November 19, 2025 • 40 mins
The Student Debt Crisis Center takes over the airwaves of 'the Leslie Marshall Show,' where they cover the newest student loan updates, actions folks may need to take, potential changes to repayment plan options and forgiveness programs, and how you can make sure that you have the lowest monthly payment.
This episode's SDCC hosts are President and Founder, Natalia Abrams, Executive Director, Sabrina Calazans, and Communications Associate Ángel Rentería.
The Student Debt Crisis Center (SDCC) is a 501(c)(3) nonprofit that centers the needs and voices of borrowers, and partners with allies, to impact public policy and end the student debt crisis.
The SDCC website is www.StudentDebtCrisis.org and their handle on X, Instagram and Facebook is @DebtCrisisOrg.
Their handle on BlueSky is @debtcrisisorg.bsky.social.
This episode's SDCC hosts are President and Founder, Natalia Abrams, Executive Director, Sabrina Calazans, and Communications Associate Ángel Rentería.
The Student Debt Crisis Center (SDCC) is a 501(c)(3) nonprofit that centers the needs and voices of borrowers, and partners with allies, to impact public policy and end the student debt crisis.
The SDCC website is www.StudentDebtCrisis.org and their handle on X, Instagram and Facebook is @DebtCrisisOrg.
Their handle on BlueSky is @debtcrisisorg.bsky.social.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Leslie Marshall Show, the only true democracy and talk
radio of four and by you the people, live nationwide
and streaming live at Leslie Marshallshow dot Com.
Speaker 2 (00:19):
Good morning, good afternoon, and welcome to the Leslie Marshall Show.
I'm Natalia Abrams, President here at the Student Debt Crisis Center,
and this is our SDCC takeover of The Leslie Marshall Show.
I cannot believe we haven't been here since this summer.
I think July was the last time that we were
talking to you about student loan debt. So we're going
(00:40):
to use all of this time to catch you up
as always on everything student loans. Today I am joined
by the wonderful Sabrina Klazans, our executive director here at
Student Debt Crisis Center. Hello, Sabrina, how's it going? Dang well?
Speaker 3 (00:56):
Thanks for having me, Natalia.
Speaker 2 (00:58):
Of course, And we also have one of our newest
members to Student Debt Crisis Center, Angel Rentoria. Am I
saying that right?
Speaker 4 (01:06):
Angel?
Speaker 2 (01:06):
I always get it wrong?
Speaker 4 (01:08):
Yes, that's right, Healia. Hi.
Speaker 2 (01:10):
Angels are communications associates and we're here to discuss and
unpack everything student loan debt. So just a reminder that
at Student Debt Crisis Center. We believe that by centering
the needs and voices at Borrowers and partnering with allies,
we will impact public policy and finally, once and for all,
in the student debt crisis. If you want to learn
(01:33):
more about the work we do at SDCC, be through
Borrowers stories, get education for your own student loans. You
can visit our website at studentdet Crisis dot org, or
you can find us on all social media channels all
handles at Debt Crisis Org. That's on Facebook, Twitter, Instagram,
and Blue Sky. So with that, we have a lot
(01:56):
to cover today. We say this every time we do
a radio show, but this is really important right now
that you're going to hear us talk about how things
are changing day by day in the student debt space.
The information we are discussing today today is Wednesday, November nineteenth,
at three pm. Like who knows what could happen and
even in the next few hours. So if you're listening
(02:18):
to this in the next few days, always check on
the most recent news because as I mentioned, things are
always very fast changing in this space. So last time
we were here, the so called Big Beautiful Bill, we
did not name that had just been signed into a
lot of days before. This was the reconciliation the overall
(02:39):
budget process, so lots of changes to lots of different issues.
But again we're going to focus on student loan debt
and now we've had some time from our team to
untangle the proposed changes. How this is looking to be finalized.
It's actually spoiler alert. We're going to get into it,
but nothing is final final yet. But we'll go over
(03:01):
what we know of these changes as of now and
the major overhaul that's coming to the student loan system
beginning next year. So with that, Sabrina, would you like
to cover kind of the big talking points or big
changes when it comes to the OBBA, which is what
we'll call that so called Big Beautiful Bill.
Speaker 4 (03:23):
Yeah.
Speaker 3 (03:24):
So, once the one Big Beautiful Bill was passed in
July twenty twenty five, the changes are actually not finalized,
as you just said, Natalia, they had to go through
a process called negotiated rulemaking or NEGREG. It's essentially a
stakeholder based regulatory process that's coordinated by the Department and
all of these stakeholders. Now there are two processes that
(03:46):
we've been following along closely. The first one is called
RISE and the second one is called a HEAD and
the goal of these processes is to discuss the student
loan changes and the higher education changes that are in
that bill. Now, we've been following along with the RISE
in NEGREG because that one specifically will impact student loan changes,
(04:07):
and so we have just seen RISE wrap up its
meetings and now we're waiting for that final rule to
be released. But the things that we're looking out for
to come out of these final rules is changes to
repayment plan options. We're going to see some payment plans
go away while a new one is going to be created.
(04:29):
We're also going to see implementation of lending limits to
student loans, which is going to be a really big
deal for folks to keep in mind. But those are
just some of the few changes that we're going to
be seeing when it comes to this process. Now, the
big date, and we're going to be seeing this multiple
times today is July first, twenty twenty six. That is
going to be the beginning of implementation, and it's going
(04:52):
to continue on towards twenty twenty eight and onwards. But
July first, twenty twenty six is a really big key
date for folks to keep of mind. On today's show,
we're going to cover a lot of different topics as well,
and that's going to include a few lawsuits that we've
seen that are challenging upcoming public service loan forgiveness changes.
(05:13):
We're also going to see a lawsuit about loan discharges.
You might have seen that in the news, that folks
are going to get their loans canceled after a really
long time or forgiven excuse me. And we're also hearing
about ten million Americans who are falling into default on
their student loans. And you know, we just had a
government shutdown. Folks are struggling. We're seeing a lot of
(05:35):
layoffs happening. There are so many different pieces coming together
that are impacting student debt, and that student debt is
causing harm to people in their everyday life. It's just
been overwhelming, to say the least.
Speaker 2 (05:48):
And I mean, just to be clear, this impacts parents, parents,
people with student loan debt, people that are in school,
people that are looking to go to school, kind of
anyone that wants to access higher education. By starting July
first of next year, we'll see impacts and there's already
(06:08):
some impacts that have taken place as of today. Is
that correct, Sabrina, Yeah.
Speaker 3 (06:14):
That's correct. There's already lots of impacts that are happening.
Speaker 2 (06:19):
So, Sabrina, let's talk about the repayment plans. You know,
this is when you take out a loan, you are
given a set amount that you have to pay back
for your standard payment, which is in ten years, and
many borrowers can't afford to do that, so they enroll
in what we call income driven repayment or IDR programs. Sabrina,
(06:42):
how is that going to change for a student loan borrowers?
Speaker 3 (06:48):
So there's going to be a few different things here.
If someone as student loans or takes on or consolidates
a student loan beginning on or after first twenty twenty six,
you are going to have limited repayment options. You're going
to have a new version of the standard plan, and
you're going to have access to only one income driven
(07:10):
repayment plan called the WRAP Plan. The Wrap Plan will
be available to all borrowers except for parent plus loans,
and the new standard will be available to all new
loans on or after July first, twenty twenty six. Now,
the Wrap Plan is going to be based on a
thirty year timeline. W SOE, We're going to see an
extension of repayment taking place thirty years. It's a mortgage, yeah,
(07:37):
no zero dollar payments on wrap. It's going to be
a minimum of ten dollars with that plan. And thinking
about the new loans taken out you mentioned parents, parent
plus borrowers are not going to have access to any
income driven repayment plan, meaning your payment is going to
be based on your loan balance. If you lose your job,
(07:59):
you I won't be able to call your servicer and
say I need to lock in as your dollar payment
because I have no income. They're going to keep sending
you the bill each month, and that's going to harm
so many people out there because we're seeing the cost
of college increase and parents having to take on debt
for their children.
Speaker 2 (08:16):
Absolutely, and just to clarify, this is for parent plus
like new parent plus loans after July first of twenty
twenty six. As Sabrina said, you're going to hear that
date a lot. If you have a parent plus loan
and you're hearing us right now and you're freaking out.
If you haven't already, you can consolidate into the direct
loan program and then enroll in some of the other
(08:39):
income driven repayment programs. So if you're not looking to
borrow for your child post July first, twenty twenty six,
there is still a little bit like silver lining. What
about the other plans Sabrina, There has been like pay
as you are the Stay plan that we get, you know,
a thousand million questions about right, what are going on
(09:00):
with those plans?
Speaker 3 (09:02):
So pay the pay as you earn, the Income Contingent
Repayment and the Safe Plan are also going to go
away at some point, and that's going to be between
July first, twenty twenty six and July first, twenty twenty
eight at the latest. It's going to be within that
time frame. Now, folks will still have access to the
income based Repayment Plan and the WRAP Plan, So IDR
(09:24):
plans are not going away all all together. They are
still going to continue to exist, but barwers that are
enrolled in those plans at some point will need to
take action to switch out of those plans. Before they're
faced out. You will receive communication from the Department of Education.
We at Student Debt Crisis Center will also be communicating
these changes so that you're up to date on what's
(09:47):
going to take place. So definitely sign up for our
mailing list if you aren't on it already. But you know,
these are big changes. These are plans that people are
accustomed to, many have been in them for many years,
and people could see their payments increase depending on what
they're enrolled in.
Speaker 2 (10:04):
Yeah, it's so much. Again, we're still entangling it. We
know if you're listening, this could be confusing. If you've
heard this five times, you could still be confused or
ten times. We will be hosting a ton of student
loan workshops between now and the end of next year,
so I really encourage you. We always say it's not
a shameless plug to go to Studentdebt Crisis dot org,
(10:27):
sign up for a mailing list, take a look at
our calendar, which posts all of our upcoming workshops. We're
having a reconciliation one I believe next month that goes
far more into depth on what we're talking about. I
want to talk about loan limits, Angel, but you know,
I want to make sure that we have enough time
with the break. So just again, Sabrina, can you just
(10:49):
go over like this is impacting who.
Speaker 3 (10:53):
We're going to be right back actually, and then we'll
keep talking.
Speaker 2 (10:56):
Oh, thank you.
Speaker 3 (11:04):
Welcome back to the Leslie Marshall Show. Folks. My name
is Sabrina Callasans and I'm with the Student Debt Crisis Center.
I'm here with Natalia at Abrams and Angel Rentarea, and
we are taking over for the Leslie Marshall Show. Now,
before the break, we were talking about some of the
many changes that are taking place in the student loan system.
So we talked a little bit about the changing repayment
(11:26):
plan options. You know, we hinted at the lending limits
that are going to be taking place. So I want
to dive into the lending limits a little bit more. So, Angel,
can you walk us through what we are you know,
expecting to see beginning next year when it comes to
these lending limits.
Speaker 4 (11:43):
Yeah, of course.
Speaker 5 (11:44):
So we've already mentioned a lot throughout the show that
July one, of twenty twenty six is a date that
many of these changes might be taking place. The reason
I say night is because these might be subject to change,
so nothing is set in stone just yet. We have
to yet see how the outcome of the negotiated rulemaking
(12:07):
and the implementation of these excuse me of these of
these outline things in the bill, So let's just get
into it. Grad students, if you are looking into pursuing
grad school, so getting your masters, continuing on after getting
your bachelor's, there is a limit of twenty point five
(12:28):
K that's twenty thousand, five hundred dollars per year, with
a total of one hundred thousand dollars lifetime limit. For
professional students we're talking about those advanced degrees, dental, veterinary, medical, law,
anything along those lines, there is a limit of fifty
(12:49):
thousand dollars per year with a total of two hundred.
Speaker 4 (12:53):
Thousand dollars of a lifetime limit. Now, parent plus loanholders,
if you're looking into borrowing for your or if your
children in the future may be pursuing higher education, there
is a maximum of twenty K that's twenty thousand dollars
per dependent with a maximum of sixty five thousand dollars
(13:13):
per dependent. And I think one of the biggest changes
that we are seeing is that the federal government is
now putting aggregate loan limit for all borrowers except parents
plus borrowers that is two hundred and fifty seven thousand,
five hundred dollars. And one thing to keep in mind
is that this amount does not include and is regardless
(13:37):
of any money that you repaid back to the Department
of Education or if it gets forgiven. So even if
you repay your loans that you took out and you
met that threshold, you can no longer take out additional loans.
One thing that you can keep in mind planning into
(13:57):
the future, if you are an existing bar and you
are enrolled in a full time per RAM so if
you're in school and you take up a direct loan
by June thirtieth of next year, twenty twenty six, you
are exempt from new borrowing taps for up to three years.
And like I said, these are really big changes to
(14:19):
the system, and they don't even cover all of the
changes that.
Speaker 5 (14:22):
Are set to take place. So again, this is just
kind of the tip of the iceberg of this big issue.
Speaker 2 (14:29):
Yeah, if I could just jump in, I mean, we're
seeing certain private institutions I'm in Los Angeles, like the
University of Southern California, when you have room and board
be very close to one hundred thousand dollars per year,
so you can even get out of undergrad with these
alone limits, let alone professional programs. We talked to doctors,
(14:51):
social workers, those type of degrees that have two hundred
and fifty to five hundred thousand dollars. This is people
that have been you know, borrowed loans ten year years ago. Yep.
It's just going to make it so so many people
aren't able to complete their education.
Speaker 3 (15:07):
Yeah. I think people are either not going to be
able to complete education, folks are going to be discouraged
from even pursuing these degrees. To begin with. We're seeing
a shortage of teachers, of doctors, of lawyers across the country,
and this is really going to unmotivate people from being
able to pursue that, especially if they don't have generational
wealth or access to wealth. If folks are capped out
(15:31):
on student loans, that's one on the federal level, that's
one problem, and then there's also private student loans, which
we know the interest breaks are a lot higher, there's
no repayment plans, there's fewer protections. But also not everyone
qualifies for the private loans either, So that's a whole
other ballgame there. And so we can see skyrocketing amounts
(15:51):
of debt in the private portfolio as well.
Speaker 2 (15:54):
So this is, you know, not easy stuff to talk about.
Speaker 3 (15:59):
No, unfortunately, there are worst news for us to cover,
but I do want to preface that there's also good
news at.
Speaker 2 (16:07):
The end of all of this.
Speaker 3 (16:08):
So we will discuss the good news, but let's dive
into unfortunately the bad news for right now, and that
is actually regarding the Public Service Loan Forgiveness program. So
if folks are unfamiliar with that, Natalia, can you just
talk through what PSLF is.
Speaker 2 (16:23):
Yeah, So, Public Service Loan Forgiveness, which started in two
thousand and seven, is a great program. It's still around.
If you work in a public service job. These are teachers,
you work for a nonprofit hospital, police officer, work at
a nonprofit especially, and are in repayment for ten years.
(16:46):
After ten years, the remaining amount of your loans are forgiven.
Most people that are in Public Service Loan Forgiveness are
also in one of these income driven repayment programs. That's
why the two really work well together. The goal is
to pay as little as possible and had the most
amount forgiven. It was also for people that took on
three four hundred thousand dollars in student loan debt to
(17:08):
then go into a job that maybe paid them fifty
sixty thousand dollars a year and encouraged people to go
to school.
Speaker 3 (17:15):
But but there are some real negative changes coming to
this program unfortunately. I mean, we've worked with barrowards, we've
seen the benefits of ps left, We've seen people be
freed from that huge burden. I mean people have you know,
as little as twenty thousands to hundreds of thousands. It's
life changing. And now we're seeing, or we've seen an
(17:39):
attempt to ultimately alter this program that's going to impact
a lot of folks. So Angel, can you start us
off with what's happening with Public Service lo and forgiveness
and then after the break will continue on right.
Speaker 4 (17:52):
Of course, again hate being the bearer of bad news, but.
Speaker 2 (17:56):
Yeah, and the SI just to clarifyng this came from
an executive order earlier this year from President Trapp.
Speaker 5 (18:02):
Yes, so this was outlined by that executive order, and
right now we're seeing the intent to limit employer eligibility
for the Public Service Loan Forgiveness program. And there's a
couple of actions that if organizations or even governments take
place in will disqualify them from the program, and these
(18:25):
are the following. Again, this is verbatim from what's on
the the action, the executive action. We are not necessarily
saying this, but quote unquote, if these organizations are violating
federal immigration law, facilitating illegal immigration, violating state law, or
providing gender firming care for transgender youth, they would be
(18:48):
deemed ineligible employers. And we'll touch a bit more into
the specifics.
Speaker 4 (18:55):
Of these outlined the why and the how.
Speaker 5 (19:00):
But this is extremely alarming as it will push out
millions of borrowers from the public service loan forgiveness program
as their employers become ineligible.
Speaker 2 (19:11):
Yeah.
Speaker 3 (19:13):
So yes, as an organization, we've been tracking all of
this for trying to keep up with what's going on.
So we will definitely be diving in a little bit
deeper on what this means and what actions folks can
take to prepare for these changes to take place. But
there's also good news in the legal sector if that
we'll talk about that too, So just keep that in mind,
(19:33):
but stick with us. There's a lot more to discuss here.
This is the student debt crisis signer takeover of the
Leslie Marshall show, and we'll be right back.
Speaker 2 (19:49):
All right. Welcome back to the Leslie Marshall Show. I'm
the Talia Abrams, joined here again by Sabrina Calazans and
Angel Venturia. For the bait break, we were discussing and
just getting into the again potential changes to the public
service loan forgiveness. We are discussing the good, the bad,
(20:10):
the ugly. Trust me, there will be some good or
a little bit of bright side at points in our
radio show. But Angel, let's get back to what's going
on and where we're at with this executive order that
the Trump did earlier this year, but now we're getting
closer to it actually taking impact.
Speaker 5 (20:30):
Right, So just for quick context, the PSOLF program has
been around for nearly twenty years and is a bipartisan program,
but I implement it by Congress. And these changes essentially
are alarming since it can bar multiple organizations housed under
one employer Identification number or an ai IN. For example,
(20:51):
if one organization under a shared in is deemed it eligible,
every other organization under that A also becomes ineligible, and
this will just strip PSLF eligibility from countless public service workers.
For counting on this vital program to deliver life changing relief.
There's also an opportunity that's also very alarming, for these
(21:15):
organizations to go ahead and engage in a corrective action
plan with the Department of Education, essentially doing with the
Department of Education requests them to do in order to
regain the eligibility, otherwise they will lose.
Speaker 4 (21:31):
It for ten years.
Speaker 5 (21:32):
And this is essentially how we see it, a weaponization
of the PSLF program in order to ensure that these
public sector entities align with the political agenda of Washington, DC.
And it's just super disheartening and we'll have insane ramifications
on countless borrowers.
Speaker 2 (21:53):
Yeah, this is an attack on free speech. A reminder
that right now this isn't implemented yet. We're looking potentially
at this summer. However, here are some of the silver
lining that the American Federation of Teachers, many of the
Sanctuary cities and other nonprofitably ANYA as well, so BRINDA
(22:17):
in the National Education Association has sued to block this.
If folks you know that are dealing with the safe
plan right now, they know this lawsuit has been going
on now for a couple of years. These lawsuits can
definitely prolong the implementation of this Public Service Loan Forgiveness rules.
So if there's one takeaway right now, it's that the
public Service Loan forgiveness still exists and nobody is being
(22:40):
impacted today. So, Brinda, what recommendations do you have for
anyone who is pursuing PSLs before we move on?
Speaker 3 (22:49):
Yeah, so, I think anyone who is pursuing public service
loan forgiveness should go onto Studentaid dot gov and use
the Public Service Loan Forgiveness Help Tools ps LEFT help
tool that is where you certify your employment. You basically
put the date the dates of employment that you've been
working for a qualifying employer. You could then choose to
(23:10):
have the employer or a previous employer manually or digitally
signed off and verify that you did in fact work
for them. We recommend doing the digital signature. It's been
processed more quickly than the manual option. So going through
that help tool, you can do so now if you
haven't done it already. But we also recommend maybe you
(23:30):
know a month or very close to that July first date,
just in case, so that you can have as many
credits counted towards the one hundred and twenty credits needed
for public service loan forgiveness. So we definitely recommend that
and just you know, keep an eye out for headlines
in the news. As Natalia said, it could be that
(23:52):
that July first date is extended. It does take a
really long time. And there are actually three lawsuits against
this rule, which is really great, as you said, the
labor unions and different nonprofits and cities. There's also the
attorneys general that are suing from more than twenty states.
And then there's another lawsuit that I'm not quite familiar
with but we know is also going on. So there
(24:15):
is good news in a little bit of a silver
lining here that this government overreach is unacceptable and folks
are speaking out against it.
Speaker 2 (24:22):
Let's continue on the good news right now, since we've
delivered so much bad news at the beginning. So our
partners at the American Federation of Teachers Protect Borrowers have
sued the Department of Education and regarding in regards to
the pause on income driven Repayment APPLICATIONSSSING application processing loan
(24:44):
forgiveness discharges. If you remember from July, I know that
was a long way back. There was more than one
point five million backlogs of these income driven repayment applications
that we're not being processed Command's Department of Education with
delaying loan forgiveness discharges. This is for people that have
(25:05):
public service loan forgiveness and have completed that ten years
or their twenty or twenty five years on income driven repayment.
The Brino wanna you continue us on with the good news.
So what was the outcome of this lawsuit?
Speaker 3 (25:20):
As a result of all of this, the department has
agreed to resume the loan forgiveness discharges that were paused.
So all borrowers who are enrolled in income based repayment,
income contingent repayment, and the pay as you earn payment plans,
as well as public service loan forgiveness who have reached
the threshold for loan forgiveness will have their applications processed
(25:44):
or their accounts process their loan discharge processed. For some
folks it's twenty years, for others it's twenty five years.
Depending on the repayment plan you're in, those loan discharges
are going to pick up and take effect. Also, anyone
who makes an overpayment on your loans will receive a refund,
(26:04):
So if you have had the loans for if you've
been in repayment, let's say for thirty years, but you
only needed to repay for twenty, you will get that
ten year overpayment refunded back to you. Also, something that
was mentioned earlier, IDR or income driven re payment applications
and PSLF buy back applications have had this huge backlog.
(26:27):
They've been ordered to also process those applications as well,
which is really great news for folks who have been
waiting for a long time, and also really important. They
are recognizing the date that a barber becomes eligible for
cancellation as the effective date of discharge. And I know
that Angel is going to get into why this is
so important and what this date actually means. So this
(26:50):
is huge news, but I'm gonna hold on that for
a bit. And then they've also agreed to file some
six monthly status reports on how everything is going. So
this is a big step in holding the department accountable
and making sure that barbers are getting the relief that
they so desperately need and also deserve.
Speaker 2 (27:09):
Yeah. Absolutely, thank goodness for this lawsuit and this outcome
from the American Federation of teachers protect borrowers. We have
actually seen folks start to get their forgiveness or cancelation
through these programs. We're seeing a pickup of the backlog
in applications. It's not only been settled where it's actually
(27:32):
starting to be implemented and take impact. Recently in the
news we've seeing I've been seeing I don't know about
you all, but like a lot of headlines of the
tax bomb that's coming and the fact that you know,
after December thirty first, borrowers could have to pay taxes
on what's going on these programs, Angel, can you talk
about like the importance of the fact that recognizing the
(27:58):
date for discharge and the tax bomb issue going.
Speaker 5 (28:01):
On, Yes, definitely, So borrowers were at risk of getting
stuck with a really large tax bill due to the
end of the tax extemption provision that's set to expire
at the end of this year. That December thirty first,
twenty twenty five date, and millions of borrowers who earned
(28:21):
debt relief under IDR forgiveness and come geborary of forgiveness
after January first of twenty twenty six could see their
taxes skyrocket and essentially the win that Sabrina went ahead
and outlined ensures that barrowers who qualify for Love Forgiveness
on or before that December thirty first, twenty twenty five
(28:44):
date will have their loans to discharge tax free, even
if it's discharged after that date. So that's a huge
relief because, especially with the holidays around the corner, people
don't need to be stressing about that any I.
Speaker 2 (29:01):
Mean, you've talked about this like the tax implications could
be and that I mean ten thousand dollars or more
if people have you know, a one hundred thousand a
large amount forgiven.
Speaker 3 (29:12):
Absolutely it could be tens of thousands of dollars that
folks could see. It depends on the tax bracket that
you're in. But also what why you're charged that is
because they're viewing the amount of loans that you're having
forgiven as if you had made additional income for the year.
So they're viewing it as you didn't pay taxes on
that additional income. So if you're having one hundred thousand
(29:34):
dollars of loans forgiven, that's going to be a humongous
tax bill that you're going to get. And so that
this is key like this is huge to have this win,
but we're also not done because folks that are not
currently eligible could also still see a tax bill beginning
January first, twenty twenty six.
Speaker 2 (29:52):
I will say advocates are working hard to stop this,
to at least get a temporary extension. Student That Crisis
Center has an action out just today demanding that the
Department of Education in Congress and all the powers that
be listened to this tax bomb issue that's going on.
There is still a lot to cover. We're getting through
(30:14):
a lot of This is Natalia Abrams and you will
be right back with our SDCC takeover of the Leslie
Marshall Show.
Speaker 3 (30:30):
Welcome back to the Leslie Marshall Show, folks. This is
Sabrino at the Student Deck Crisis Center and I'm joined
by Natalia and Angel. Now, right before the break, we
were talking about some good news finally and how there
are going to be an increase in long discharges on
folks who have been waiting for a while, And we
were also talking about some dates that are important to
(30:52):
keep in mind with December thirty one, twenty twenty five,
being the end of a tax exemption provision. Now with
that there are some folks that may need to take
action about this in order to get their loans discharge.
So Natya, did you want to walk through what that
action entails, who needs to take action, and what folks
can expect.
Speaker 2 (31:13):
Sure, and definitely correct me if I'm wrong here, Sabrina, Sure,
go to expert on this. But to my knowledge with
the lawsuit, one of the good things that happened was
that if you're in the ICR Income Contingent Repayment Program
or pay as you Earn or IBr, you do not
(31:33):
need to take action all of those. If you've hit
your twenty or twenty five years before December thirty first
of this year, you are exempt or apart. You will
not be hit with that tactica. However, we have so
many borrowers in the SAY program. Now, this was the
program that President Biden started a couple years back, and
(31:56):
it has been in a lawsuit. So if you are
in the SAFE program and you have hit that timeframe,
or you are very close let's say you're a month
or two away, or you've hit the timeline, you need
to change into a different income driven repayment program. Through
you can go to studentaid dot gov and sign up
(32:16):
for any of the other income driven repayment programs and
then that will click in and that's like the number
one action that folks should take. So it's really just
Sabrina like backing up here. That's just the safe folks
that need to take action. Anyone else and the other
income driven repayment programs are safe when we're when we're
talking about the tax spot.
Speaker 3 (32:36):
Yeah, that's correct. And you know, for the folks in
safe who aren't at the twenty or twenty five year mark,
who are wondering, do I need to get out of SAVE?
Do I need to stay and save?
Speaker 2 (32:45):
What do I do?
Speaker 3 (32:46):
That is a very personal decision and it really is
up to you. We know that some folks are in
a really tight financial spot, and if it makes sense
for you to stay in the safe word variance where
you don't have to make a payment, that's absolutely fine.
But if you want to get out of SAVE because
you want to keep pursuing public service and forgiveness credits
or IDR credits, you can also do that too. So
again it is a personal decision. But if you choose
(33:08):
to stay and save, that is okay.
Speaker 2 (33:10):
Yeah, And I think who we're talking about with the
tax bomb is if you know that you have like
hit that credit count or like we said, a month away,
that's where you really want to consider it. It's so
personal though. We talked to so many people that are like,
you know what, I just can't afford anything else in
life right now with inflation and the government shuts down
(33:32):
and all the healthcare costs going up. So we understand
we're just talking about this when it comes to the tax.
Speaker 3 (33:38):
Issues, right And if someone is uncertain about how many
IDR credits they have, you can also email the Department
of Education on studentaid dot gov. There's a help center
at the top right corner. You can click on that
and then it will take you to some contact information.
They've actually been responsive to folks and been providing in
writing how many credits you have, and that will give
(33:59):
you an indication of where things are. So I do
recommend folks take advantage of that tool. All right. Well,
with that, I think it's good for us to recap
some of the things that we discussed because there was
a lot. So Natalia, do you want to recap for
us what's going on again with the one big beautiful bill?
And then Angel I'll toss it to you for some
resources that we have for folks.
Speaker 2 (34:20):
Yeah, so I'll be the bear bad news. A reminder
that there are going to be There is going to
be a major overhaul of the student loan system that's
going to impact current student loan borrowers, current students, parents,
people that are already in repayment, frankly, anyone that has
a student loan or plans to take out a student loan.
(34:43):
The majority of these changes will begin next summer July one,
of twenty twenty six. This includes lending limits how much
you can borrow or to go to college, changes to
the income driven repayment plans, changes to the standard Plan,
which we actually didn't have time to get in to,
so highly recommend attending a student Debt Crisis workshop or
(35:04):
any of the nonprofits that we work with if you
see workshops on student loan or major overhauls the student
loan program. There's also changes to the Public Service Loan
Forgiveness program that are set to take effect July first. However,
there are a lot, you know, a little bright news.
There's ongoing lawsuits. There's also through this entire year and
(35:28):
especially recently with the government shutdown there's been another reduction
force at the Department of Education. We're at like half
the staff at the Department of Education when they're trying
to do this major overhaul and do major changes to
public service loan forgiveness. So it's going to be interesting
to see how next year unfold. In my opinion, they're
(35:48):
looking to do far too much with far too little staff,
which could end up potentially benefiting student loan borrowers. A
little bit of bright news. There is a big win
due to the hard work of advocate for borrowers who
are in income DRIVENY payment programs that have hit their
twenty or twenty five year threshold of payments, they could
(36:09):
see their loans just discharged in the coming weeks or months.
And if they've hit that before December thirtieth thirty, first
excuse me of this year, they will not see a
tax bomb next year for the amount they have forgiven.
Speaker 4 (36:23):
I think that's it.
Speaker 2 (36:23):
It's very nune. Yeah, that's all Angel.
Speaker 3 (36:29):
Do I share some resources for folks.
Speaker 4 (36:31):
Yeah, definitely.
Speaker 5 (36:32):
Navigating these changes can be very overwhelming and very confusing,
but thankfully we do have a vast story of resources.
Speaker 4 (36:40):
First, one is studentad dot Gov.
Speaker 5 (36:43):
Whether you have an account or not that at student
a dot gov is your place to go for anything
pertaining to your student loans, So you go ahead and
make your account there or access all information pertaining to
your student loans on there, and you can see information
pertaining to the programs that we discussed today on their website.
Also our own website, the Student Debt Crisis Center. We
(37:03):
have our website which is studentdet Crisis dot org, and
you can find more information about us. You get right
to our team if you have any questions. And also,
most importantly, we're going to be hosting workshops next month
in which we're going to dive into the nitty gritty
of the things that we touched on today, and you
could sign up on our website again it's Studentdebt Crisis
(37:25):
dot org or on social media in the coming days
and weeks, For example, on December ninth, we're having a
general workshop where we're going over the entire general overview
of the federal student loan landscape. And then on December sixteenth,
we're going to be going into the major overhaul of
(37:47):
the student loan landscape. Some of the things we already
touched on today, but we're going into more detail with that. Additionally,
on our website you could sign up for our mailing list.
The best way to stay up to date with these
updates and this information is through our mailing list. We
go ahead and provide information on programs, policies, and opportunities
to join workshops and town halls to discuss change es
(38:09):
more in detail. And most importantly, if you are behind
on your payments, you could always reach out to our
team and we'll be happy to help.
Speaker 4 (38:16):
Thank Angel.
Speaker 2 (38:17):
Just to add in, those workshops are at four pm
Pacific seven pm Eastern. You can find that on our calendar.
I just know we have so many supporters that join
multiple times to the workshops. It's a place that you
can get your questions hopefully answered. I will say sometimes
we get inundated with hundreds, literally hundreds of questions. But
(38:40):
from what we were discussing today, it's that major overhaul workshop.
I believe you said on December sixteenth at seven pm
Eastern that will really break down a lot more. You know,
we tried to cover a ton here in I think
it's forty five minutes. We will have a little over
an hour to go over that. I think the workshops
(39:01):
are helpful, and I really think they're beneficial, and we
have to just keep breaking down this information for folks
as much as possible.
Speaker 4 (39:07):
I agree.
Speaker 3 (39:08):
I think it's important for folks to know what's coming
down the line and to start preparing because it's going
to impact all of us. And we also recognize that
there's a lot going on right economically. Folks are struggling.
We're seeing that, and there are a lot of people
behind on their payments, whether you're in default or delinquent,
(39:29):
and there are options for folks to get out of
those and we do discuss that on our workshops as well.
Speaker 2 (39:35):
Yeah, real quick, I just want to mention I know
we're closing out. There was a big headline yesterday about
another dismantling of the Department of Education. I want to
let barrow We're not going to go into it, but
I want to let borrowers know as of this time,
there was no impacts to the financial student aid or
the lending system. That's not to say we're out of
the woods yet, but if you saw that headline yet yesterday,
(39:58):
well it's you know, just making everything more confusing for
bar wars there. It's not big changes that happens.
Speaker 3 (40:07):
Right Yeah, we're definitely keeping a close eye and everything
happening right now, but you know, we're doing our best
to try and get the information out there. So I
appreciate you both for joining me today, and I want
to thank everyone for tuning into the Student Debt Crisis
Centers takeover of the Leslie Marshall Show. If you want
to learn more about our work, receive updates on student
(40:27):
debt News, or read through bar Wars stories, you can
visit our website at studentdet Crisis dot org or you
can find us on Twitter, Instagram, Facebook, and Blue sky
at at Debt Crisis Org. We're really glad to be
here with you today. Thank you all, and we'll see
you next time.
Speaker 2 (40:43):
Have a good one, thank you, Bye bye
The Leslie Marshall Show, the only true democracy and talk
radio of four and by you the people, live nationwide
and streaming live at Leslie Marshallshow dot Com.
Speaker 2 (00:19):
Good morning, good afternoon, and welcome to the Leslie Marshall Show.
I'm Natalia Abrams, President here at the Student Debt Crisis Center,
and this is our SDCC takeover of The Leslie Marshall Show.
I cannot believe we haven't been here since this summer.
I think July was the last time that we were
talking to you about student loan debt. So we're going
(00:40):
to use all of this time to catch you up
as always on everything student loans. Today I am joined
by the wonderful Sabrina Klazans, our executive director here at
Student Debt Crisis Center. Hello, Sabrina, how's it going? Dang well?
Speaker 3 (00:56):
Thanks for having me, Natalia.
Speaker 2 (00:58):
Of course, And we also have one of our newest
members to Student Debt Crisis Center, Angel Rentoria. Am I
saying that right?
Speaker 4 (01:06):
Angel?
Speaker 2 (01:06):
I always get it wrong?
Speaker 4 (01:08):
Yes, that's right, Healia. Hi.
Speaker 2 (01:10):
Angels are communications associates and we're here to discuss and
unpack everything student loan debt. So just a reminder that
at Student Debt Crisis Center. We believe that by centering
the needs and voices at Borrowers and partnering with allies,
we will impact public policy and finally, once and for all,
in the student debt crisis. If you want to learn
(01:33):
more about the work we do at SDCC, be through
Borrowers stories, get education for your own student loans. You
can visit our website at studentdet Crisis dot org, or
you can find us on all social media channels all
handles at Debt Crisis Org. That's on Facebook, Twitter, Instagram,
and Blue Sky. So with that, we have a lot
(01:56):
to cover today. We say this every time we do
a radio show, but this is really important right now
that you're going to hear us talk about how things
are changing day by day in the student debt space.
The information we are discussing today today is Wednesday, November nineteenth,
at three pm. Like who knows what could happen and
even in the next few hours. So if you're listening
(02:18):
to this in the next few days, always check on
the most recent news because as I mentioned, things are
always very fast changing in this space. So last time
we were here, the so called Big Beautiful Bill, we
did not name that had just been signed into a
lot of days before. This was the reconciliation the overall
(02:39):
budget process, so lots of changes to lots of different issues.
But again we're going to focus on student loan debt
and now we've had some time from our team to
untangle the proposed changes. How this is looking to be finalized.
It's actually spoiler alert. We're going to get into it,
but nothing is final final yet. But we'll go over
(03:01):
what we know of these changes as of now and
the major overhaul that's coming to the student loan system
beginning next year. So with that, Sabrina, would you like
to cover kind of the big talking points or big
changes when it comes to the OBBA, which is what
we'll call that so called Big Beautiful Bill.
Speaker 4 (03:23):
Yeah.
Speaker 3 (03:24):
So, once the one Big Beautiful Bill was passed in
July twenty twenty five, the changes are actually not finalized,
as you just said, Natalia, they had to go through
a process called negotiated rulemaking or NEGREG. It's essentially a
stakeholder based regulatory process that's coordinated by the Department and
all of these stakeholders. Now there are two processes that
(03:46):
we've been following along closely. The first one is called
RISE and the second one is called a HEAD and
the goal of these processes is to discuss the student
loan changes and the higher education changes that are in
that bill. Now, we've been following along with the RISE
in NEGREG because that one specifically will impact student loan changes,
(04:07):
and so we have just seen RISE wrap up its
meetings and now we're waiting for that final rule to
be released. But the things that we're looking out for
to come out of these final rules is changes to
repayment plan options. We're going to see some payment plans
go away while a new one is going to be created.
(04:29):
We're also going to see implementation of lending limits to
student loans, which is going to be a really big
deal for folks to keep in mind. But those are
just some of the few changes that we're going to
be seeing when it comes to this process. Now, the
big date, and we're going to be seeing this multiple
times today is July first, twenty twenty six. That is
going to be the beginning of implementation, and it's going
(04:52):
to continue on towards twenty twenty eight and onwards. But
July first, twenty twenty six is a really big key
date for folks to keep of mind. On today's show,
we're going to cover a lot of different topics as well,
and that's going to include a few lawsuits that we've
seen that are challenging upcoming public service loan forgiveness changes.
(05:13):
We're also going to see a lawsuit about loan discharges.
You might have seen that in the news, that folks
are going to get their loans canceled after a really
long time or forgiven excuse me. And we're also hearing
about ten million Americans who are falling into default on
their student loans. And you know, we just had a
government shutdown. Folks are struggling. We're seeing a lot of
(05:35):
layoffs happening. There are so many different pieces coming together
that are impacting student debt, and that student debt is
causing harm to people in their everyday life. It's just
been overwhelming, to say the least.
Speaker 2 (05:48):
And I mean, just to be clear, this impacts parents, parents,
people with student loan debt, people that are in school,
people that are looking to go to school, kind of
anyone that wants to access higher education. By starting July
first of next year, we'll see impacts and there's already
(06:08):
some impacts that have taken place as of today. Is
that correct, Sabrina, Yeah.
Speaker 3 (06:14):
That's correct. There's already lots of impacts that are happening.
Speaker 2 (06:19):
So, Sabrina, let's talk about the repayment plans. You know,
this is when you take out a loan, you are
given a set amount that you have to pay back
for your standard payment, which is in ten years, and
many borrowers can't afford to do that, so they enroll
in what we call income driven repayment or IDR programs. Sabrina,
(06:42):
how is that going to change for a student loan borrowers?
Speaker 3 (06:48):
So there's going to be a few different things here.
If someone as student loans or takes on or consolidates
a student loan beginning on or after first twenty twenty six,
you are going to have limited repayment options. You're going
to have a new version of the standard plan, and
you're going to have access to only one income driven
(07:10):
repayment plan called the WRAP Plan. The Wrap Plan will
be available to all borrowers except for parent plus loans,
and the new standard will be available to all new
loans on or after July first, twenty twenty six. Now,
the Wrap Plan is going to be based on a
thirty year timeline. W SOE, We're going to see an
extension of repayment taking place thirty years. It's a mortgage, yeah,
(07:37):
no zero dollar payments on wrap. It's going to be
a minimum of ten dollars with that plan. And thinking
about the new loans taken out you mentioned parents, parent
plus borrowers are not going to have access to any
income driven repayment plan, meaning your payment is going to
be based on your loan balance. If you lose your job,
(07:59):
you I won't be able to call your servicer and
say I need to lock in as your dollar payment
because I have no income. They're going to keep sending
you the bill each month, and that's going to harm
so many people out there because we're seeing the cost
of college increase and parents having to take on debt
for their children.
Speaker 2 (08:16):
Absolutely, and just to clarify, this is for parent plus
like new parent plus loans after July first of twenty
twenty six. As Sabrina said, you're going to hear that
date a lot. If you have a parent plus loan
and you're hearing us right now and you're freaking out.
If you haven't already, you can consolidate into the direct
loan program and then enroll in some of the other
(08:39):
income driven repayment programs. So if you're not looking to
borrow for your child post July first, twenty twenty six,
there is still a little bit like silver lining. What
about the other plans Sabrina, There has been like pay
as you are the Stay plan that we get, you know,
a thousand million questions about right, what are going on
(09:00):
with those plans?
Speaker 3 (09:02):
So pay the pay as you earn, the Income Contingent
Repayment and the Safe Plan are also going to go
away at some point, and that's going to be between
July first, twenty twenty six and July first, twenty twenty
eight at the latest. It's going to be within that
time frame. Now, folks will still have access to the
income based Repayment Plan and the WRAP Plan, So IDR
(09:24):
plans are not going away all all together. They are
still going to continue to exist, but barwers that are
enrolled in those plans at some point will need to
take action to switch out of those plans. Before they're
faced out. You will receive communication from the Department of Education.
We at Student Debt Crisis Center will also be communicating
these changes so that you're up to date on what's
(09:47):
going to take place. So definitely sign up for our
mailing list if you aren't on it already. But you know,
these are big changes. These are plans that people are
accustomed to, many have been in them for many years,
and people could see their payments increase depending on what
they're enrolled in.
Speaker 2 (10:04):
Yeah, it's so much. Again, we're still entangling it. We
know if you're listening, this could be confusing. If you've
heard this five times, you could still be confused or
ten times. We will be hosting a ton of student
loan workshops between now and the end of next year,
so I really encourage you. We always say it's not
a shameless plug to go to Studentdebt Crisis dot org,
(10:27):
sign up for a mailing list, take a look at
our calendar, which posts all of our upcoming workshops. We're
having a reconciliation one I believe next month that goes
far more into depth on what we're talking about. I
want to talk about loan limits, Angel, but you know,
I want to make sure that we have enough time
with the break. So just again, Sabrina, can you just
(10:49):
go over like this is impacting who.
Speaker 3 (10:53):
We're going to be right back actually, and then we'll
keep talking.
Speaker 2 (10:56):
Oh, thank you.
Speaker 3 (11:04):
Welcome back to the Leslie Marshall Show. Folks. My name
is Sabrina Callasans and I'm with the Student Debt Crisis Center.
I'm here with Natalia at Abrams and Angel Rentarea, and
we are taking over for the Leslie Marshall Show. Now,
before the break, we were talking about some of the
many changes that are taking place in the student loan system.
So we talked a little bit about the changing repayment
(11:26):
plan options. You know, we hinted at the lending limits
that are going to be taking place. So I want
to dive into the lending limits a little bit more. So, Angel,
can you walk us through what we are you know,
expecting to see beginning next year when it comes to
these lending limits.
Speaker 4 (11:43):
Yeah, of course.
Speaker 5 (11:44):
So we've already mentioned a lot throughout the show that
July one, of twenty twenty six is a date that
many of these changes might be taking place. The reason
I say night is because these might be subject to change,
so nothing is set in stone just yet. We have
to yet see how the outcome of the negotiated rulemaking
(12:07):
and the implementation of these excuse me of these of
these outline things in the bill, So let's just get
into it. Grad students, if you are looking into pursuing
grad school, so getting your masters, continuing on after getting
your bachelor's, there is a limit of twenty point five
(12:28):
K that's twenty thousand, five hundred dollars per year, with
a total of one hundred thousand dollars lifetime limit. For
professional students we're talking about those advanced degrees, dental, veterinary, medical, law,
anything along those lines, there is a limit of fifty
(12:49):
thousand dollars per year with a total of two hundred.
Speaker 4 (12:53):
Thousand dollars of a lifetime limit. Now, parent plus loanholders,
if you're looking into borrowing for your or if your
children in the future may be pursuing higher education, there
is a maximum of twenty K that's twenty thousand dollars
per dependent with a maximum of sixty five thousand dollars
(13:13):
per dependent. And I think one of the biggest changes
that we are seeing is that the federal government is
now putting aggregate loan limit for all borrowers except parents
plus borrowers that is two hundred and fifty seven thousand,
five hundred dollars. And one thing to keep in mind
is that this amount does not include and is regardless
(13:37):
of any money that you repaid back to the Department
of Education or if it gets forgiven. So even if
you repay your loans that you took out and you
met that threshold, you can no longer take out additional loans.
One thing that you can keep in mind planning into
(13:57):
the future, if you are an existing bar and you
are enrolled in a full time per RAM so if
you're in school and you take up a direct loan
by June thirtieth of next year, twenty twenty six, you
are exempt from new borrowing taps for up to three years.
And like I said, these are really big changes to
(14:19):
the system, and they don't even cover all of the
changes that.
Speaker 5 (14:22):
Are set to take place. So again, this is just
kind of the tip of the iceberg of this big issue.
Speaker 2 (14:29):
Yeah, if I could just jump in, I mean, we're
seeing certain private institutions I'm in Los Angeles, like the
University of Southern California, when you have room and board
be very close to one hundred thousand dollars per year,
so you can even get out of undergrad with these
alone limits, let alone professional programs. We talked to doctors,
(14:51):
social workers, those type of degrees that have two hundred
and fifty to five hundred thousand dollars. This is people
that have been you know, borrowed loans ten year years ago. Yep.
It's just going to make it so so many people
aren't able to complete their education.
Speaker 3 (15:07):
Yeah. I think people are either not going to be
able to complete education, folks are going to be discouraged
from even pursuing these degrees. To begin with. We're seeing
a shortage of teachers, of doctors, of lawyers across the country,
and this is really going to unmotivate people from being
able to pursue that, especially if they don't have generational
wealth or access to wealth. If folks are capped out
(15:31):
on student loans, that's one on the federal level, that's
one problem, and then there's also private student loans, which
we know the interest breaks are a lot higher, there's
no repayment plans, there's fewer protections. But also not everyone
qualifies for the private loans either, So that's a whole
other ballgame there. And so we can see skyrocketing amounts
(15:51):
of debt in the private portfolio as well.
Speaker 2 (15:54):
So this is, you know, not easy stuff to talk about.
Speaker 3 (15:59):
No, unfortunately, there are worst news for us to cover,
but I do want to preface that there's also good
news at.
Speaker 2 (16:07):
The end of all of this.
Speaker 3 (16:08):
So we will discuss the good news, but let's dive
into unfortunately the bad news for right now, and that
is actually regarding the Public Service Loan Forgiveness program. So
if folks are unfamiliar with that, Natalia, can you just
talk through what PSLF is.
Speaker 2 (16:23):
Yeah, So, Public Service Loan Forgiveness, which started in two
thousand and seven, is a great program. It's still around.
If you work in a public service job. These are teachers,
you work for a nonprofit hospital, police officer, work at
a nonprofit especially, and are in repayment for ten years.
(16:46):
After ten years, the remaining amount of your loans are forgiven.
Most people that are in Public Service Loan Forgiveness are
also in one of these income driven repayment programs. That's
why the two really work well together. The goal is
to pay as little as possible and had the most
amount forgiven. It was also for people that took on
three four hundred thousand dollars in student loan debt to
(17:08):
then go into a job that maybe paid them fifty
sixty thousand dollars a year and encouraged people to go
to school.
Speaker 3 (17:15):
But but there are some real negative changes coming to
this program unfortunately. I mean, we've worked with barrowards, we've
seen the benefits of ps left, We've seen people be
freed from that huge burden. I mean people have you know,
as little as twenty thousands to hundreds of thousands. It's
life changing. And now we're seeing, or we've seen an
(17:39):
attempt to ultimately alter this program that's going to impact
a lot of folks. So Angel, can you start us
off with what's happening with Public Service lo and forgiveness
and then after the break will continue on right.
Speaker 4 (17:52):
Of course, again hate being the bearer of bad news, but.
Speaker 2 (17:56):
Yeah, and the SI just to clarifyng this came from
an executive order earlier this year from President Trapp.
Speaker 5 (18:02):
Yes, so this was outlined by that executive order, and
right now we're seeing the intent to limit employer eligibility
for the Public Service Loan Forgiveness program. And there's a
couple of actions that if organizations or even governments take
place in will disqualify them from the program, and these
(18:25):
are the following. Again, this is verbatim from what's on
the the action, the executive action. We are not necessarily
saying this, but quote unquote, if these organizations are violating
federal immigration law, facilitating illegal immigration, violating state law, or
providing gender firming care for transgender youth, they would be
(18:48):
deemed ineligible employers. And we'll touch a bit more into
the specifics.
Speaker 4 (18:55):
Of these outlined the why and the how.
Speaker 5 (19:00):
But this is extremely alarming as it will push out
millions of borrowers from the public service loan forgiveness program
as their employers become ineligible.
Speaker 2 (19:11):
Yeah.
Speaker 3 (19:13):
So yes, as an organization, we've been tracking all of
this for trying to keep up with what's going on.
So we will definitely be diving in a little bit
deeper on what this means and what actions folks can
take to prepare for these changes to take place. But
there's also good news in the legal sector if that
we'll talk about that too, So just keep that in mind,
(19:33):
but stick with us. There's a lot more to discuss here.
This is the student debt crisis signer takeover of the
Leslie Marshall show, and we'll be right back.
Speaker 2 (19:49):
All right. Welcome back to the Leslie Marshall Show. I'm
the Talia Abrams, joined here again by Sabrina Calazans and
Angel Venturia. For the bait break, we were discussing and
just getting into the again potential changes to the public
service loan forgiveness. We are discussing the good, the bad,
(20:10):
the ugly. Trust me, there will be some good or
a little bit of bright side at points in our
radio show. But Angel, let's get back to what's going
on and where we're at with this executive order that
the Trump did earlier this year, but now we're getting
closer to it actually taking impact.
Speaker 5 (20:30):
Right, So just for quick context, the PSOLF program has
been around for nearly twenty years and is a bipartisan program,
but I implement it by Congress. And these changes essentially
are alarming since it can bar multiple organizations housed under
one employer Identification number or an ai IN. For example,
(20:51):
if one organization under a shared in is deemed it eligible,
every other organization under that A also becomes ineligible, and
this will just strip PSLF eligibility from countless public service workers.
For counting on this vital program to deliver life changing relief.
There's also an opportunity that's also very alarming, for these
(21:15):
organizations to go ahead and engage in a corrective action
plan with the Department of Education, essentially doing with the
Department of Education requests them to do in order to
regain the eligibility, otherwise they will lose.
Speaker 4 (21:31):
It for ten years.
Speaker 5 (21:32):
And this is essentially how we see it, a weaponization
of the PSLF program in order to ensure that these
public sector entities align with the political agenda of Washington, DC.
And it's just super disheartening and we'll have insane ramifications
on countless borrowers.
Speaker 2 (21:53):
Yeah, this is an attack on free speech. A reminder
that right now this isn't implemented yet. We're looking potentially
at this summer. However, here are some of the silver
lining that the American Federation of Teachers, many of the
Sanctuary cities and other nonprofitably ANYA as well, so BRINDA
(22:17):
in the National Education Association has sued to block this.
If folks you know that are dealing with the safe
plan right now, they know this lawsuit has been going
on now for a couple of years. These lawsuits can
definitely prolong the implementation of this Public Service Loan Forgiveness rules.
So if there's one takeaway right now, it's that the
public Service Loan forgiveness still exists and nobody is being
(22:40):
impacted today. So, Brinda, what recommendations do you have for
anyone who is pursuing PSLs before we move on?
Speaker 3 (22:49):
Yeah, so, I think anyone who is pursuing public service
loan forgiveness should go onto Studentaid dot gov and use
the Public Service Loan Forgiveness Help Tools ps LEFT help
tool that is where you certify your employment. You basically
put the date the dates of employment that you've been
working for a qualifying employer. You could then choose to
(23:10):
have the employer or a previous employer manually or digitally
signed off and verify that you did in fact work
for them. We recommend doing the digital signature. It's been
processed more quickly than the manual option. So going through
that help tool, you can do so now if you
haven't done it already. But we also recommend maybe you
(23:30):
know a month or very close to that July first date,
just in case, so that you can have as many
credits counted towards the one hundred and twenty credits needed
for public service loan forgiveness. So we definitely recommend that
and just you know, keep an eye out for headlines
in the news. As Natalia said, it could be that
(23:52):
that July first date is extended. It does take a
really long time. And there are actually three lawsuits against
this rule, which is really great, as you said, the
labor unions and different nonprofits and cities. There's also the
attorneys general that are suing from more than twenty states.
And then there's another lawsuit that I'm not quite familiar
with but we know is also going on. So there
(24:15):
is good news in a little bit of a silver
lining here that this government overreach is unacceptable and folks
are speaking out against it.
Speaker 2 (24:22):
Let's continue on the good news right now, since we've
delivered so much bad news at the beginning. So our
partners at the American Federation of Teachers Protect Borrowers have
sued the Department of Education and regarding in regards to
the pause on income driven Repayment APPLICATIONSSSING application processing loan
(24:44):
forgiveness discharges. If you remember from July, I know that
was a long way back. There was more than one
point five million backlogs of these income driven repayment applications
that we're not being processed Command's Department of Education with
delaying loan forgiveness discharges. This is for people that have
(25:05):
public service loan forgiveness and have completed that ten years
or their twenty or twenty five years on income driven repayment.
The Brino wanna you continue us on with the good news.
So what was the outcome of this lawsuit?
Speaker 3 (25:20):
As a result of all of this, the department has
agreed to resume the loan forgiveness discharges that were paused.
So all borrowers who are enrolled in income based repayment,
income contingent repayment, and the pay as you earn payment plans,
as well as public service loan forgiveness who have reached
the threshold for loan forgiveness will have their applications processed
(25:44):
or their accounts process their loan discharge processed. For some
folks it's twenty years, for others it's twenty five years.
Depending on the repayment plan you're in, those loan discharges
are going to pick up and take effect. Also, anyone
who makes an overpayment on your loans will receive a refund,
(26:04):
So if you have had the loans for if you've
been in repayment, let's say for thirty years, but you
only needed to repay for twenty, you will get that
ten year overpayment refunded back to you. Also, something that
was mentioned earlier, IDR or income driven re payment applications
and PSLF buy back applications have had this huge backlog.
(26:27):
They've been ordered to also process those applications as well,
which is really great news for folks who have been
waiting for a long time, and also really important. They
are recognizing the date that a barber becomes eligible for
cancellation as the effective date of discharge. And I know
that Angel is going to get into why this is
so important and what this date actually means. So this
(26:50):
is huge news, but I'm gonna hold on that for
a bit. And then they've also agreed to file some
six monthly status reports on how everything is going. So
this is a big step in holding the department accountable
and making sure that barbers are getting the relief that
they so desperately need and also deserve.
Speaker 2 (27:09):
Yeah. Absolutely, thank goodness for this lawsuit and this outcome
from the American Federation of teachers protect borrowers. We have
actually seen folks start to get their forgiveness or cancelation
through these programs. We're seeing a pickup of the backlog
in applications. It's not only been settled where it's actually
(27:32):
starting to be implemented and take impact. Recently in the
news we've seeing I've been seeing I don't know about
you all, but like a lot of headlines of the
tax bomb that's coming and the fact that you know,
after December thirty first, borrowers could have to pay taxes
on what's going on these programs, Angel, can you talk
about like the importance of the fact that recognizing the
(27:58):
date for discharge and the tax bomb issue going.
Speaker 5 (28:01):
On, Yes, definitely, So borrowers were at risk of getting
stuck with a really large tax bill due to the
end of the tax extemption provision that's set to expire
at the end of this year. That December thirty first,
twenty twenty five date, and millions of borrowers who earned
(28:21):
debt relief under IDR forgiveness and come geborary of forgiveness
after January first of twenty twenty six could see their
taxes skyrocket and essentially the win that Sabrina went ahead
and outlined ensures that barrowers who qualify for Love Forgiveness
on or before that December thirty first, twenty twenty five
(28:44):
date will have their loans to discharge tax free, even
if it's discharged after that date. So that's a huge
relief because, especially with the holidays around the corner, people
don't need to be stressing about that any I.
Speaker 2 (29:01):
Mean, you've talked about this like the tax implications could
be and that I mean ten thousand dollars or more
if people have you know, a one hundred thousand a
large amount forgiven.
Speaker 3 (29:12):
Absolutely it could be tens of thousands of dollars that
folks could see. It depends on the tax bracket that
you're in. But also what why you're charged that is
because they're viewing the amount of loans that you're having
forgiven as if you had made additional income for the year.
So they're viewing it as you didn't pay taxes on
that additional income. So if you're having one hundred thousand
(29:34):
dollars of loans forgiven, that's going to be a humongous
tax bill that you're going to get. And so that
this is key like this is huge to have this win,
but we're also not done because folks that are not
currently eligible could also still see a tax bill beginning
January first, twenty twenty six.
Speaker 2 (29:52):
I will say advocates are working hard to stop this,
to at least get a temporary extension. Student That Crisis
Center has an action out just today demanding that the
Department of Education in Congress and all the powers that
be listened to this tax bomb issue that's going on.
There is still a lot to cover. We're getting through
(30:14):
a lot of This is Natalia Abrams and you will
be right back with our SDCC takeover of the Leslie
Marshall Show.
Speaker 3 (30:30):
Welcome back to the Leslie Marshall Show, folks. This is
Sabrino at the Student Deck Crisis Center and I'm joined
by Natalia and Angel. Now, right before the break, we
were talking about some good news finally and how there
are going to be an increase in long discharges on
folks who have been waiting for a while, And we
were also talking about some dates that are important to
(30:52):
keep in mind with December thirty one, twenty twenty five,
being the end of a tax exemption provision. Now with
that there are some folks that may need to take
action about this in order to get their loans discharge.
So Natya, did you want to walk through what that
action entails, who needs to take action, and what folks
can expect.
Speaker 2 (31:13):
Sure, and definitely correct me if I'm wrong here, Sabrina, Sure,
go to expert on this. But to my knowledge with
the lawsuit, one of the good things that happened was
that if you're in the ICR Income Contingent Repayment Program
or pay as you Earn or IBr, you do not
(31:33):
need to take action all of those. If you've hit
your twenty or twenty five years before December thirty first
of this year, you are exempt or apart. You will
not be hit with that tactica. However, we have so
many borrowers in the SAY program. Now, this was the
program that President Biden started a couple years back, and
(31:56):
it has been in a lawsuit. So if you are
in the SAFE program and you have hit that timeframe,
or you are very close let's say you're a month
or two away, or you've hit the timeline, you need
to change into a different income driven repayment program. Through
you can go to studentaid dot gov and sign up
(32:16):
for any of the other income driven repayment programs and
then that will click in and that's like the number
one action that folks should take. So it's really just
Sabrina like backing up here. That's just the safe folks
that need to take action. Anyone else and the other
income driven repayment programs are safe when we're when we're
talking about the tax spot.
Speaker 3 (32:36):
Yeah, that's correct. And you know, for the folks in
safe who aren't at the twenty or twenty five year mark,
who are wondering, do I need to get out of SAVE?
Do I need to stay and save?
Speaker 2 (32:45):
What do I do?
Speaker 3 (32:46):
That is a very personal decision and it really is
up to you. We know that some folks are in
a really tight financial spot, and if it makes sense
for you to stay in the safe word variance where
you don't have to make a payment, that's absolutely fine.
But if you want to get out of SAVE because
you want to keep pursuing public service and forgiveness credits
or IDR credits, you can also do that too. So
again it is a personal decision. But if you choose
(33:08):
to stay and save, that is okay.
Speaker 2 (33:10):
Yeah, And I think who we're talking about with the
tax bomb is if you know that you have like
hit that credit count or like we said, a month away,
that's where you really want to consider it. It's so
personal though. We talked to so many people that are like,
you know what, I just can't afford anything else in
life right now with inflation and the government shuts down
(33:32):
and all the healthcare costs going up. So we understand
we're just talking about this when it comes to the tax.
Speaker 3 (33:38):
Issues, right And if someone is uncertain about how many
IDR credits they have, you can also email the Department
of Education on studentaid dot gov. There's a help center
at the top right corner. You can click on that
and then it will take you to some contact information.
They've actually been responsive to folks and been providing in
writing how many credits you have, and that will give
(33:59):
you an indication of where things are. So I do
recommend folks take advantage of that tool. All right. Well,
with that, I think it's good for us to recap
some of the things that we discussed because there was
a lot. So Natalia, do you want to recap for
us what's going on again with the one big beautiful bill?
And then Angel I'll toss it to you for some
resources that we have for folks.
Speaker 2 (34:20):
Yeah, so I'll be the bear bad news. A reminder
that there are going to be There is going to
be a major overhaul of the student loan system that's
going to impact current student loan borrowers, current students, parents,
people that are already in repayment, frankly, anyone that has
a student loan or plans to take out a student loan.
(34:43):
The majority of these changes will begin next summer July one,
of twenty twenty six. This includes lending limits how much
you can borrow or to go to college, changes to
the income driven repayment plans, changes to the standard Plan,
which we actually didn't have time to get in to,
so highly recommend attending a student Debt Crisis workshop or
(35:04):
any of the nonprofits that we work with if you
see workshops on student loan or major overhauls the student
loan program. There's also changes to the Public Service Loan
Forgiveness program that are set to take effect July first. However,
there are a lot, you know, a little bright news.
There's ongoing lawsuits. There's also through this entire year and
(35:28):
especially recently with the government shutdown there's been another reduction
force at the Department of Education. We're at like half
the staff at the Department of Education when they're trying
to do this major overhaul and do major changes to
public service loan forgiveness. So it's going to be interesting
to see how next year unfold. In my opinion, they're
(35:48):
looking to do far too much with far too little staff,
which could end up potentially benefiting student loan borrowers. A
little bit of bright news. There is a big win
due to the hard work of advocate for borrowers who
are in income DRIVENY payment programs that have hit their
twenty or twenty five year threshold of payments, they could
(36:09):
see their loans just discharged in the coming weeks or months.
And if they've hit that before December thirtieth thirty, first
excuse me of this year, they will not see a
tax bomb next year for the amount they have forgiven.
Speaker 4 (36:23):
I think that's it.
Speaker 2 (36:23):
It's very nune. Yeah, that's all Angel.
Speaker 3 (36:29):
Do I share some resources for folks.
Speaker 4 (36:31):
Yeah, definitely.
Speaker 5 (36:32):
Navigating these changes can be very overwhelming and very confusing,
but thankfully we do have a vast story of resources.
Speaker 4 (36:40):
First, one is studentad dot Gov.
Speaker 5 (36:43):
Whether you have an account or not that at student
a dot gov is your place to go for anything
pertaining to your student loans, So you go ahead and
make your account there or access all information pertaining to
your student loans on there, and you can see information
pertaining to the programs that we discussed today on their website.
Also our own website, the Student Debt Crisis Center. We
(37:03):
have our website which is studentdet Crisis dot org, and
you can find more information about us. You get right
to our team if you have any questions. And also,
most importantly, we're going to be hosting workshops next month
in which we're going to dive into the nitty gritty
of the things that we touched on today, and you
could sign up on our website again it's Studentdebt Crisis
(37:25):
dot org or on social media in the coming days
and weeks, For example, on December ninth, we're having a
general workshop where we're going over the entire general overview
of the federal student loan landscape. And then on December sixteenth,
we're going to be going into the major overhaul of
(37:47):
the student loan landscape. Some of the things we already
touched on today, but we're going into more detail with that. Additionally,
on our website you could sign up for our mailing list.
The best way to stay up to date with these
updates and this information is through our mailing list. We
go ahead and provide information on programs, policies, and opportunities
to join workshops and town halls to discuss change es
(38:09):
more in detail. And most importantly, if you are behind
on your payments, you could always reach out to our
team and we'll be happy to help.
Speaker 4 (38:16):
Thank Angel.
Speaker 2 (38:17):
Just to add in, those workshops are at four pm
Pacific seven pm Eastern. You can find that on our calendar.
I just know we have so many supporters that join
multiple times to the workshops. It's a place that you
can get your questions hopefully answered. I will say sometimes
we get inundated with hundreds, literally hundreds of questions. But
(38:40):
from what we were discussing today, it's that major overhaul workshop.
I believe you said on December sixteenth at seven pm
Eastern that will really break down a lot more. You know,
we tried to cover a ton here in I think
it's forty five minutes. We will have a little over
an hour to go over that. I think the workshops
(39:01):
are helpful, and I really think they're beneficial, and we
have to just keep breaking down this information for folks
as much as possible.
Speaker 4 (39:07):
I agree.
Speaker 3 (39:08):
I think it's important for folks to know what's coming
down the line and to start preparing because it's going
to impact all of us. And we also recognize that
there's a lot going on right economically. Folks are struggling.
We're seeing that, and there are a lot of people
behind on their payments, whether you're in default or delinquent,
(39:29):
and there are options for folks to get out of
those and we do discuss that on our workshops as well.
Speaker 2 (39:35):
Yeah, real quick, I just want to mention I know
we're closing out. There was a big headline yesterday about
another dismantling of the Department of Education. I want to
let barrow We're not going to go into it, but
I want to let borrowers know as of this time,
there was no impacts to the financial student aid or
the lending system. That's not to say we're out of
the woods yet, but if you saw that headline yet yesterday,
(39:58):
well it's you know, just making everything more confusing for
bar wars there. It's not big changes that happens.
Speaker 3 (40:07):
Right Yeah, we're definitely keeping a close eye and everything
happening right now, but you know, we're doing our best
to try and get the information out there. So I
appreciate you both for joining me today, and I want
to thank everyone for tuning into the Student Debt Crisis
Centers takeover of the Leslie Marshall Show. If you want
to learn more about our work, receive updates on student
(40:27):
debt News, or read through bar Wars stories, you can
visit our website at studentdet Crisis dot org or you
can find us on Twitter, Instagram, Facebook, and Blue sky
at at Debt Crisis Org. We're really glad to be
here with you today. Thank you all, and we'll see
you next time.
Speaker 2 (40:43):
Have a good one, thank you, Bye bye
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