The word "affordability" is all the rage these days. Get ready for some rage from those who will suddenly have to afford student-loan payments.
This starts with the attempts from the Joe Biden Regency to create an end run around Congress for a massive student-loan forgiveness plan. When that effort failed, the Biden administration attempted to create programs that would offer a de facto giveaway. That, however, got held up by state attorneys general – and gave Donald Trump an opening to shut it all down without ever spending a day in court:
The Trump administration has reached an agreement that could end President Biden's signature student loan repayment plan, a move that may force millions of borrowers back into repayment.
The Education Department on Tuesday announced a proposed settlement with the state of Missouri that it said would terminate the Saving on a Valuable Education, or SAVE, plan, an income-driven repayment plan that tabulates loan repayments based on a borrower's income and family size.
As part of the deal, which is pending court approval, the agency said it will not enroll any new borrowers in the SAVE plan and will deny all pending applications. All current SAVE borrowers will have a "limited time" to enroll in a new plan and begin repayments, according to the department's notice.
Again, this is what happens when presidents attempt to flex executive authority in places that requires legislative approval. The problem for Biden was that his idea of loan forgiveness would have cost at least $400 billion, which had no chance of passing even in a Congress controlled by Democrats. That would have required most of the appropriations up front, amounting to nearly a quarter of total annual discretionary spending. The Biden Regency tried to claim it had the authority to appropriate that funding without Congress, which courts shut down pretty quickly.
The SAVE Act was the end-around. Biden rolled it out aftwerward and expanded it in February 2024, when he needed to rally support for his flagging re-election chances. As Jazz described it, the SAVE plan was intended to be a sotto voce bailout for higher-end earners at the expense of everyone else:
So even if you took out a loan previously and have been paying it down (or in many cases, not paying it), the Biden Administration appears to be opening the door for anyone to somehow transfer over and become eligible for this non-payment option for qualifying borrowers. This just looks like yet another dodge to allow one specific set of borrowers to evade the obligations they took on while all other borrowers are out of luck. ...
But the people who are walking around with college degrees that should open the door to some of the best-paying jobs in the country (typically 84% higher than those with only a high school diploma) will be geting a free pass while everyone else will still have to slave away and pay off those other loans.
The Eighth Circuit blocked the SAVE Plan shortly afterward, after several states (led by Missouri) sued over the lack of authority for Biden to forgive student loans. That hasn't yet forced those who already enrolled in SAVE to start making their payments again. Trump and the GOP inserted a sunset for SAVE in the One Big Beautiful Bill, CNBC notes, just in case the court fight needed to continue.
Now, however, 7.6 million enrollees have to start affording their obligations again:
Based on the details, borrowers will likely need to leave the SAVE forbearance early next year, said higher education expert Mark Kantrowitz. That’s sooner than many advocates and borrowers may have expected: President Donald Trump’s “big beautiful bill” set the SAVE program’s expiration date at July 1, 2028. ...
SAVE came with two key provisions that the lawsuits targeted: it had lower monthly payments than any other federal student loan repayment plan, and it led to quicker debt erasure for those with small balances.
The proposed settlement comes four months after the Education Department resumed charging interest on the loans of borrowers who remained in the SAVE forbearance.
Will this interfere with Trump's new "affordability" message? Perhaps, but only for those few overlaps between MAGA and the heavy student-loan debt holders that exist. Trump can simply, and correctly, argue that those who take out loans should be expected to afford them for themselves rather than force others to afford those loans on the recipients' behalf. And this should put an end to attempts to buy votes with massive government wealth transfers to those already privileged with education from others who either paid for their own education or had to forgo college at all.
Editor's Note: President Trump is fighting to dismantle the Department of Education and ensure America's kids get the education they deserve.
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