Trump Administration Threatens Key Student Loan Relief Programs

WASHINGTON, D.C. — With President Donald Trump back in the White House and Republicans controlling Congress, experts warn that several key student loan relief programs, including the Biden administration’s SAVE repayment plan, could face elimination or significant cuts.

The SAVE plan, launched in 2023, was hailed by the Biden administration as “the most affordable student loan plan ever,” reducing monthly payments for many borrowers by half and shortening the timeline for loan forgiveness. However, it has been embroiled in legal challenges led by Republican attorneys general in Kansas and Missouri, who argue it circumvents the Supreme Court‘s 2023 decision blocking broad student debt forgiveness. The plan is currently on hold, and experts doubt it will survive a second Trump term.

Mark Kantrowitz, a higher education expert, outlined potential methods the Trump administration could use to dismantle SAVE, including abandoning its defense in court, issuing new regulations to revoke the plan, or passing legislation to eliminate it. “There are several methods the Trump administration could use to kill the SAVE repayment plan,” Kantrowitz said. “They could abandon the defense of the repayment plan in the pending lawsuits.”

Another at-risk program is the Biden administration’s updated bankruptcy guidance, which made it easier for borrowers to discharge student loans in bankruptcy. Kantrowitz predicts a “scorched earth approach” under Trump, potentially reversing these changes. Malissa Giles, a consumer bankruptcy attorney in Virginia, expressed concern over shifting political pressures but remains hopeful the guidance will stay intact.

House Budget Committee Republicans are also targeting Public Service Loan Forgiveness (PSLF), a program created in 2007 to forgive student debt for public service workers after 10 years of qualifying employment. A leaked policy memo suggests limiting eligibility for PSLF, though specifics remain unclear. The memo also proposes repealing Biden-era regulations that expanded relief for borrowers defrauded by their schools and eliminating interest subsidies for in-school borrowers.

More than 40 million Americans carry federal student loans, with outstanding debt exceeding $1.6 trillion. Advocates fear these changes could force borrowers into less flexible private loans and prolong repayment periods. “These proposals may force families to rely more on private student loans, which tend to have less flexibility and fewer repayment options,” said one advocate.

The White House did not immediately respond to a request for comment.