(from U.S. News & World Report)
With more than 44 million student loan borrowers in some stage of repayment, there’s a considerable amount of interest in the Trump administration’s higher education policies.
The White House announced two months ago its plan to combine the Department of Education and the Department of Labor to form the Department of Education and the Workforce. The proposed merger is in line with Trump’s campaign commitment to focus on career and technical education.
This proposal sparked interest in what may be in store for student borrowers. While there’s some uncertainty regarding what will take shape, the Student Loan Ranger is here to help you understand where things stand on the policy front.
Let’s start with policy that has already become law since President Donald Trump took office. The Tax Cuts and Jobs Act of 2017 went into effect on Jan. 1, 2018. The new law eliminated taxes on the settled portion of federal student loan debt in situations where the balance was forgiven due to a total and permanent disability, known as TPD, or death. Previously, student loan borrowers who were eligible for a TPD discharge had to pay federal taxes on forgiven loans.
While taxpayers can continue to claim the American Opportunity Tax Credit on their taxes – which allows up to $2,500 per student each year for the first four years of a college education – Congress didn’t renew the ability to deduct tuition and fees on itemized tax returns.
Sorting out the rest is challenging, since many proposals and ideas have been communicated on the campaign trail and later from the White House. The Student Loan Ranger can conclude from public records that there’s an interest in creating a single income-driven repayment option, increasing funding for career and technical education, reducing federal funding for the Department of Education’s budget and eliminating the Public Service Loan Forgiveness program.