Texas Student Loans Forgiven if Department of Education is Shut Down?

It won't be too much longer until the wildflowers of Texas will start to bloom and that means a couple of things. The temperatures will rise, the pollen counts will rise, and hundreds of students across Texas will graduate college. Many of them will be bringing a diploma and crippling debt along with them as they transition into the working world.

Students from the University of Texas at Austin, Texas A&M in College Station, Texas Tech in Lubbock, Baylor in Waco, and countless other colleges and universities will not only have to find a job that can pay their bills but a job that can pay for their education too.

Or will they? Especially if the department that oversees student loans is eliminated.

Student loan forgiveness has been a hot topic not only in Texas 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 from 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.