Analysis Warns Student Debt Crisis 'Would Likely Worsen' If Trump Elected

From attacks on abortion rights to the fossil fuel-driven climate emergency, many problems concerning Americans are expected to worsen if former U.S. President Donald Trump is elected in November—and the list included the student debt crisis, according to an analysis published Wednesday.

Algernon Austin, the director for race and economic justice at the Center for Economic and Policy Research, and CEPR domestic program intern Alex Richwine determined that the student debt crisis "would likely worsen" if the Republican returns to the White House after examining the Trump and Biden administrations' track records and a conservative coalition's sweeping policy document.

"Collectively, students owed $1.6 trillion in federal student loans at the end of 2023. However, that total is slightly lower than it was two years prior, thanks to some proactive actions from the Biden administration," the CEPR report begins. "The administration has pursued a variety of policies and initiatives to forgive student debt and ease the process of repayment. These policies have halted a decadeslong increase in outstanding student debt, but that increase would likely return under a second Trump administration."

President Joe Biden notably tried to enact a much broader student debt cancellation policy—which would have wiped out up to $20,000 per borrower—but that plan was struck down last summer by the right-wing U.S. Supreme Court, which includes three Trump appointees. The Democrat last month announced a new plan to provide relief to millions.

"Early indications and past experience tell us a second Trump administration would allow this crisis to worsen."

Despite recent relief efforts, "the crisis of student debt is restraining many hardworking Americans from economic prosperity," Austin said in a statement. "Early indications and past experience tell us a second Trump administration would allow this crisis to worsen."

Citing various examples, the report states that "the Trump administration demonstrated no interest in easing the burden on student borrowers, and, in fact, supported some policies that harmed student borrowers."

"Former Secretary of Education Betsy DeVos made it more difficult for borrowers to pursue forgiveness through the borrower defense to repayment program. In May 2020, Trump vetoed a bipartisan bill to undo that move by DeVos," notes the analysis. "DeVos was also sued by student borrowers in 2020 for illegally garnishing the wages of borrowers despite a pandemic pause on the practice."

Going forward, Trump also may be influenced by the Heritage Foundation-led 2025 Presidential Transition Project and its Mandate for Leadership: The Conservative Promise. While the think tank has for decades periodically released its policy wishlist for the next Republican president, this cycle it's going much further, partnering with politically aligned groups for the more ambitious project.

In addition to crafting detailed policy recommendations, Project 2025 is seeking "properly vetted and trained personnel to implement them." One expert has called it "an authoritarian roadmap to dismantling a thriving, inclusive democracy for all."

Austin and Richwine issued a more focused warning about the project and its policy document, writing:

The authors of the Mandate want little to no role for the government in managing student debt portfolios. Ultimately, they want the private sector to take over completely, but the more feasible proposal is shifting the federal government's role from direct lender back to guarantor. As mentioned above, while this approach is profitable to lenders, it is more costly to the federal government. The Mandate's authors wish to "completely reverse the student loan federalization" by gradually eliminating the Office of Federal Student Aid (FSA). Distribution of federal loans would then be a private operation, with a new public corporation acting as the monitor.

The Mandate authors wish to phase out all existing income-driven repayment (IDR) plans and replace them with an IDR that would have more narrow eligibility rules. Ideally, the goal is that "there should be no loan forgiveness." This would remove the possibility of student loan forgiveness for countless individuals who make consistent payments but have no hope of fully paying off the loan.

The section on education reform also features a recommendation that colleges have "skin in the game," to enforce accountability for the indebtedness of their students. Essentially, a college would be incentivized to keep costs low if it were required to pay penalties when its students default on student loans.

"This idea once had bipartisan support on the Hill, but many have come to realize that this would likely have adverse effects on institutions that largely admit students from underserved populations," Austin and Richwine wrote, pointing to community colleges and historically Black colleges and universities. "These schools might reduce their admission of low-income students to avoid penalties, an outcome that would sacrifice educational equity."

"Alternatively, universities that expect to be paying these penalties—because they continue to prioritize enrolling low-income and minority populations—would increase tuition to account for these expected costs," they continued. "Neither of these options bodes well for the sustainability of accessible higher education. Furthermore, private colleges already invest in their students by funding financial aid programs from their own resources."

With less than six months until the election, the pair concluded that on student debt, "the Biden administration has recognized the exigency of this crisis in a way the Trump administration never did. The Mandate for Leadership suggests that a second Trump administration would not pursue student debt forgiveness, allowing the crisis to worsen at the expense of so many struggling Americans."