Trump and Student Loans: What Might Happen and How Borrowers Can Prepare

Former President Donald Trump, a Republican, is headed back to the White House in January.

After four years of Democratic leadership under President Joe Biden, which included a historic expansion of borrower protections and roughly $175 billion in student loan forgiveness for nearly five million borrowers, Trump is poised to overhaul the federal student loan system and rein in relief options for struggling borrowers.

“It’s completely right for borrowers to feel confused right now. It is not because they're missing something. Things are really confusing and complex and up in the air, and that's been true since we started to move back into repayment after several years of not being in repayment, and because of the political football that student debt has become,” says Jessica Thompson, senior vice president at The Institute for College Access & Success, a nonprofit that advocates for an affordable and accessible higher education system.

Whether you’re thinking about taking out student loans or you’re already in repayment, here’s what you can expect from the incoming Trump administration — and actionable steps you can take to prepare.

» MORE: What the Trump win means for your personal finances and the economy

Broad student loan forgiveness is very unlikely

President Biden’s “plan B” for broad student loan forgiveness is currently facing legal blowback from Republican-led states. The outcome is largely dependent on the courts, not the president.

However, the incoming Trump administration still has power to sway the effort in its desired direction and to drive the appeals process — and it could instruct the Education Department to give up the proposal entirely. Trump would most likely not support the forgiveness plan, echoing the Republican party’s opposition to student loan forgiveness. Republican-led states also filed lawsuits that took down Biden’s original student loan forgiveness plan of up to $20,000 per borrower in 2023, along with lawsuits currently circling the SAVE repayment plan and Biden’s forgiveness “plan B.”

Other existing federal student loan forgiveness programs may also be on the chopping block.

» MORE: Biden's student loan 'financial hardship' forgiveness proposal

SAVE and other income-driven repayment plans could disappear

Like Biden’s forgiveness plan B, the SAVE repayment plan faces lawsuits, with its future largely dependent on the courts. The Trump administration is not likely to continue defending the SAVE plan in court, Thompson says.

“I think that [the election] doesn't necessarily 100% guarantee what happens with the lawsuits, but we are certainly operating under a reality where we are likely to not see SAVE implemented in the way that it was designed by the Biden administration,” she adds.

Instead of SAVE and other existing IDR plans, Project 2025 calls for a single IDR option that would generally increase monthly payments for borrowers relative to SAVE and other current options. It would also aim to remove the loan forgiveness option (under current IDR plans, borrowers can get forgiveness after 20 or 25 years of payments).

However, a more likely scenario is that only the existing Income-Based Repayment (IBR) and Paye-as-you-Earn (PAYE) plans will remain open to borrowers, Thompson says.

IBR is safest because it was authorized by Congress, whereas the Education Department established newer income-driven repayment plans like SAVE and its predecessor REPAYE through a process called “negotiated rulemaking” — so Congress did not vote on them. Though PAYE was also created via negotiated rulemaking, its benefits and design match the Congress-approved IBR plan, Thompson explains.

Previous forgiveness might face threats

There’s a possibility that borrowers who’ve already received student loan forgiveness might have to pay it back — but it’s still unlikely, Thompson says.

“Unfortunately, I think we are in a situation where the rhetoric is so heated and the policy decision-making so unpredictable and not based on precedent, that it's hard to to be able to quell the concern,” she says.

Borrowers who received forgiveness under Biden administration efforts like the one-time IDR account adjustment are most at risk, Thompson says. Those who’ve earned forgiveness through longstanding statutory programs like PSLF are less at risk, she says.

But revoking previous student loan forgiveness would be uncharted territory, so borrowers shouldn’t be overly concerned or make financial decisions with the assumption that their loans will be reinstated at this point, Thompson says.

Public Service Loan Forgiveness is uncertain

As president and on the campaign trail, Trump has called for restricting loan forgiveness overall and making the Public Service Loan Forgiveness (PSLF) program harder to access, experts say. At one point in 2019, while Trump was still in office, the Education Department rejected 99% of PSLF applications, according to a report from the Government Accountability Office.

Project 2025 goes even further, calling for the program first introduced by Republican President George W. Bush in 2007 to shutter.

However, Trump would struggle to eliminate PSLF entirely, because Congress originally authorized it by law. Congress would have to act to remove or alter the program, which is unlikely.

The Education Department probably isn’t going anywhere

Trump has repeatedly reaffirmed his desire to shut down the Education Department, which is responsible for key student loan functions, like overseeing the Free Application for Federal Student Aid (FAFSA) and maintaining the student aid portfolio. He could reassign federal student loans to the Treasury Department, according to Project 2025.

Thompson says she “highly” doubts that Trump will succeed in dissolving the Education Department, because it would be a very large lift and would require Congress to cooperate.

“There are these core functions that millions and millions of people rely on every year and that are legally and statutorily required. And so in order to really do that, you would need a really significant commitment of political resources,” Thompson says. “I think that it's very unlikely, given the margins that we're looking at in terms of Republicans in Congress, in both the House and Senate, are quite small.”

College alternatives poised to expand

Trump has spoken in support of college alternatives, and his administration could increase investment in trade schools, community colleges, bootcamps and for-profit career-training programs. His platform says it “will support the creation of additional, drastically more affordable alternatives to a traditional four-year College degree.”

“This has been a bipartisan conversation for quite a while, I think we certainly are also seeing a fair amount of interest among the public, given the rising costs of college, given student debt and the reality of student debt, and also given the desire for people to have different pathways available based on their interests and where they want their futures to go,” Thompson says.

Expect more conversation about allowing students to use the need-based Pell Grant to pay for short-term career training programs, Thompson says. This federal grant gives students from low-income backgrounds up to $7,395 per year.

Borrower protections could decrease

Trump’s record indicates that he may be opposed to strengthening borrower defense to repayment, a longstanding program introduced in 1995 to discharge debt for borrowers who have been defrauded by their schools. For example, in 2020, then-President Trump vetoed a bipartisan resolution that would have overturned a 2019 borrower defense rule that made it tougher for students who say they were defrauded by colleges to get federal student loan discharge.

Project 2025 calls for Congress to end the Education Department’s broad ability to forgive loans through the borrower defense program. Instead, it says, the Department should only be allowed to discharge loans in limited situations in which “convincing evidence exists to demonstrate that an educational institution engaged in fraud toward a borrower in connection with his or her enrollment in the institution and the student’s educational program or activity at the institution.”

How student loan borrowers can prepare for the Trump presidency

Student loan borrowers don’t yet have a clear roadmap of how the next four years will play out. However, there are still limited steps you can take to prepare for changes to the student loan system:

Change your student loan repayment plan

The SAVE plan isn’t likely to stick around after Trump takes office. If you need lower payments based on your income, or you want to work toward loan forgiveness, IBR or PAYE are the safest options, Thompson says.

IBR is open to new applicants now. PAYE is currently closed to new enrollment, but the Education Department intends to reopen it in mid-December, along with the Income-Contingent Repayment (ICR) plan.

» MORE: How to apply for an income-driven repayment plan

Keep detailed repayment records

Keep records of any payments and conversations with your servicer, Thompson says. If any issues arise down the road, you can refer to these records and use them to file a student loan complaint.

Pay attention to loan forgiveness news

At this point, you shouldn’t yet worry about forgiveness you have already received or make financial decisions with the assumption that it will be taken back, Thompson says.

However, keep an eye on the news and any official announcements from the Trump administration. The situation could change.

Submit the FAFSA ASAP

The Education Department opened the 2025-26 FAFSA to all students on Nov. 18. If you’ll be in college next year, submit the form as soon as possible to avoid any potential processing delays that could happen as a result of the changing administrations.

“We are looking at a precarious transition between two very, very different administrations,” Thompson says.

Be critical of for-profit education programs

While the Trump administration may work to make college alternatives more accessible, do your research about potential programs before committing to them. Some programs, particularly those offered by for-profit institutions, can be predatory.

“When a program is eligible [for federal student aid], it’s a powerful signal to somebody that that should be a valid and worthwhile thing that will pay off for them, but unfortunately we have seen in the past that that is not always the case, which then leads to a lot of the student debt outcomes that, frankly, undermine the trust in higher education for people,” Thompson says.

The Education Department’s College Scorecard tool is one way to evaluate the financial outcomes of various institutions and post-secondary pathways.

Contact your local representative

If you’re concerned about proposed changes to your federal student loan repayment options, consider reaching out to your U.S. senators or house representative. Elected officials often take their constituents’ opinions into account when making policy decisions.

Find out how to contact your elected officials at USA.gov.