🎓 Student Loan Forgiveness Is Changing

🎯 A major shift in student loan forgiveness policy is in motion, and it could affect not just your loan payments—but your path to homeownership. The Trump administration has proposed new rules that would narrow Public Service Loan Forgiveness (PSLF) eligibility, eliminate popular repayment plans like SAVE, and introduce strict caps on how much students can borrow.

🏛️ What’s Changing Under the Trump Administration?

The latest executive actions and policy shifts are reshaping the student loan landscape. Here’s what’s happening:

• Employer eligibility crackdown: 🔗Under proposed PSLF rule changes, organizations deemed to have a “substantial illegal purpose” (including those involved in gender-affirming care, immigration violations, or terrorism-related activity) may be excluded as qualifying employers. That means fewer borrowers could receive loan forgiveness.

• Loan plan changes: The administration plans to 🔗phase out Biden-era plans like SAVE and PAYE. Going forward, borrowers would choose between a standard plan and a new extended 30-year plan with no forgiveness.

• Borrowing caps: 🔗The new legislation caps how much grad students and parents can borrow via federal loans. The goal? Reduce total debt—but it also means fewer options for covering college expenses.

• 🔗Rulemaking timeline: The Department of Education wrapped up negotiated rulemaking on July 2, and final rules are expected by mid-2026.

📌 Proponents say this will reduce taxpayer abuse and simplify repayment.

✂️ Critics say it politicizes forgiveness and unfairly shifts the burden onto borrowers who planned careers around PSLF.

💸 What It Could Mean for Your Wallet

These changes aren’t just theoretical—they could mean hundreds more in monthly student loan payments for some borrowers. If SAVE or other income-driven plans are discontinued, and you’re pushed onto a higher fixed repayment plan, here’s what happens:

• $300 higher loan payment → could lower your max home loan by $60,000–$75,000

• Fewer forgiveness options → more money out of pocket over time

• No grace period → borrowers could be transitioned into new plans without warning

And for folks in Arizona, where the average student loan debt is around $35,000, this is no small potato 🥔. It directly affects your ability to qualify for a mortgage.

🏠 Implications for Home Buyers

Lenders have to factor in your student loan payments when calculating your DTI. If those payments jump, so does your ratio—and once you exceed certain thresholds, your homebuying options narrow.

Here's what you can do now:

• Already pre-approved? Let’s recheck your ratios with potential new payment estimates.

• Still looking? Keep open communication and consider a co-borrower if things get tight.

• Future plans? Let’s build a roadmap now—before these changes hit full force in 2026.

🐼 What You Can Do Next

You don’t have to panic—but you do need to prepare. These changes will likely roll out slowly, but the smart move is to plan ahead.

✅ Review your current repayment plan and how much forgiveness you're counting on
✅ Check your employer’s PSLF eligibility under the proposed new rules
✅ Stress-test your mortgage approval numbers with a licensed lender (hi, it's me 👋)

👉 Reach out to me and let’s set a time to chat. Together, we’ll look at how student loans factor into your homebuying strategy and what you can do now to stay ahead.