the caveat that the fifth year is only a $1250 deduction.

Lifetime Learning Credit

Unfortunately, there will inevitably be bad with the good. While the American Opportunity Tax Credit is getting revamped, the Lifetime Learning Credit is being repealed. This credit gave an offset of 20% on the first $10,000 of expenses spent on your education.

The difference between these two credits is that the Lifetime Learning Credit allows for deductions based on vocational spending. Getting rid of it hurts everyone seeking training and looking to gain the technical skills and trades that cannot be taught at a more standard university.

Therefore, the American Opportunity Tax Credit will indeed discriminate between the types of students taking loans.

What to Do in the Era of Trump?

The Trump administration’s attempt to dismantle the public service loan forgiveness program in their budget proposals was shot down. Congress instead passed a spending bill in March of 2018 to approve giving $350 million dollars to the Department of Education.

Keep in mind that those funds are not enough to cover everyone who applies for the program and it is still up in the air what Betsy DeVos will do as head of that department.

If Trump and DeVos were to dismantle public service loan forgiveness, there are still things you can do to protect yourself.

Make sure that your loans are in the direct loan program, do any conversions needed, and make sure that you still qualify for the PSLF. Check that your employment status is also cleared for loan forgiveness.

The best thing to do right now is to already be enrolled in the program before any legal changes are made so you can still reap the benefits.


Please dial (844) 585-0542 to speak with a representative regarding your student loan forgiveness.

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Want to learn more about Trump’s Loan Forgiveness Program? Reach out to us today is a private company and is NOT AFFILIATED WITH AND DOES NOT HAVE ANY SPECIAL RELATIONSHIP WITH THE DEPARTMENT OF EDUCATION, loan servicers or any other academic or governmental entity. You can apply for loan consolidation or other repayment options through the Department of Education (DOE) at no cost, but you are instead choosing to use services to assist you prepare and process the consolidation and repayment option application paperwork for programs offered by the DOE. does not and will not make any payments for or on behalf of Student.