How Trump’s Policies Affected Student Loan Forgiveness Programs

The student loan crisis in the United States has been a hot-button issue for years, with millions of Americans burdened by debt that often feels impossible to escape. During Donald Trump’s presidency (2017–2021), his administration made several policy changes that significantly impacted student loan forgiveness programs. While some of these changes were framed as efforts to streamline the system, others were criticized for making it harder for borrowers to access relief.

The State of Student Loan Forgiveness Before Trump

Before diving into Trump’s policies, it’s essential to understand the landscape of student loan forgiveness programs prior to his presidency. The most well-known program, Public Service Loan Forgiveness (PSLF), was established in 2007 to encourage graduates to pursue careers in public service by forgiving their remaining federal student loans after 10 years of qualifying payments.

Other programs, such as Income-Driven Repayment (IDR) forgiveness, allowed borrowers to have their loans forgiven after 20–25 years of payments based on their income. However, these programs were notoriously difficult to navigate, with many borrowers facing bureaucratic hurdles and denials due to confusing eligibility requirements.

Trump’s Approach to Student Loan Forgiveness

The Trump administration took a largely skeptical stance toward broad student loan forgiveness, arguing that it would be unfair to taxpayers and could encourage reckless borrowing. Instead, his policies focused on tightening eligibility and reducing the scope of existing forgiveness programs.

1. Rolling Back Borrower Protections

One of the most significant changes under Trump was the dismantling of Obama-era protections for student loan borrowers. The Department of Education, led by Betsy DeVos, rescinded policies that had made it easier for defrauded students to have their loans discharged.

• Borrower Defense to Repayment: This rule allowed students who were misled by for-profit colleges to seek loan forgiveness. The Trump administration rewrote the rule, making it much harder for borrowers to qualify.
• Gainful Employment Regulations: These rules penalized career programs that left graduates with unaffordable debt. The Trump administration repealed them, arguing they were overly burdensome on schools.

2. Changes to Public Service Loan Forgiveness (PSLF)

PSLF was already a problematic program before Trump, with a 99% rejection rate due to confusing paperwork and servicing errors. Instead of fixing these issues, the Trump administration made it even harder for borrowers to qualify.

• Denial of Waivers: The administration rejected proposals to expand eligibility for PSLF, leaving many public servants—such as teachers, nurses, and nonprofit workers—without relief.
• Servicing Issues: Loan servicers like FedLoan were accused of mismanaging PSLF applications, leading to widespread denials. The Trump administration did little to hold these companies accountable.

3. Limiting Income-Driven Repayment (IDR) Forgiveness

IDR plans were designed to help low-income borrowers by capping monthly payments at a percentage of their income. However, the Trump administration introduced policies that made it harder for borrowers to reach forgiveness.

• Taxing Forgiven Loans: Under Trump, the Department of Education proposed taxing forgiven IDR balances as income, which would have created a massive financial burden for borrowers.
• Delayed Forgiveness Processing: Many borrowers reported that their IDR forgiveness was delayed or denied due to administrative roadblocks.

The Political and Social Impact

Trump’s policies didn’t just affect individual borrowers—they fueled a larger debate about the role of government in education debt.

The Rise of the Student Debt Strike Movement

As forgiveness became harder to obtain, activist groups like the Debt Collective organized strikes, urging borrowers to stop paying their loans in protest. This movement gained traction, especially among millennials and Gen Z borrowers who felt betrayed by the system.

The 2020 Election and the Push for Change

Trump’s handling of student loans became a major campaign issue in 2020. Progressive Democrats like Bernie Sanders and Elizabeth Warren pushed for universal student debt cancellation, while Biden promised reforms to existing forgiveness programs.

What Happened After Trump?

When Biden took office in 2021, his administration began reversing many of Trump’s policies. Key changes included:
- Expanding PSLF waivers to help more borrowers qualify.
- Pausing federal student loan payments during the COVID-19 pandemic.
- Proposing widespread debt cancellation, though this was later struck down by the Supreme Court.

While Trump’s policies made student loan forgiveness more difficult, they also sparked a national conversation about the need for systemic reform. Today, the debate continues as millions of borrowers wait for real relief.