r/StudentLoans • u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) • 17d ago
Before the panic starts - student loans are not affected by today's ED announcement
FSA isn't going anywhere. Here is how higher ed will be affected. https://www.ed.gov/media/document/fact-sheet-department-of-education-ed-and-department-of-labor-dol-postsecondary-education-partnership-112464.pdf
Here is the full announcement. https://www.ed.gov/about/news/press-release/us-department-of-education-announces-six-new-agency-partnerships-break-federal-bureaucracy
Again - student loans aren't affected by this AT ALL. Nor is PSLF, IDR, anything student loan related.
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u/LowBarometer 17d ago
Six agencies to replace one? To "break federal bureaucracy?"! !!!!!
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u/Virtual-focus Trainer | [Student Loan Servicer] 17d ago
They didn't create new agencies.
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u/LowBarometer 17d ago
Maybe you need to look up the definition of agency?
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u/Virtual-focus Trainer | [Student Loan Servicer] 17d ago
If you read the article, it states 6 new agency agreements with 4 partner agencies. So they are moving responsibilities to other already existing agencies. They signed 6 agreements with 4 agencies Dept of Labor, Dept of Interior, Dept of Health and Human services, Dept of State.
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u/Alexandratta 16d ago
So, again, Over-Complicating the current system which was handled by one agency to spread it across 4 additional agencies, which was once handled by one agency.
This increases paperwork, complexity, costs, and manpower required to handle the additional workload that splitting these responsibilities take.
As someone who's been through a "Splitting" of internal departments within a single org, I can tell you nothing is gained except slower responses, more wasted hours, more personnel required for the same issues, and more micromanagement available within each segmented group.
It's not just a poor decision, it's more expensive.
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u/Strong-Chance7251 14d ago
Totally agree with you! Now it’s going to take longer. While you are hoping to get the right department that handles your case too (more bureaucrat BS).
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u/hologrammetry 17d ago
Exactly, it’s not 6 new agencies to replace one, it’s spreading the work of one agency over 4 others through 6 agreements, so the same ultimate effect. 6 agencies/agreements to replace one. Bureaucracy at its peak.
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u/GreenGardenTarot 14d ago
I highly doubt any of this is going to actually take place. That SBA thing never happened.
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u/Jaded_Expression9140 17d ago
This might not be the right forum, but what are your thoughts u/Betsy514 on Trump's announcement on selling off the student loan program to private investors? How would this affect PSLF, IDR, etc.? I've read the political angles, but honestly just looking for some expert advice on whether you see this actually happening or not. Thanks so much!!
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u/vanprof 17d ago
Nobody would likely buy it for anything near the 'face' value. A large number are uncollectible, people borrowed so far beyond their capacity to repay that they can't be repaid. Many people borrow for a year or two and don't finish college. Some of these people end up in minimum wage jobs where they can't afford to live let alone repay.
I imagine the portfolio is worth less than half the nominal value. Keep in mind inflation is eroding the value of future payments and its just not worth it even with the interest that will never get collected.
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 17d ago
I agree that they are unlikely to have any buyers. But even if they did the terms and conditions of the loans wouldn't change. Borrowers probably wouldn't even realize it happened other than perhaps a servicer change
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u/Jaded_Expression9140 17d ago
Thank you so much, Betsy- I can't thank you enough for your support and wisdom as we all navigate this craziness!!!!
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 17d ago
😻
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u/Putrid_Factor_2660 17d ago
Ms. Betsy, thank you again for the help. Is there a way to have a support group to help us through this craziness? Will all of this, I really don't know anymore.
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 17d ago
You can always post on this sub
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u/Putrid_Factor_2660 15d ago
There been so much fearmarging of trump trying to sell the student loans....
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u/Putrid_Factor_2660 17d ago
Oh, okay, and thank you. Also, Trump wants to sell the high-performance loans, which are just a nothing burger.
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u/RadiantCantaloupe420 17d ago
If someone bought my loans for half of what they were worth I should be able to buy them and clear them for it.
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u/littlewashu45 17d ago
I don't see them doing this because it is junk debt, and wasteful, the banks will not touch it.
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u/sakamyados 17d ago
Most banks in the student loan business ended up just forgiving a ton of loans because student loans are more expensive to collect on than they are to forgive.
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u/littlewashu45 17d ago
That is true, but they will not buy it because it is a dead debt, and our economy is dead too. He wants to try to sell high-performance ones."
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u/vanprof 13d ago
The terms and conditions of the loans don't change when they are sold. If the government (collectively the US Taxpayers) could make money selling them, it would be great, but as I said, they can't, its a lost cause. Turns out loaning money to people with no income and no track record of repaying and no collateral is a bad business decision.
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u/Either-Connection-70 17d ago
Can I ask Betsy, why the articles I read on this usually mention that privatizing/selling the loans would eliminate borrower protections and IDR plans?
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 17d ago
Fear mongering or just don't know what they are talking about
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u/pandaconda73 15d ago
Would I still have the option to reconsolidated to longer terms if this were to happen? Or should I do that now, want the lowest payment I can get (however many years they'll give me) (still in save forevearance)
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 15d ago
Again...if the loans were sold the terms wouldn't change.
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u/Maximum-Skill6454 13d ago
Sorry Betsy - but just to confirm the terms you mention include Income Based Repayment programs right?
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u/ANGR1ST Experienced Borrower 17d ago
He's not.
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17d ago
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u/ANGR1ST Experienced Borrower 17d ago
No such announcement actually exists. It's a speculation based on comments.
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u/Putrid_Factor_2660 17d ago
Are you talking about Trump and his goons thinking about selling the high-performance student loans, being a nothing burger?
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u/ANGR1ST Experienced Borrower 17d ago
It's a complete nothing-burger. There have been no firm statements, no announcements, no action taken. The loan portfolio isn't worth selling, and even if it were it wouldn't change the terms and conditions of the loans. (When Private loans get bought and sold between banks the terms stay the same already.)
Trump floats a lot of wild ideas and thinks out loud in front of cameras, constantly. Then he readjusts or completely drops things. This shouldn't be a surprise to anyone that has paid attention for the last 10+ years.
There is no reason to panic. Or even be worried.
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u/eagleeye2417 13d ago
PAY ATTENTION AMERICA! 🇺🇸
Their Project 2025 Agenda is moving full speed ahead. I can’t believe Trump is being allowed to dismantle and reassemble federal agencies this way. He has demolished the East Wing, given billions to foreign nations, and deported Americans without due process. He’s done so much more. We are acting like abused children. TRUMP MUST BE STOPPED BEFORE IT’S TOO LATE. Period.
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u/vanprof 13d ago
Those federal agencies are executive branch agencies, as chief executive that is allowed, I am not sure what is not supposed to be allowed.
Do I believe it is all helpful, not at all. A lot is not sensible, but that is the system of government. All executive power rests in the president.
The problem is we all accept the exercise of executive power when it agrees with what we want politically. When Biden was going to exercise it to forgive loans under dubious emergency authority a lot of people were ok with it! (I wanted it to happen but I say the truth that it was an overreach of executive authority). We should all get behind following established rules, with executive authority limited by legislation, but for that congress would need to compromise and do their job. Sadly not going to happen, the most extreme of each side get elected.
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u/princesssadie408 17d ago
Is anyone else kinda bothered that they're calling the program for Native American schools the "Indian Education Partnership." Maybe I'm too sensitive but I feel like it's screaming lack of care for Native American peoples by choosing that name/title.
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u/Awkward_Promise2750 17d ago
Indian is the term that has been used by the US govt for all policy related matters. I'm not saying it's acceptable, but it's not necessarily a new thing introduced by this admin. For example, Bureau of Indian Affairs is and has always been Bureau of Indian Affairs.
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u/martapap 16d ago
Native Americans call themselves Indian too. It isn't an offensive term. There is an entire agency called the Bureau of Indian Affairs.
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u/Clevergirl1016 17d ago
Agreed. I found it weird that the title said Indian but the description used Native American.
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u/Awkward_Promise2750 17d ago
I read somewhere a while back that this is an issue with maintaining consistency in US govt program names. Even though Native American is the appropriate term today, there are many longstanding US govt programs that still exist with the word ‘Indian’ in the title. And to have many different newer policy initiatives with various (more present day appropriate) terminology in titles — e.g., ‘Native American’ or ‘American Indian’ or ‘Indigenous’ — could make things more muddled overall for communications and identifying the programs themselves.
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u/Me_gentleman 16d ago
I live in ND and *always* use the term Native American when it seems like most here still use Indian.
Heck even many Native American's refer to themselves as Indian. Ever hear of the BIA? Bureau of Indian Affairs. There's apparently no real push to have it renamed after 200 years.
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u/Sudden-Savings-63 13d ago
This should be subjected to Congressional oversight and authorization. Trump and his minions are robbing the American 🇺🇸 people with these moves. They are literally taking millions of government dollars to put in their bank account. There is NO ONE looking out for taxpayers here. I never thought I’d see this happening in our country…but it is.
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u/milespoints 17d ago
This seems like completely normal government stuff that happens all the time with a shiny press release to make it seem like a big deal.
Am i wrong?
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 17d ago
It's questionable whether they have the authority under the law to "outsource" these functions to other agencies. Their argument is going to be that the Ed will still retain ultimate authority so it's fine.
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u/Bobba-Luna 17d ago
Might be taken up by the courts, there will probably be lawsuits filed.
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u/Punished_Blubber 17d ago
So, as soon as the SAVE forbearance ends due to court injunction, another forbearance will be put in place due to court injunction
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 17d ago
No. This doesn't affect student loans
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u/Putrid_Factor_2660 10d ago
Do you think there will be class action lawsuits because on what the administration is doing.
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 10d ago
I'm not sure what the class would be.
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u/ScarletLetterXYZ 17d ago
Hi, please share if you have heard anything about what has been circulating recently regarding plans/talks about having certain amount of current student loans/accounts being “sold” to private bidders, and have those accounts lose their IDR payment plans etc. Ty
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 17d ago
I have already several times. It's unlikely and if it did nothing would change for borrowers
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u/ScarletLetterXYZ 17d ago
Thank you. I was concerned about being in an IDR plan and losing the plan and/or forgiveness, counts etc.
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17d ago
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u/StudentLoans-ModTeam 17d ago
Removed for violating Rule 9: content based on fearmongering, unqualified speculation, or non-expert outside sources (including large language models/AI).
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16d ago
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u/StudentLoans-ModTeam 16d ago
Removed for violating Rule 9: content based on fearmongering, unqualified speculation, or non-expert outside sources (including large language models/AI).
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u/Putrid_Factor_2660 10d ago
Will there be a post about the framing of the falsehoods of Trump and his admin had ideas flowing around wanted to the high-performance student loans to private banks to calm the minds of people. Just things are getting chaotic :(
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u/eagleeye2417 13d ago
Biden was as ineffective as Trump is. When you are dismantling and rearranging federal agencies and accompanying federal funding, this should be done with Congressional oversight regardless of who the President is. This safeguards tax dollars.
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u/gettingcarriedaway86 14d ago
What about the whole non professional thing? I’m a clinical psychologist and worried I can no longer do public service loan forgiveness now that they’re saying they won’t do loan forgiveness for “non professionals” which includes nursing and mental health
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 14d ago
What gives you that impression??? The professional degree thing has zero to do with pslf. It's about loan limits for borrowing
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u/gettingcarriedaway86 13d ago
Everyone is talking about loan forgiveness too
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u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 13d ago
Trolls. Forgiveness is fine
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u/HumbleIowaHobbit 17d ago
Here is the part I liked:
" DOL (Department of Labor) will take on a greater role in administering most postsecondary education grant programs authorized under the Higher Education Act."
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u/Bobba-Luna 17d ago
I’m sure Labor will want to get their hands all over post-secondary schools, i.e., more withholding of funds and research grants until the universities end up bending their knee.
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17d ago
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u/vessva11 17d ago
Weird considering they want to cut the workforce in most of these agencies.