As President-elect Donald Trump prepares to take office January 20, many Americans across the country are wondering what this will mean for their student loans.
President Joe Biden ushered in student loan forgiveness for millions during his presidency, but a new Trump presidency has many borrowers concerned about how their debt could change in 2025.
Why It Matters
During Biden's administration, the Department of Education approved around $180 billion in student loan debt forgiveness. This affected almost 5 million Americans, and millions of others saw lower monthly payments thanks to Biden's income-driven repayment programs.
But Trump has historically been against student loan forgiveness, and his impact on the Education Department could have wide and sweeping effects.
What To Know
During his debate with Vice President Kamala Harris in September, Trump attacked Biden and Harris for failing to deliver on their promise to cancel student loans.
Trump also called the administration's initial plan for widespread student debt cancellation a "total catastrophe" and said it would have been "unfair" to the millions of Americans who repaid their loans.
Trump's own for-profit college, Trump University, was hit with a lawsuit alleging fraud. It ended with a $25 million settlement to those who attended the now defunct school.
How Will Student Loans Change When Trump Takes Office?
Based on Trump's track record, student loan borrowers are unlikely to see any more relief under the new administration.
During his first term, his administration pushed for monthly payments to increase from 10 to 12.5 percent of borrowers' discretionary income and also sought to merge all income-driven repayment plans into one simplified option. In his second term, these moves could come up again.
Will Biden's SAVE Plan Stay in Place?
During Biden's presidency, he introduced a Saving on a Valuable Education (SAVE) plan that cut down payments for millions and even led to student loan forgiveness for some.
The income-based plan reduced many borrowers' monthly payments to zero, saved other borrowers around $1,000 per year and prevented balances from growing because of unpaid interest.
However, after being challenged in court and with Trump returning to the presidency, experts say SAVE is unlikely to survive in 2025.
Despite SAVE's likely departure, the Public Service Loan Forgiveness program will continue to be available for borrowers. The Education Department also introduced the Pay as You Earn Repayment and the Income-Contingent Repayment plans, which should continue to be available through 2027.
What People Are Saying
Kevin Thompson, the founder and CEO of 9i Capital Group, told Newsweek: "Borrowers shouldn't expect much relief under Trump. He has never been a proponent of widespread debt forgiveness, and history suggests he sees personal responsibility as the foundation of financial obligations. Trump University's $25 million settlement serves as a reminder that he doesn't part with money easily, and many believe he carries a vendetta against anything that resembles a government bailout for individuals."
Michael Lux, an attorney and founder of Student Loan Sherpa, told Newsweek: "Thus far, we haven't gotten much from the incoming Trump administration in terms of what borrowers should expect for the next four years. That said, whenever there are changes to student loan policy or a new administration, it is always a good idea to revisit your student loan repayment strategy. Are you on the best repayment plan for your circumstances? Are you making progress toward loan forgiveness or repayment in full?"
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek: "For student loan borrowers past and present, the future seems to be quite clear: Get ready to pay back the loans you have and lessen any expectations of forgiveness or relief programs being upheld by the incoming administration. We already know past attempts to implement the SAVE program the Biden administration developed have been struck down by several courts and are still making the legal rounds.
"President Trump signaled opposition to these programs on the campaign trail, so the likelihood of them suddenly gaining support seems virtually nonexistent. If you haven't been treating your student debt seriously in the hope of future forgiveness, now is the time to start tackling it by making payments," Beene said.
What Happens Next
Thompson said borrowers should prepare for the likelihood that all student loan debt will be expected to be repaid under Trump's administration.
"Unless the Biden administration pushes through last-minute executive action for additional loan forgiveness, the likelihood of widespread relief under Trump is low," he said. "His previous term rolled back consumer protections and shifted student loan policies toward a more rigid framework. The expectation will likely be that borrowers repay their loans in full, reinforcing the principle of caveat emptor—buyer beware."
Borrowers should look into refinancing and consolidation options.
"Interest rates, repayment structures and federal protections could change under a new administration, and borrowers will need to be proactive in managing their financial future," Thompson said. "If you're holding out for student loan forgiveness, it may be time to rethink your strategy. Under Trump, the focus will likely be on repayment enforcement rather than relief."
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