Trump student loans became a widely searched topic during Donald Trump’s presidency, as millions of Americans tried to understand how his policies affected the student loan system. With higher education becoming more expensive and student debt reaching record levels, any changes from the federal government can impact borrowers in huge ways.
From repayment plans to loan forgiveness and temporary suspensions, Trump’s time in office brought several adjustments to the way student loans were handled. Many are still trying to understand the full picture, what happened under his administration, what policies were proposed, and what might happen has he returns to office. This article takes a closer look at all of it.
Student Loan Outlook Before Trump Took Office
Before Donald Trump assumed the presidency in January 2017, the student loan system was already under pressure. Federal student loan debt had topped $1.3 trillion, with more than 40 million Americans carrying some form of educational debt.
The Obama administration had introduced income-driven repayment plans, expanded access to student loans through federal programs, and supported the Public Service Loan Forgiveness (PSLF) program. These policies were designed to help low-income borrowers, public service workers, and students from disadvantaged backgrounds manage their debt.
By the time Trump was sworn in, the student loan system was already a topic of national debate. Rising default rates, mounting balances, and questionable for-profit colleges had led to increased calls for reform. Borrowers were hoping for relief and clearer repayment options.
Trump’s Approach to Student Loans During His Presidency
Donald Trump’s presidency introduced a different approach to education and student loans. Unlike his predecessor, Trump focused on reducing the size of government, cutting federal spending, and pushing for more private sector involvement.
This included proposing significant changes to how federal student loans were managed. One of the most notable shifts came through his annual budget proposals. Trump called for the elimination of the Public Service Loan Forgiveness program, arguing that it unfairly benefited a small group of borrowers while costing taxpayers billions.
He also proposed replacing the multiple income-driven repayment plans with a single plan that capped monthly payments at 12.5% of a borrower’s discretionary income, with forgiveness after 15 years for undergraduates and 30 years for graduate students.
These proposals never passed into law, as Congress did not approve them. However, they clearly showed the administration’s priorities: simplifying the system, reducing federal spending, and limiting forgiveness.
PEOPLE ALSO READ
What Is the Difference Between Secured and Unsecured Loans?
How Does Inflation Affect Loan Interest Rates?
Can You Use a Loan to Pay Off Other Debts?
How to Manage Loan Repayment During Financial Hardship
Borrower Defense and For-Profit Colleges
Another major area that drew attention under Trump student loans policy was the handling of borrower defense to repayment claims. Borrower defense allows students to have their loans forgiven if their schools defrauded them or violated certain laws.
This policy gained importance after several large for-profit college chains, such as Corinthian Colleges and ITT Tech, shut down and left students with huge debts and worthless degrees. The Obama administration had worked to expand and simplify the borrower defense process, but the Trump administration rolled back many of those efforts.
Led by then-Education Secretary Betsy DeVos, the Department of Education tightened the rules, made it harder for students to prove their cases, and delayed processing tens of thousands of applications. Critics accused the administration of siding with for-profit schools instead of protecting students, while supporters argued it prevented abuse of the system and saved taxpayers money.
Under Trump, a new formula was introduced to determine how much relief a borrower could get, based on their projected income. In many cases, this led to partial forgiveness instead of full cancellation, leaving many former students dissatisfied.
Temporary Relief During the COVID-19 Pandemic
One of the most impactful moves during the Trump administration regarding student loans came unexpectedly, during the COVID-19 pandemic. In March 2020, the CARES Act was signed into law, pausing federal student loan payments, setting interest rates to zero, and stopping collections on defaulted loans.
This initial relief was set to last six months, but Trump extended it multiple times through executive actions. This freeze helped millions of borrowers stay afloat during an uncertain time. While the pause was originally a bipartisan effort, Trump’s decision to continue the suspension beyond the CARES Act showed some flexibility in dealing with an economic crisis.
The payment pause remained in effect throughout the end of his presidency and was later extended by President Biden until 2023. Even though the suspension was temporary, it marked one of the most significant federal student loan relief efforts in U.S. history.
Trump’s Proposed Elimination of Subsidized Loans
Another key point in the Trump student loans policy outline was the proposed elimination of subsidized student loans. These are loans given to students with financial need, where the government pays the interest while the student is in school, during the grace period, and if they qualify for deferment.
Trump’s budget plans repeatedly included the idea of removing subsidized loans, arguing that the government shouldn’t be picking winners and losers, and that all students should face the same terms regardless of financial status.
Critics argued this would make college more expensive for low-income students and increase the total amount of debt after graduation. Although the proposal was never enacted, it reflected the broader philosophy of reducing government involvement in student aid.
Changes to Loan Servicing and Oversight
Under Trump, the Department of Education made changes to how student loans were managed behind the scenes. The administration aimed to overhaul the federal student loan servicing system, which handles billing, customer service, and repayment.
The goal was to modernize the system and make it more efficient, but there were concerns about lack of transparency and borrower protections. The Trump administration also scrapped Obama-era rules that were designed to hold colleges accountable for the outcomes of their students.
The “gainful employment” rule, which penalized schools whose graduates failed to earn enough to repay their loans, was eliminated. This move was criticized by consumer advocates who said it allowed low-performing schools to continue operating with little oversight.
Trump’s Views on Student Loan Forgiveness
Donald Trump has been largely skeptical of large-scale student loan forgiveness. Throughout his presidency, he opposed mass cancellation of student debt, a policy that some progressive lawmakers and advocacy groups have supported.
Trump viewed blanket forgiveness as unfair to taxpayers and to people who had already paid off their loans. Instead, he advocated for a simplified repayment system, where forgiveness could still occur after consistent monthly payments over time, but not through broad cancellation.
His stance is rooted in personal responsibility and limiting government spending. This philosophy influenced most of the education proposals coming out of his administration, and it continues to shape his position as he eyes another run for the presidency.
READ MORE
Student Loan Debt: Everything You Need to Know
All About Student Loan Forgiveness
Everything to Know About Student Loans Debt Collection
How Trump’s Policies Compare to Biden’s Student Loan Approach
Since Joe Biden took office, the contrast between Trump student loans and Biden’s student loan policies has been striking. Biden has prioritized student debt relief, including canceling billions in debt for targeted groups such as public servants, borrowers with disabilities, and those defrauded by schools.
He also supported a broader loan forgiveness plan, although it was struck down by the Supreme Court in 2023. Under Biden, the borrower defense program was restored and expanded, and income-driven repayment plans were made more generous.
This includes the new SAVE plan, which allows for lower monthly payments and quicker forgiveness for some borrowers. This comparison highlights two very different views on student loans. Trump focused on limiting government aid and restructuring repayment systems, while Biden has leaned heavily into debt relief and expanding federal support.
Conclusion
Trump student loans policies were shaped by a desire to cut federal spending, streamline repayment, and shift responsibility to individual borrowers. His administration proposed major changes to loan forgiveness programs, eliminated oversight rules meant to protect students, and tightened standards for borrower defense.
At the same time, Trump extended meaningful relief during the pandemic through payment pauses and interest freezes. Trump’s student loan legacy remains an important topic for borrowers, students, and families across the country.