Get ready for potential changes in the college funding arena atthe federal and state level, some good and some bad forborrowers.

While the federal government might reduce loan availability andpayback benefits for borrowers, some states and localities areproposing programs that slash the costs of college, or have alreadydone so.

What to Expect From the White House andCongress

Under the new Republican White House and Congress, there is agood possibility that the biggest student loan program, which the federalgovernment took over in 2010 under President Barack Obama, couldrevert back to private banks in whole or in part.

Sam Clovis, the national co-chairman and policy director ofDonald Trump's presidential campaign, told Inside HigherEducation, an online publication, in May that then presidentialcandidate Trump wanted the federal government to leave the studentloan business and have private lenders take on that role but nospecific proposal has been presented yet.

Trump himself, however, has proposed to modify the government’sincome-based loan repayment plan, letting borrowers pay 12.5% ofdiscretionary income over 15 years, after which the remainingbalance would be forgiven.

The most recent federal repayment program for government collegeloans, Revised Pay As You Earn (REPAYE) allows borrowersto pay 10% of their discretionary income for 20 years (25 years forgraduate students and 10 years for those working in publicservice), after which the loan balance is forgiven.

On the surface, Trump’s plan looks as if it could save borrowersmoney in the long run because the payback period would be shorter,but it could cause problems for those borrowers unable to cough upmore than 10%. Moreover, it’s not clear that Trump’s plan wouldapply to new borrowers and not just current ones since he hasrepeatedly said he wants to reduce the government’s role in studentlending.

If the federal government’s role is reduced or eliminated infavor of private lenders, it’s likely that college loan rates willincrease more than they would have otherwise, and repayment andforgiveness programs could potentially be reduced oreliminated.

Private loan rates depend on the creditworthiness of theborrower and potential co-signer, but that could create problemsfor the parents of students later on.

During his presidential campaign, Trump said he wanted to workwith Congress to require colleges to make an effort to cut costsand student debt in exchange for the federal tax breaks and taxdollars they receive.

Rep. Tom Reed, R-N.Y., a vice chairman of Trump’s transitionteam, has said he plans to introduce a bill that would requirecolleges and universities with endowments worth $1 billion or moreto devote at least 25% of their investment gains to helpingmiddle-class families pay for school, or risk losing their tax-freestatus. His proposal also requires college to maintain costsbelow the inflation rate or face cuts in federal aid as well asdisclosure of administrator salaries.Trump’scampaign website also noted the need to for students to more easilyaccess, pay for and finish their education at a two- and four-yearcollege or at a vocational training program, but no details wereincluded.

“We don’t know what to expect,” says Barmak Nassirian, directorof federal relations and policy analysis at the AmericanAssociation of State Colleges and Universities, about Trump’s plansfor college assistance.

But if the new president and Republican Congress want to spendmore on defense, cut taxes and eliminate the Affordable Care Act,which the Budget Office estimated in 2015 would cost $350 billion(its latest report on repealing the ACA focuses on the individualswho would lose insurance coverage, not the monetary cost), thenthere could be a “radical rejiggering of all mandatory programs,including student aid, student loans that will not spend more onthem, but less,” says Nassirian. That would be a far cryfrom President Obama's proposal for free tuition at two-yearcommunity colleges throughout the country, which went nowhere.

The current subsidized student loan program, which providesinterest-free loans to students while they’re in school and delaysrepayment until six months after graduation, is an “obvioustarget,” says Nassirian. So is the Pell Grant program, whichprovides up to $5,815 to needy students and doesn’t requirerepayment, according to Young Invincibles, an advocacy and researchorganization for millennials.

While the federal government could reduce or eliminate collegeloan programs and alter repayment programs, individual states andlocalities have been increasing assistance for college students orproposing to do so.

How State and Local Governments are Taking theInitiative

Tennessee and Oregon have “Promise” programs that provide twoyears worth of free tuition to any high school graduate in thestate who attends a community college, and Minnesota has a pilotproject offering free tuition for one- and two-year trainingprograms at community colleges for students whose family incomesare $90,000 or less.

Rhode Island’s governor, Gina Raimondo, recently proposed freetuition at state community colleges and two years free tuition atfour-year state colleges, and Gov. Andrew Cuomo of New York hasoffered an even broader $164 million plan in his latest budget.

Cuomo’s plan proposes free tuition at public two-year communitycolleges and four-year public state colleges oruniversities to in-state high school graduates whose family’sincome is $125,000 or less.

There are also myriad free tuition programs for communitycolleges in various cities and counties throughout the country,according to the Campaign for Free College Tuition, whichsupports Promise programs, and the Say Yes toEducation program, which works with communities and partnersacross the U.S. to provide college or other postsecondaryscholarships to public high school graduates.

Mark Kantrowitz, publisher and vice president of strategyat Cappex, a website that connects students with colleges andscholarships, expects to see an increasing number of cities andstates offering free public college tuition, beyond the four dozenor so cities and couple of states that do currently.

“This is an idea that has a lot of momentum,” says Kantrowitz.He's particularly supportive of Cuomo’s proposal because it goesbeyond the free community college concept that can have unintendedconsequence of “sending academically qualified lower incomestudents to less robust programs. Cuomo’s proposal is reallysolid.”

Why Advisors Need to Keep Up

Brian Boswell, vice president of research and developmentat savingforcollege.com, awebsite that helps individuals and professional advisors meet thechallenge of paying college costs, says more states could step upefforts to offer free tuition if the federal government cuts backon its loan and grant programs.

In either case he recommends that advisors learn about thelatest federal, state and local college savings, loan and tuitionplans and maintain that vigilance.

“When clients come in with questions about paying for theirchild’s college education, advisors need to be able to answer thosequestion in an informed way. The best thing for an advisor to do isto keep their ear to the ground on these issues. Things arechanging very fast.”