Student loan forgiveness programs could be in jeopardy if Trump is elected

At a June 18 campaign rally in Racine, Wisconsin, former President Donald Trump criticized the Biden administration's efforts to cancel student debt, calling them “despicable” and “not even legal.”

“The students don't believe it, by the way,” Trump told a crowd of several thousand people at Lake Michigan.

Trump also cited the Supreme Court's 2023 decision blocking President Joe Biden's first attempt to forgive student loans on a large scale: “He got reprimanded, and then he did it again.”

“There will be a lot more criticism to come,” Trump said.

As president, Trump called for the elimination of the U.S. Department of Education’s existing loan relief programs, including the popular Public Service Loan Forgiveness initiative, which benefits government workers such as members of the U.S. armed forces, first responders, public defenders, prosecutors and teachers. He also sought to slash the department’s budget, and his administration ended a program aimed at providing loan forgiveness to those defrauded by their schools.

Now that he is running for president again, Trump appears intent on making even deeper cuts to student financial aid programs. He has repeatedly attacked Biden's loan relief policies, saying in a late 2023 campaign video that he would to close the Ministry of Education all together.

Excellent US education debt tops $1.6 trillionaccording to a 2022 report from the nonpartisan Congressional Research Service. Nearly 43 million people — or 1 in 6 adult Americans — have student loans, the report found.

Project2025A set of proposals developed by The Heritage Foundation on behalf of more than 100 conservative organizations, it argues that “student loans and grants should ultimately be returned to the private sector.” (Some conservatives argue that private companies would do a better job of lending money to students than the federal government.) The proposal also calls for limiting affordable repayment options for borrowers and ending the loan forgiveness offered under these plans after a certain period of time.

“Trump will undo President Biden’s proposals for student loan forgiveness,” said higher education expert Mark Kantrowitz. “He will loosen regulations on for-profit colleges as part of deregulation efforts and propose budget cuts, including potentially cutting funding for the U.S. Department of Education.”

In an emailed response, Steven Cheung, a spokesman for the Trump campaign, referred CNBC to sources, including Trump’s campaign website and a series of media articles, that portrayed student loan forgiveness as a boon for high-income earners and those who went to elite colleges. Less than 1% of federal student borrowers went to Ivy League colleges, according to Kantrowitz’s estimate.

Cheung did not answer specific questions from CNBC about what Trump plans to do regarding student debt and education if elected president.

Members of Trump's party, meanwhile, have already thwarted many of Biden's efforts to provide student loan relief. Most recently, lawsuits from Republican-led states including Florida, Arkansas and Missouri resulted in two federal judges halting implementation of key parts of the president's new repayment plan, which drastically reduced the monthly payments of many borrowers.

The preliminary injunctions prevented the Biden administration from forgiving any more debt under the Savings on a Valuable Education Act, or TO RESCUEplan, and from further reducing payments for enrolled borrowers in July, as planned. On Sunday, however, a federal appeals court granted the Department of Education’s request to stay one of those orders, allowing the department to move forward with reducing loan bills for SAVE enrollees.

Cody Gude, a social media consultant in Tampa, Florida, expects it will become harder and more expensive for Trump to pay off his roughly $34,000 in student loans if he wins.

“Now that inflation and student loans are starting up again, it has become quite a challenge,” said Gude, 35.

Gude said he was angry that Florida joined the lawsuit against the SAVE plan. He said he was looking forward to his student loan being reduced in July, so he wouldn’t have to deliver groceries through Instacart on top of his regular job.

“It hurts that my home state does not want to help its own citizens,” Gude said.

He said he worries that Trump, if elected, will cut financial aid for young people and that he plans to vote for Biden.

Many voters are happy with Trump's stance on student debt relief and question the fairness of forgiving loans to people who have benefited from higher education.

Only 15% of Republicans think student debt forgiveness is important, compared to 58% of Democrats, according to according to a mid-May national poll by the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research.

The Biden administration's latest proposal for student loan forgiveness received a record number of public comments, with more than 148,000 people share their opinion.

“I call on the Biden administration to stop imposing an unjust burden on Americans who did not go to college or pay off their student loans,” one wrote.

Another noted, “I worked overtime and three part-time jobs while in college.”

“College is a personal choice that involves a lot of adult decisions,” the second person said. “It is not the responsibility of the federal government to offload those personal decisions onto the taxpayers of our country.”

Elaine Parker, president of the Job Creators Network Foundation, a conservative advocacy group, said Biden was only canceling student debt in an attempt to buy votes.

“They don’t want to solve the problem,” Parker said. She said the root cause of the student loan crisis was skyrocketing tuition.

Parker said Congress should hold hearings and engage campus administrators to justify college programs' tuition increases, excessive administrative costs and lack of transparency about career opportunities.

She also said the private sector should play a greater role in financing higher education.

“Why are the banks being taken out of this?” Parker asked. “We’ve lost the free market forces in the college loan system.”

Higher education experts and consumer groups expressed concern about the reforms proposed by conservatives and Trump.

If the U.S. Department of Education were to close, “there would be complete chaos,” Kantrowitz said.

Such a move would mean an end to Pell Grants, one of the largest sources of financial aid for students, as well as federal student loans and work-study opportunities, he said.