Changes are coming to the student loan system as the Trump administration works to do away with the Department of Education, a move that cannot fully happen without Congress.However, the White House said on Friday that it is making the move to shift student loans to the Small Business Administration.”I’ve decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, a terrific person, will handle all of the student loan portfolio,” President Donald Trump said on Friday.As Trump tries to dismantle the Department of Education, he said he’ll shift oversight of $1.7 trillion in federal student loans to the Small Business Administration, which has also just announced it is slashing staff as part of federal workforce reduction efforts.Approximately 44 million people across the U.S. have some kind of federal student loan.On Friday, NewsCenter 5 got insight and advice from Betsy Mayotte, the founder of the Institute of Student Loan Advisors, whose life work is to help students and families navigate the system.Mayotte said her staff is now being bombarded with borrowers seeking help.”Borrowers need more help, not less,” Mayotte said. “The word ‘overwhelmed’ comes up all the time.”Mayotte said the staff layoffs at the Department of Education are the biggest hardship for borrowers for now.She said regardless of the agency overseeing federal loans, the terms of those loans are set by federal statute and will not change. Federal loans are largely administered by contracted services and vendors, and those databases won’t change either.”Nobody should be making any panicked decisions about their student loans based on a headline,” Mayotte said. “Take a deep breath, see how things play out and you will have time to make decisions because there are no deadlines out there for anything.”However, Mayotte is closely watching how Congress might change the terms for federal borrowing in the future.”You know, one of the things is reducing the federal student loan funding that’s available to families,” Mayotte said. “They could cut off parent plus loans altogether, which would mean that lower and middle-class families that need those loans to cover the gap are going to have to look at private loans.”Mayotte said it is smart to stay engaged with what is happening and not to hesitate to reach out to local representatives on Capitol Hill and let them know that loan programs that help families afford college are important.For more information on student loan advice, Mayotte recommends visiting freestudentloanadvice.org or studentaid.gov.
Changes are coming to the student loan system as the Trump administration works to do away with the Department of Education, a move that cannot fully happen without Congress.
However, the White House said on Friday that it is making the move to shift student loans to the Small Business Administration.
“I’ve decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, a terrific person, will handle all of the student loan portfolio,” President Donald Trump said on Friday.
As Trump tries to dismantle the Department of Education, he said he’ll shift oversight of $1.7 trillion in federal student loans to the Small Business Administration, which has also just announced it is slashing staff as part of federal workforce reduction efforts.
Approximately 44 million people across the U.S. have some kind of federal student loan.
On Friday, NewsCenter 5 got insight and advice from Betsy Mayotte, the founder of the Institute of Student Loan Advisors, whose life work is to help students and families navigate the system.
Mayotte said her staff is now being bombarded with borrowers seeking help.
“Borrowers need more help, not less,” Mayotte said. “The word ‘overwhelmed’ comes up [from them] all the time.”
Mayotte said the staff layoffs at the Department of Education are the biggest hardship for borrowers for now.
She said regardless of the agency overseeing federal loans, the terms of those loans are set by federal statute and will not change.
Federal loans are largely administered by contracted services and vendors, and those databases won’t change either.
“Nobody should be making any panicked decisions about their student loans based on a headline,” Mayotte said. “Take a deep breath, see how things play out and you will have time to make decisions because there are no deadlines out there for anything.”
However, Mayotte is closely watching how Congress might change the terms for federal borrowing in the future.
“You know, one of the things is reducing the federal student loan funding that’s available to families,” Mayotte said. “They could cut off parent plus loans altogether, which would mean that lower and middle-class families that need those loans to cover the gap are going to have to look at private loans.”
Mayotte said it is smart to stay engaged with what is happening and not to hesitate to reach out to local representatives on Capitol Hill and let them know that loan programs that help families afford college are important.
For more information on student loan advice, Mayotte recommends visiting freestudentloanadvice.org or studentaid.gov.