If his first-term record and campaign remarks are any guide, Donald Trump’s return to the White House may signal a significant reversal of efforts to reduce student loan burden. During his previous administration, Trump advocated ending the Public Service Loan Forgiveness program and limited the amount of debt forgiveness for students who had been scammed by their colleges.
The president-elect has been pushed to do the same this time by conservative movement groups. And Trump praised the Supreme Court’s decision to overturn President Joe Biden’s initial attempt at a large student loan forgiveness scheme in 2023. “Very, very unfair to the millions and millions of people who have paid their debt through hard work,” he told a crowd in New Jersey, referring to the attempt to erase the roughly $430 billion that borrowers owe as “just a way to buy votes.”
Student Loan Forgiveness 2025
The previous few years have been difficult for student loan debtors to understand their monthly debt due to disputes over debt-relief plans, difficulties interacting with servicers, and other issues. Little is known about the president-elect’s intentions regarding the student loan program. Trump has distanced himself from Project 2025, a policy document widely regarded as a blueprint for a second Trump presidency, but if his first term and it provide any indications, his second term would probably represent a significant shift from the Biden administration’s student debt policies.
With former President Donald Trump’s reelection campaign now underway, many doubts remain regarding how policies put in place under President Joe Biden’s administration would be affected by his next term. During their campaigns, Biden and Vice President Kamala Harris emphasized reducing student loan burden. In the past four years, over 5 million borrowers have had their student loans forgiven, despite the fact that numerous initiatives are still pending in court. Trump has criticized the Biden administration’s efforts during that time, and some Republicans have referred to them as handouts.
What changes can you expect under Trump Administration
Lawsuits by states governed by Republicans have delayed plans for universal debt cancellation, and Biden’s loan forgiveness attempts have been criticized by President-elect Donald Trump and his fellow Republicans. Due to Trump’s lack of clarity on loan forgiveness, millions of borrowers are left in a deep financial situation. Trump’s triumph was aided by the economy, which was a significant election topic. However, for borrowers, worries about their financial situation go beyond inflation to encompass student loan debt.
Under a number of initiatives, the Biden administration has waived $175 billion in student loans overall. However, Trump has plenty of leeway to attempt to dismantle its key programs to further reduce the $1.7 trillion mountain of student loans that Americans owe because they have stopped either to legal challenges or are still being written by regulators.
It appears that Trump’s campaign did not provide any particular recommendations about student debt, despite his calls to abolish the Department of Education, according to an analysis of his website and platform and discussions with advocates. The plans of the incoming administration were not discussed by a campaign spokesperson.
Through five initiatives, the U.S. Department of Education has cancelled $175 billion in student loan debt since March 2021. These forgiveness schemes have helped 4.8 million debtors, according to a Centre for American Progress student loan tracker. There are also other programs being considered that might impact around 27.6 million borrowers; it is unknown what will happen to these programs.
SAVE Plan Elimination Could Impact Borrowers
SAVE, the generous debt repayment plan implemented by the Biden administration, might also be in jeopardy. Under the proposal, monthly undergraduate loan payments would be reduced from the current 10% of a borrower’s discretionary income to only 5%, hastening the process of loan forgiveness. However, Trump may decide to drop the defense of the case, given the plan is linked to another lawsuit filed by states governed by Republicans. Although it would probably be a drawn-out and difficult process, his administration may alternatively replace the program completely through a formal regulatory rulemaking.
SAVE lowered monthly payments and provided interest subsidies, may be discontinued. It can be abolished using the same procedure that was used to create it in the first place by the Biden administration without direct Congressional approval. The program might be quickly dissolved because the 8th Circuit Court of Appeals is likely to rule against it and Trump’s new administration is unlikely to disagree. When they return to repayment plans, debtors will have to make larger payments due to the repeal of the SAVE plan and the termination of the associated forbearance.
Will Trump stick to his plans to cancel student loans in large numbers?
It is not likely. Experts believe that with Trump in the White House, the idea of widespread student loan forgiveness is probably doomed, based on his tenure as president and his vocal views on the subject. By a vote of 6-3, the Supreme Court rejected Biden’s appeal for broad forgiveness.
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