Louisiana Student Loans Forgiven if Dept. of Education Closes?

In a little over one month, students from Louisiana State University in Baton Rouge, the University of Louisiana in Lafayette and Monroe, McNeese State University, Southern University, Grambling University, and Tulane University will be planning for finals and graduation.

Many of those students from New Orleans, Lafayette, Alexandria, Shreveport, Monroe, and communities large and small will be graduating with a diploma and in crippling debt. Or will they?

Student loan forgiveness has been a hot topic not only in Louisiana but around the nation for the past four or so years. The Biden Administration made several attempts to reduce, restructure, and eliminate student loan debt during its time in Washington.

And while President Trump has not spoken specifically on the subject those close to "the way things work" in Washington say the President's plan to dismantle the Department of Education could have an impact on student loan repayment across the nation.

If you weren't aware the United States Department of Education's most important function is more financial than it is educational. The Department operates more like a bank than what you or I might expect from an entity that is supposed to determine educational policies and standards for the nation.

The Department of Education oversees the lending and collection of some $1.6 trillion dollars. Most of that money is in the form of outstanding debt owed by over 40 million borrowers.

The proposal to eliminate the Department has created more than a few questions about how student loans will be made in the future and how they might be collected in the past.

From what we understand the White House is shopping the portfolio of the Department of Education to other agencies but has not settled on where that "service" will eventually be located.

It has even been suggested that student loans and student loan forgiveness will remain with the Department of Education or what remains of the Department should it be eliminated by Congress. And yes, only Congress can officially shut down the department. 

That means if you owe student loans you will need to keep paying on them. If you need a student loan you will apply through the same channels that students have applied in the past, at least that's the current advice from financial planners. You can still submit the FAFSA and the Congressionally funded and authorized programs such as Pell Grants will remain in effect.