GOP Forcing Eight Million Student Loan Borrowers Into Repayment [View all]

[Celerity]

The most affordable of all the federal repayment programs is ending sooner than planned after Trump conspired with red-state attorneys general to kill it.

https://prospect.org/2025/12/16/gop-forcing-eight-million-student-loan-borrowers-into-repayment/

Workers who had been repaying their student loans via President Joe Biden’s Saving on a Valuable Education (SAVE) program are looking down the barrel of an even more difficult 2026 than expected. The program is likely ending, the Trump administration announced last week, so those who were enrolled must switch to a new plan, any of which will increase their monthly payments. SAVE is an income-driven student loan repayment program mandated by statute and consistent with what five presidents had instituted for over three decades without any legal challenges. It expedited loan forgiveness and allowed low-income borrowers to make monthly payments as little as $0.

That was too generous for attorneys general in Arkansas, Florida, Georgia, Ohio, Oklahoma, Missouri, and North Dakota, who together sued last July. Trump’s One Big Beautiful Bill Act would have eliminated SAVE and three other income-driven repayment programs, forcing borrowers to change plans by July 1, 2028. But a deal Trump cut with the red-state attorneys general will move that kill date up if a judge approves the settlement terms, which will force nearly eight million borrowers into an untimely repayment. “This is a policy choice by the Trump administration to make it worse for everybody, and we’re all going to pay the price,” said Mike Pierce, co-founder and executive director of Protect Borrowers and a former Consumer Financial Protection Bureau regulator who was the higher-education lead subject matter expert.

The end of SAVE comes as Republican policy choices are increasing costs across the board. Trump’s international tariff program, which recently required taxpayers to bail out farmers for $12 billion, has raised prices on imported goods, while the end of enhanced subsidies for health insurance on Affordable Care Act marketplaces will cause switches to plans with less coverage or dropping insurance entirely, as the Prospect recently reported. New burdens on student loan borrowers have gotten less attention, but they add to affordability pressures for millions of Americans.

Some borrowers said having to make student loan payments now would require that they take a second job. One nonprofit worker shared their story on condition of anonymity. SAVE allowed them to make no monthly payments on $21,000 in federal student loan debt, they said, though they still paid $10 a month because paying nothing “sounded weird.” Plus, someone at student aid advised them years ago that paying a little bit was a good practice, so they didn’t want to encounter “some bureaucratic thing” years later where they actually were required to make small payments. But then the servicer changed three times and more advice was not forthcoming.

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