Trump’s Student-Loan Overhaul Continues Amid Government Shutdown

UPDATE: The U.S. Department of Education is pressing forward with negotiations over President Donald Trump’s student-loan repayment overhaul, even as the government shutdown extends into its second week. This critical move aims to reshape borrowing caps and repayment plans that could affect millions of students.

Despite the shutdown, which has halted many government activities, officials confirm negotiations will continue, with significant changes anticipated to be finalized by July 1, 2026. The Trump administration is prioritizing this overhaul to implement key provisions from the “One Big Beautiful Bill Act,” signed into law earlier this year.

In a statement, Jeff Andrade, deputy assistant secretary for policy, emphasized, “Failure to actively continue work towards promulgating these regulatory changes would substantially impair otherwise funded programs, like Pell Grants and direct loans.” This indicates the administration’s commitment to maintaining momentum on these vital reforms, which could reshape the landscape of student debt in the United States.

Negotiators will tackle pressing issues, including proposed caps on borrowing for graduate and professional students. The Trump administration has eliminated the Grad PLUS program, previously allowing students to cover full attendance costs. New caps are set at $20,500 per year and $100,000 over a lifetime for graduate students, while professional students face limits of $50,000 annually and $200,000 total.

Concerns are mounting among stakeholders regarding these caps. Bennett Boggs, a commissioner from the Missouri Department of Higher Education & Workforce Development, voiced significant apprehension about the potential impact on essential state professions, stating, “There are some professions here that are crucial to our state economic development… this list doesn’t have it.”

The overhaul includes plans to eliminate existing income-driven repayment options, replacing them with a standard repayment plan and a new Repayment Assistance Plan, allowing for balance forgiveness after 30 years. Borrowers with loans issued before the implementation date will retain access to existing plans, while new borrowers must navigate the revised system.

The negotiations are live-streamed for public access, allowing for transparency as stakeholders provide input. However, due to the ongoing shutdown, updates and proposed texts from the Department of Education will be delayed until government operations resume.

As discussions progress this week, public comments will be welcomed before the Department finalizes plans for implementation. The outcome of these negotiations could dramatically influence the financial futures of countless students, making the urgency of these discussions even more critical.

Stay tuned for further updates as this story develops. The changes proposed have the potential to affect student debt relief for many, making it imperative for stakeholders and borrowers to remain informed.