Andrew Gillen
While the Biden administration’s efforts to forgive student loans were persistent, most of their plans were prevented or at least paused by the courts. And when the Trump administration took office, it was clear that the paused plans would never come into effect. But recent news that the administration settled a lawsuit to restart forgiveness under some plans has some observers wondering about the Trump administration’s intentions. So, has the Trump administration reversed course and now supports mass student loan forgiveness?
The short answer is no.
The longer answer is that decades of student loan repayment programs with loan forgiveness criteria mean that a significant amount of student loan forgiveness is already built into the system. In particular, there are some student loan forgiveness plans that were created by statute (such as income-based repayment [IBR] and Public Sector Loan Forgiveness [PSLF]) that were not changed by the recent reconciliation bill and a host of other repayment plans such as Pay as You Earn (PAYE), Revised Pay as You Earn / Saving on the Valuable Education [REPAYE/SAVE] that were created by regulation and which the reconciliation bill will shut down on July 1, 2028.
But that means that for the next few years, borrowers can repay under many of these plans (except those under a court injunction), and some borrowers will meet the criteria to have their loans forgiven. The settlement basically says that the administration will forgive loans under all legally established repayment plans for as long as they remain on the books.
Thus, the settlement is a win for the rule of law but doesn’t signify a shift in the Trump administration’s stance on mass student loan forgiveness.