Student loan debt becomes another casualty of the Trump affordability squeeze
By Michael Jones
They say when it rains, it pours.
The economic ground beneath millions of American households has been rocky for most of this year, as Medicaid cuts tucked into the GOP megabill put health coverage at risk, enhanced Affordable Care Act subsidies are racing toward a cliff, and the affordable housing crisis shows no signs of easing. Layered on top are higher electricity bills, crushing child care costs and grocery prices that refuse to come down—all as President Trump’s tariffs quietly push up the cost of everyday goods. An increasing number of Americans are relying on Buy Now, Pay Later apps to finance their holiday season purchases.
As if all this weren’t enough, the Trump Department of Education last week announced a proposed settlement with Missouri and other Republican-led states that would effectively end the Biden-era SAVE student loan repayment plan, which helped over 7 million borrowers by lowering monthly payments based on income and offering quicker paths to forgiveness.
Under the deal—still subject to court approval—no new borrowers will be allowed to enroll, pending applications will be denied and current enrollees will be moved into other, less generous repayment plans, likely resulting in higher payments to many and forcing them to choose new options sooner than the statutory 2028 phase-out originally planned.
Critics say this creates confusion and financial strain for borrowers who relied on SAVE, while the administration argues it is correcting an unlawful policy.
House Minority Leader Hakeem Jeffries (D-N.Y.) situated the administration’s decision within the broader affordability crisis he and his members have been banging the drum on for most of the year.
“We want to work with anyone to find the common ground to actually solve the problems that the American people want us to solve,” he told me. “And that’s lowering the high cost of living and fixing our broken health care system while cleaning up corruption at the same period of time. And the assault on all of the things that have been done, including trying to ease the debt burden that students across this country have confronted, is irresponsible. And it’s further evidence of the fact that Republicans never intended to keep their promise to lower costs on day one because they haven’t done a damn thing to make that happen.”
Rep. Alma Adams of North Carolina, the top Democrat on the House Education and Workforce panel overseeing higher ed, warned that borrowers from diverse communities would be affected most by the ending of the program.
“We need to save the SAVE program and any program that has been in place that will help students to achieve their dream of getting a good education,” she said. “And we know that some impact a lot of students who are low-income, first-generation, minority students because they need that program and that’s why it was put in.”
Meanwhile, Rep. Adelita Grijalva (D-Ariz.), another member of the Education and Workforce Committee, agreed that it would exacerbate the inequality gap.
“This administration is creating a society of the haves and the have-nots. If you have the resources, you’ll probably be able to tap into some money to go to school when maybe your family is in a more privileged position where they can afford to do it themselves,” she said. “They are creating this divide where you’re going to have the blue-collar workforce that have been pushed out of any other options but those certificated programs and those that have the means to do it.”
Former President Joe Biden entered office having campaigned on canceling up to $10,000 in federal student loan debt per borrower in a promise he said would require Congress to enact legislation. When that effort stalled on Capitol Hill, the administration pivoted to executive action, using emergency pandemic-related authorities to forgive debt for tens of millions of borrowers. In 2023, the Supreme Court struck down that plan, ruling that the Education Department lacked clear congressional authorization to cancel student debt at that scale, delivering a major setback to Biden’s signature affordability pledge.
In response, the administration shifted to what it believed to be narrower, legally durable relief through existing repayment authorities. That effort culminated in the creation of the SAVE (Saving on a Valuable Education) income-driven repayment plan, which lowered monthly payments for low- and middle-income borrowers, prevented unpaid interest from ballooning balances and shortened the path to forgiveness for some borrowers. The plan quickly became the most generous repayment option available, enrolling roughly 7 million borrowers, many of whom recalibrated their household budgets around the lower payments.
But SAVE spent much of its short life under legal siege.
Republican-led states sued to block the program, arguing it exceeded executive authority and imposed costs on states and loan servicers. Courts allowed parts of SAVE to move forward while other provisions were frozen, creating confusion for borrowers and administrators alike. That unresolved litigation backdrop ultimately set the stage for last week’s decision to effectively wind down the program and leave millions of borrowers once again in limbo, underscoring how fragile the post-pandemic student loan relief landscape has remained.
The SAVE announcement came days after the administration unveiled a $12 billion farm aid package to cushion farmers from tariff-driven fallout. Even if the White House argues the situations are legally different, the lived experience for millions of Americans is relief for one group, whiplash for another and more unworkable household math in an economy that already feels tight.
This all has been compounded by the Trump administration’s broader effort to hollow out the Education Department during the president’s second term.
Trump has revived his long-standing call to dismantle the agency, slashing staffing, freezing or reversing Biden-era initiatives and shifting core functions—including student loan oversight and civil rights enforcement—toward a narrower, compliance-only posture.
Administration officials have framed the moves as a restoration of state control and a reining in of federal overreach. Still, Democratic critics say the practical effect has been a weakened department less equipped to administer complex programs like income-driven repayment. The human cost is borne by borrowers caught in the middle as policy is unwound faster than the systems meant to support them.
Grijalva told me the administration’s education moves mirror a conservative realignment away from public school investment and toward privatized and home-based alternatives that reshape how education is funded and who it is designed to serve.
“They are creating a system of the boutique environment. They want homeschool students to get all of the benefits of public school,” she said. “They want their children to be able to get into whatever clubs and whatever sports and get honor roll, but not have to go through the K–12 system to do it in their school.”
Grijalva argued that the shift allows families to effectively curate their children’s education around religious, personal, or political beliefs, thereby limiting students’ exposure to people and ideas different from their own. She worries that over time this dynamic risks producing a more fragmented society—one in which students are less accustomed to collaboration, diversity, and civic pluralism—qualities she said have long been central to the success of America’s public school system.
“But what they’re trying to do is undermine that idea,” she said. “And so you will continue to have this little boutique environment where there are kids that have never seen a student that doesn’t look just like them. That’s a scary society to live in.”
Michael Jones is an independent Capitol Hill correspondent and contributor for COURIER. He is the author of Once Upon a Hill, a newsletter about Congressional politics.
