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Education chief is hyped to body-slam student loan borrowers



Linda McMahon is out here as the secretary of whatever shards of the Education
Department are left, and now she’s bragging about how proud she is to end a
Biden-era loan forgiveness plan.

McMahon announced Tuesday that the Trump administration is ending the Saving
on a Valuable Education (SAVE) repayment plan, which lowered payments and
interest rates and forgave loan balances after 10 years of payments for loans
of $12,000 or less. An additional one year of payment was required for every
$1,000 beyond that, with a maximum repayment term of 25 years.

This is thanks to a sham settlement between the Trump administration and
several GOP states that sued the Biden administration for creating the SAVE
plan. The settlement, such as it is, is just to kill off the plan entirely, and
the Education Department could not be more pleased.

“Thanks to the State of Missouri and other states fighting against this
egregious federal overreach, American taxpayers can now rest assured they will
no longer be forced to serve as collateral for illegal and irresponsible
student loan policies,” said Education Under Secretary Nicholas Kent.

Let’s recap.





 



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Former President Joe Biden’s tweaking of student loan forgiveness rules was
considered the most pernicious overreach of executive authority known to man,
per Chief Justice John Roberts. But President Donald Trump’s dismantling of the
Education Department is well within his power.

According to Kent, “The law is clear: if you take out a loan, you must pay it
back."

Really?

Payment Protection Program loan forgiveness was already up to $757 billion in
2023, whereas the SAVE program—if you believe McMahon’s numbers—would cost $342
billion over 10 years.

But what about if you commit massive fraud and owe the government and your
victims money? No you don’t, as long as you bribe Trump for clemency. No
repayment obligations there!

It’s mighty convenient to have this settlement come along and kill SAVE, one
of the few lingering student loan forgiveness options. Trump’s “One Big,
Beautiful Bill” eliminated everything save for a “standard plan,” where the
only relief is getting more time to repay larger balances and a “repayment
assistance plan,” which may offer some relief to low-income borrowers and
people who can’t make the payments of the standard plan.

So in theory, some of the 7 million borrowers who will be kicked off of SAVE
in the next few weeks could go on that plan. Except, whoops, it doesn’t exist
until July 1, 2026. It’s crazy how long it takes to develop a plan like this
but how swiftly the administration can move when it wants to restart
collections on student loans.

The administration is deeply committed to destroying access to higher
education for anyone who isn’t white and wealthy, and destroying SAVE is just a
part of that plan. The “One Big, Beautiful Bill” also capped graduate school
loans at $200,000, which is generally not enough to cover law or medical school.

The definition of who qualifies as seeking a “professional degree” has also
changed to now exclude nurses, preventing them from accessing higher loan
amounts that are available for professional or graduate degrees.





 



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Trump is also trying to hobble the Public Service Loan Forgiveness program by
giving McMahon the complete authority to declare that any employer isn’t
actually a public service employer, and therefore ineligible for loan
forgiveness. But that’s sort of unnecessary, since 99% of people were rejected
from loan forgiveness during Trump’s first term anyway.

But maybe none of this matters in light of the fact that the Education
Department is considering privatizing the federal government’s $1.6 trillion
student loan portfolio, which would be ridiculously chaotic for borrowers.

Student loans are the perfect playground for the Trump administration. By
making loans less attainable and less affordable, they ensure that none of the
“wrong” people get to go to school, particularly to study law and medicine.

By screwing with loan forgiveness, Trump can dole out treats to favored
groups while withholding them from others. You know who does get loan
forgiveness? Trump’s Immigration and Customs Enforcement goons, that’s who.

By treating student loans as an asset to sell, the administration essentially
gets to play with house money, a windfall at the expense of borrowers. It’s
deeply cynical, anti-democratic, and quintessential Trump.

Click here to check out this story on DailyKos.com.
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