If re-elected, Trump could cut student loan forgiveness and end SAVE program

Donald Trump has long viewed the Biden administration’s student loan forgiveness measures as a publicity stunt for the election. Yet if reelected, Trump is prepared to do more than simply roll back the measures.

At a campaign event in late June, Trump called Biden-era student debt relief measures “vile,” suggesting that student loan borrowers should not count on debt forgiveness under a second Trump administration. He also repeatedly praised the Supreme Court’s June 2023 decision to strike down Biden’s “unfair” effort to cancel up to $400 billion in student loans, which would have forgiven up to $20,000 for Pell Grant recipients and up to $10,000 for borrowers earning less than $125,000 a year.

While he doesn't have a formal policy plan for a second term, Trump pledges on his campaign website to “shut down the Department of Education in Washington, D.C. and send all education work and needs back to the United States.”

The move falls directly within the 2025 Project, a road map for the next presidency created by conservative activists to “bring rapid relief to Americans suffering from the left’s devastating policies.”

In particular, Project 2025, from which Trump has publicly distanced himself in recent remarks, saying that “some of the things they’re saying are absolutely ridiculous and appalling,” while continuing to echo their policy suggestions, targets some Title IX protections and seeks to roll back some equity-focused policies based on preventing discrimination based on race and gender identity.

Eliminating the Department of Education and its “woke-dominated public school system” is at the top of Project 2025’s priority list for the first 180 days of the next conservative administration, i.e. Trump, if elected.

“This kind of deconstruction of the US Department of Education would create some chaos,” Jan Miller, a student loan consultant with more than 25 years of experience in the financial industry, told Business Insider.

Defunding of the Ministry of Education

The Department of Education administers the Federal Pell Grant system for low-income students and the Federal Work-Study Program. It also facilitates the servicing of federal education grants and loans and their repayment and forgiveness programs.

While it would take Republican control of the House and Senate for Trump to completely shut down the Department of Education, it would mean access to education funding and resources would be limited based on the state a student resides in, student financial aid expert Mark Kantrowitz told BI.

Even if Trump fails to close the Education Department, he could still restrict its resources and slow hiring, leading to delays in processing applications for loans and grants. He could also cut programs like the federal work-study program, which provides part-time jobs to students who demonstrate financial need to help them pay for college.

“It would clearly be chaos if they actually did it, and it wouldn't necessarily save the government money unless they cut things wholesale,” Kantrowitz said.

A recent Supreme Court decision that struck down the Chevron Doctrine has already weakened the Department of Education. The decision ended 40 years of precedent that required courts to conform to agency interpretations of ambiguous laws.

Betsy Mayotte, president and founder of the Institute of Student Loan Advisors, told BI that the move could mean the Department of Education would become involved in legal challenges to its regulatory language, forcing it to devote more resources to those battles.

“Depending on who gets elected or re-elected in the next election, the whole Chevron thing could add more complexity to the outcomes we see both for people who are currently in school, for people who are about to go to school, and for people who already have student loans,” Mayotte said.

What a second Trump term could mean for students

Under Trump’s previous administration, requests for public service loan forgiveness from the Department of Education piled up and he worked to weaken loan forgiveness protections for students who had been defrauded by colleges, BI reported. The former president also proposed massive cuts to the Department of Education budget and supported plans to cap the amount of loans parents can take out to finance their child’s education.

Biden-era student loan forgiveness measures, along with his new income-based SAVE repayment plan, are making their way through legal challenges led by conservative groups, which likely won’t be resolved until 2025. If Trump wins in November, he could end the legal battles, effectively ending students’ chances of getting debt forgiveness and reduced payment amounts by sidelining Biden’s efforts, BI previously reported.

“Overall, I think a Biden administration will be more supportive of college affordability than a Trump administration,” Kantrowitz said. “You just have to look at what happened during the Trump presidency, and you can expect a lot of that to happen again, and maybe even new things.”

Representatives for the Trump campaign did not respond to a request for comment from Business Insider.

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