Project 2025 and student loans

I’m not always consistent about whether I consider student loans part of consumer law. Government student loans are, as the name implies, a government program, rather than a consumer program. But sometimes I think of them as part of consumer law, perhaps because we also have private student loans or because the loans are used to buy a consumer product–education. Hey, I contain multitudes. So today I want to blog about how student loans fare under Project 2025. We had previously blogged about Project 2025 and the CFPB.

Project 2025 contains quite a bit on student loans. The authors seem quite exorcised about how the current administration is treating them. In the interests of brevity, I will include only two excerpts from the report. Here’s the first:

Phase Out Existing Income-Driven Repayment Plans

While income-driven repayment (IDR) of student loans is a superior approach relative to fixed payment plans, the number of IDR plans has proliferated beyond reason. And recent IDR plans are so generous that they require no or only token repayment from many students.

The Secretary should phase out all existing IDR plans by making new loans (including consolidation loans) ineligible and should implement a new IDR plan. The new plan should have an income exemption equal to the poverty line and require payments of 10 percent of income above the exemption. If new legislation is possible, there should be no loan forgiveness, but if not, existing law would require forgiving any remaining balance after 25 years.

Here’s what Politico’s Weekly Education Report says about Project 2025’s proposal:

Most of those enrolled in the SAVE plan would see their monthly payments go up under the proposed Project 2025 IDR plan, according to the Center for American Progress, a left-leaning think tank.

Those who attended college but did not earn a degree or credential would see their monthly payments almost quadruple, while borrowers with associate degrees would see their payments more than triple, the analysis said.

Typical borrowers of all education levels would shell out at least $2,700 — and as high as $4,000 — more per year in student loan payments on the proposed Project 2025 IDR plan relative to the SAVE plan, according to the analysis.

Another part of Project 2025 proposes to:

End time-based and occupation-based student loan forgiveness. A low estimate suggests ending current student loan forgiveness schemes would save taxpayers $370 billion.

I interpret that as a call to eliminate the Public Service Loan Forgiveness program.

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