What we know about Donald Trump’s student loan debt deal
Here’s all you need to know about the agreement struck regarding student debt.
Even a broken clock is right twice a day.
Let’s bring you some good news, enough of the negative cycle of doom that modern day news webpages tend to be (unless you’re a Blue Jays fan).
The Trump administration has folded and agreed to expedite student loan forgiveness under a new court-supervised plan, resolving an ongoing legal dispute with the American Federation of Teachers (AFT).
Do I have to pay back my student loan?
This agreement means that the Department of Education will cancel eligible borrowers’ debts by December 31, 2025, under income-driven programs (IDR), including Pay As You Earn and Public Service Loan Forgiveness (PSLF).
Additionally, borrowers will not be taxed on forgiven amounts, taking away concerns over a scary sounding “tax bomb” in 2026.
“For nearly a decade, the AFT has fought for the rights of student loan borrowers to be freed from the shackles of unjust debt—and today, a huge part of that affordability fight was vindicated,” AFT President Randi Weingarten said. “This year, we took on the Trump administration when it refused to follow the law and denied borrowers the relief they were owed.”
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“Our agreement means that those borrowers stuck in limbo can either get immediate relief or finally see a light at the end of the tunnel. And, crucially, they won’t ever get taxed on that relief,” Weingarten added. “The AFT will hold the federal government to its word, and we won’t stop fighting until college is affordable and taking out a student loan doesn’t trap millions of Americans in a ruinous and exploitative debt cycle.”
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