Trump’s student loan changes leave borrowers facing soaring repayments
Many of the nearly 43 million Americans who have federal student loan debt are seeing their carefully budgeted monthly payments soar amid Donald Trump’s overhaul of education in the United States.
In the last few weeks, the Trump administration closed applications for all income-driven repayment plans (even ones not blocked by courts) and limited those eligible for public service loan forgiveness (PSLF). That program forgives the loans of government and select nonprofit workers after completing 10 years of service and making 10 years of minimum payments.
“The student loan system was broken when President Biden was responsible for it. All we’ve seen since President Trump has come in as an effort to provide fewer rights and fewer resources for working people that have student debt, making the cost of living go up,” said Mike Pierce, executive director of the Student Borrower Protection Center.
“Things are worse now than they’ve ever been, and nothing is on the table that will make life better for people with student loans.”
Jordan, a public high-school English teacher in Redding, California, and his wife, who also works in public education, have student loans totaling $200,000. The couple, who recently welcomed a second child, just bought a house to accommodate their growing family. An even higher student loan payment each month wasn’t a consideration when they took out a mortgage, he said.
“We’re going from making $600 in payments – that’s what Save (saving on a valuable education) is supposed to do, which we can absorb to an extent. But if we go off of income-based payments, I don’t know what’s going to happen,” Jordan, 37, said.
“Today I tried to calculate what’s going to happen, and the calculators don’t work on the webpage. I couldn’t even tell you real numbers if I wanted.”
With a new mortgage and childcare exceeding $15,000 on a teacher’s salary, Jordan and his family are stretched thin.
He said: “It’s been alarming, but I’ve tried to enter into zen mode. I’ll just move my money and I guess wait until they figure out how to garnish my wages, if I even have money. I don’t know. What am I supposed to do?”
Aaron, a pharmacist in Ohio, started looking for a second job when Trump got elected in preparation for higher monthly payments.
“I’m nervous about it. I basically knew on election night what was going to happen to the Save Plan. It was going to go away. I did a second pharmacist job filling in some [pro re nata] hours,” Aaron, 47, said. “I’m still looking for additional hours to try to pick up.”
Aaron took out around $180,000 in loans to cover pharmacy school tuition and living expenses for him and his family. With the Save plan and PSLF, he expected to pay $700 a month and have his loan forgiven after 10 years since he works for the state. Without an income driven repayment plan as an option, he fears a possible monthly payment of $1,800 for the next 30 years on a standard extended repayment plan with no chance of forgiveness.
“The more that you go to school, have an advanced degree, you earn more over your lifetime. You pay more in taxes. Not just income taxes, but property taxes, sales taxes, everything else. So it’s actually a pretty good deal to invest in somebody to go to school,” he said. “I don’t see [loan forgiveness] as a handout, which is what people try to say ‘well, you know, I didn’t go to school, so I shouldn’t pay for anything.’ Yeah, but if I told you about all the stuff that I shouldn’t be paying for, you could play that game all day.”
Reina Chilton-Mayer is a homemaker and caregiver for her disabled teenage son. Despite her husband having a master’s degree and stable income for many years, the unstable rental market alongside the cost of caretaking has left them with few choices, she said. She and her husband’s combined $140,000 worth of student loans has left them so burdened that they are considering defaulting on their debt for the first time.
“I hate defaulting on something. It could have career impacts for my husband,” Chilton-Mayer, 44, said. “If you wanted to change jobs, of course there are going to be financial background checks. So we’re not 100% on whether or not we’re going to do that, but at the end of the day, it just comes down to making ends meet every month.”
Ebrahim Ghazali, the chief of pediatrics at a clinic in Springfield, Massachusetts, has just one year left of payments until the rest of his loans would be forgiven under PSLF. The recent changes to federal student loans have paused his payments and left him unsure about the future of his debt.
“With these giant student loans, my payments were initially close to $2,000 a month. When I got on the Save plan, it brought it down to between $600 and $700 a month, which I can budget a lot better,” Ghazali, 41, said.
But now, with the application websites down, he said he is “unable to progress towards forgiveness and with the application site down. I can’t restart them on a different repayment plan. I’m not even sure if my current employment is going to count towards repayment at this point.”
As the potential shuttering of the department of education looms, Pierce noted that “the worst things that could happen are already happening right now, and we don’t need to wait for the education department to shuffle the deck chairs around on the Titanic”.
“Borrowers have a right to make payments based on their income,” he said. “They have a right to have their debt canceled that they work in public service, and those rights have been shut down by President Trump.”
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