President Trump generally does not support student loan forgiveness and would likely seek an end to some forgiveness programs for student loans. But can the President reverse student loan forgiveness that has already been granted? Probably not. Can President Trump Reverse Student Loan
It’s sparked a lot of concern, though, in recent weeks, especially as Trump has dismantled key parts of the Department of Education and just last week announced plans to reform PSLF, which could potentially affect the stability of the forgiveness already granted. Then you add in the end of the SAVE plan, and borrowers are worried. Can President Trump Reverse Student Loan
President Biden provided $175 billion in student loan forgiveness for 4.6 million borrowers, more than any previous president. For borrowers that have already received forgiveness, the question looms:
Could Trump claw back student loan forgiveness that has already been granted? The answer is generally no. Can President Trump Reverse Student Loan
Let’s break it down and learn why past loan forgiveness is likely protected, but future loan forgiveness could be in jeopardy.
President Trump’s Position On Student Loan Forgiveness
During President Trump’s first term, his administration proposed eliminating the Public Service Loan Forgiveness (PSLF) program. The annual education appendices of the President’s budgets for fiscal years 2018, 2019, 2020, and 2021 reflected this.
For example, the FY2021 budget sought to replace the existing Income-Driven Repayment (IDR) plans with a new Single IDR plan that would be ineligible for PSLF. The FY2021 budget described the proposed Single IDR plan as a streamlined repayment option intended to reduce complexity. Can President Trump Reverse Student Loan
Importantly, the budget proposal noted that existing borrowers would be grandfathered in, allowing those who borrowed prior to July 1, 2021, to continue accessing the original IDR plans and PSLF.
The language in the previous budgets was substantially similar.
The repeated efforts to eliminate PSLF were unsuccessful, primarily because Congress created these programs through legislation, and only Congress has the authority to repeal them. This highlights the limits of executive power in altering statutory programs.
In addition to budget proposals, President Trump took executive action on student loans. On August 21, 2019, he signed an executive memorandum that forgave the federal student loan debt of 25,000 disabled American veterans and established a data match between the U.S. Department of Education and the Department of Veterans Affairs to streamline future student loan discharges for disabled veterans. Can President Trump Reverse Student Loan
Following the U.S. Supreme Court decision in Biden v. Nebraska (600 U.S. 477) on June 30, 2023, which blocked President Biden’s broad student loan forgiveness plan, the Trump campaign issued a press release on July 6, 2023 praising the ruling.
While there are no student loan proposals on the Trump campaign website, his remarks during the September 10, 2024 Presidential Debate criticized President Biden’s efforts, calling them “a total catastrophe.” He argued that Biden’s plan misled borrowers with false hopes of debt relief, leading to frustration and disappointment among students who expected their loans to be forgiven. Can President Trump Reverse Student Loan
The Heritage Foundation’s Project 2025, although not formally endorsed by President Trump, contains policy recommendations that align with many of his administration’s priorities. Note that Lindsey M. Burke, author of the Department of Education chapter, has no known connection to the Trump administration.
Can The President Revoke Previous Loan Forgiveness?
Could a future President claw back forgiveness that has already been provided?
No, the President cannot retroactively revoke student loan forgiveness once it has been finalized.
Once the federal government discharges a borrower’s debt and the borrower has received official notification, the forgiveness is considered permanent and final. Although the eligibility criteria for future borrowers can be changed, forgiveness that has already been provided is legally binding and typically irreversible. Can President Trump Reverse Student Loan
Trending Article Right Now
Education Department Seeks To Change Rules For PSLF
- A new proposed negotiated rulemaking sessions is to take place focusing on PSLF and PAYE/ICR forgiveness.
- Here’s what can happen if these rules go into effect. Can President Trump Reverse Student Loan
Legal Precedents And Court Rulings
Historically, courts have treated student loan forgiveness as sacrosanct and protected from retroactive reversal.
For instance, in the June 24, 2024 ruling in Alaska v. U.S. (Case No. 24-1057-DDC-ADM) concerning the SAVE repayment plan, the U.S. District Court for the District of Kansas described student loan forgiveness as having an “irreversible impact.”
The court cited the Eighth Circuit’s decision in Nebraska v. Biden, noting that the HEROES Act forgiveness posed irreparable harm “considering the irreversible impact the Secretary’s debt forgiveness action would have.” (Nebraska v. Biden, 52 F.4th at 1045-47, rev’g 636 F. Supp. 3d 991 (E.D. Mo. 2022)) Can President Trump Reverse Student Loan
The court used this argument to justify an injunction, emphasising that once forgiveness is granted, it cannot be undone. The court said that you “cannot unscramble this egg…”
Similarly, in a ruling in Missouri v. Biden (Case No. 4:24-cv-00520-JAR), decided on the same day, the U.S. District Court for the Eastern District of Missouri refused to reverse any forgiveness already granted. Instead, the court only stopped any new loan forgiveness under the questioned Final Rule’s SAVE repayment plan, making it clear that forgiveness already given cannot be taken back. Can President Trump Reverse Student Loan
Legislative And Contractual Protections
The federal government also generally does not attempt to claw back forgiveness once granted, and retroactively changing the terms of forgiveness would likely face significant legal challenges. If Congress were to pass a law repealing a forgiveness program like the Public Service Loan Forgiveness (PSLF), existing borrowers would typically be grandfathered in. Changes would apply only to “new borrowers” — defined as individuals who, on the specified date, have no outstanding federal student loan balance. Can President Trump Reverse Student Loan
Two notable examples illustrate this approach:
- The Health Care and Education Reconciliation Act of 2010 (PL 111-152) modified the terms of the Income-Based Repayment (IBR) for new borrowers on and after July 1, 2014. It reduced the percentage of discretionary income from 15% to 10% and shortened the forgiveness term from 25 years to 20 years. [20 USC 1098e(e)]
- The Higher Education Amendments of 1998 (P.L. 105-244) restricted Teacher Loan Forgiveness to new borrowers as of October 1, 1998. [20 USC 1087j(b)]
These examples show that changes to forgiveness programs have historically been applied prospectively, not retroactively, to respect the contractual agreements already in place. Can President Trump Reverse Student Loan
Due Process And Breach Of Contract
Retroactively removing loan forgiveness would likely violate due process and could be challenged in court under the principle of promissory estoppel, which prevents the government from revoking a promise that borrowers have relied upon. It would also likely be considered a breach of contract since all Federal loan borrowers sign a contract for the loan.
The Master Promissory Note (MPN), which borrowers sign when taking out federal student loans, outlines the specific terms and conditions under which loans may be forgiven or discharged. It explicitly references the Higher Education Act of 1965, providing a legal basis for forgiveness programs. Can President Trump Reverse Student Loan
Key provisions in the MPN include:
- Under the REPAYE Plan, any remaining loan amount will be forgiven after you have made the equivalent of either 20 years of qualifying monthly payments over a period of at least 20 years (if all of the loans you are repaying under the plan were obtained for undergraduate study) or 25 years of qualifying payments over a period of at least 25 years (if any of the loans you are repaying under the plan were obtained for graduate or professional study).
- Under the PAYE Plan, if your loan is not repaid in full after you have made the equivalent of 20 years of qualifying monthly payments over a period of at least 20 years, any remaining loan amount will be forgiven.
- Under the IBR Plan, if your loan is not repaid in full after you have made the equivalent of 25 years of qualifying monthly payments over a period of at least 25 years, any remaining loan amount will be forgiven.
- Under the ICR Plan, if your loan is not repaid in full after you have made the equivalent of 25 years of qualifying monthly payments over a period of at least 25 years, any remaining loan amount will be forgiven. Can President Trump Reverse Student Loan
- The MPN also identifies conditions under which the loans may be discharged (forgiven), including the death discharge, total and permanent disability discharge, closed school discharge, false certification discharge, identity theft discharge, unpaid refund discharge, teacher loan forgiveness, public service loan forgiveness, and borrower defense to repayment. Can President Trump Reverse Student Loan
Has Student Loan Forgiveness Ever Been Reversed?
In February 2024, a small number of borrowers experienced a reversal of loan forgiveness under the Public Service Loan Forgiveness (PSLF) program by MOHELA, a federal loan servicer. However, this was not a case of clawing back properly granted forgiveness; Can President Trump Reverse Student Loan rather, the forgiveness had been granted in error due to incorrect information.
The reversal affected borrowers who had mistakenly been credited with qualifying payments they had not actually made. An audit by the U.S. Department of Education found discrepancies in the data, particularly involving incorrect dates on the borrowers’ PSLF employment certification forms. These errors resulted in borrowers receiving PSLF credit even though they did not meet the eligibility requirements. Can President Trump Reverse Student Loan
It is important to distinguish between correcting an error and a true clawback of forgiveness. In this instance, the forgiveness was reversed because it was mistakenly approved; the borrowers had not met the necessary requirements for PSLF at the time. In contrast, a clawback would involve revoking forgiveness that had been legitimately earned and granted under the applicable rules.
The federal government retains the authority to revoke loan discharges when a borrower is found to be ineligible based on the criteria in effect at the time of forgiveness. It could also revoke student loan forgiveness in cases of fraud.
This ensures that forgiveness programs are administered correctly and in accordance with the established guidelines, maintaining fairness for all borrowers who comply with the program’s requirements. Can President Trump Reverse Student Loan
Student Loan Forgiveness Can Be Revoked For Future Borrowers
The federal government does have the authority to modify the requirements for student loan forgiveness and discharge, but these changes apply only to future borrowers.
Once a loan has been forgiven under existing rules, it cannot be revoked retroactively.
However, eligibility criteria for new borrowers can be adjusted based on the method by which the forgiveness program was established.
Changes To Statutory Loan Forgiveness (Programs Passed by Congress)
If a loan forgiveness program was created through legislation, only Congress has the power to modify or revoke it. The President cannot unilaterally eliminate statutory forgiveness provisions via executive action. To modify these programs, Congress must pass a new law, requiring a majority vote in the U.S. House of Representatives and, typically, a super-majority vote (60 votes) in the U.S. Senate to overcome a filibuster. Can President Trump Reverse Student Loan
There are exceptions, such as the use of a budget reconciliation bill, which can pass with a simple majority vote in the Senate. However, the Byrd Rule restricts the scope of such bills to provisions that have a direct impact on the federal budget, preventing non-budgetary policy changes. Additionally, changes to Senate procedures, such as eliminating the filibuster, could alter the legislative process. Can President Trump Reverse Student Loan
Even with proposals to end Public Service Loan Forgiveness, it won’t happen with budget reconciliation.
Examples of statutory loan forgiveness programs include:
- Public Service Loan Forgiveness
- Teacher Loan Forgiveness
- Total and Permanent Disability Discharge
- Death Discharge
- Time-based forgiveness in Income-Contingent Repayment (ICR) and Income-Based Repayment (IBR)
- Borrower Defense to Repayment
- Closed School Discharge, Identity Theft Discharge, False Certification Discharge, and Unpaid Refund Discharge
Changes To Regulation-Based Loan Forgiveness (Programs Passed via Department of Education Processes)
When loan forgiveness programs are established through federal regulations, the U.S. Department of Education can amend or repeal these regulations. This process, however, can take up to a year due to the requirements of the rulemaking process. If new regulations are published in the Federal Register by November 1, they typically take effect on the following July 1. In some cases, the Secretary of Education may expedite implementation. Can President Trump Reverse Student Loans?
Congress also has the option to block existing regulations by passing a law, though this requires legislative action. (Congress can also block new regulations within 60 legislative days under the Congressional Review Act.)
While Borrower Defence to Repayment was initially established by law, the specific rules and criteria have been shaped through regulations, making them subject to modification through the regulatory process. Can President Trump Reverse Student Loans?
Changes To Executive Order-Based Loan Forgiveness
If a forgiveness policy was created via an executive order, it can be modified or revoked by a subsequent executive order. However, executive orders cannot override loan forgiveness programmes established by legislation or regulations.
An example of this is the bankruptcy discharge policy for student loans. The U.S. Bankruptcy Code (11 USC 523(a)(8)) sets the standard for undue hardship in the bankruptcy discharge of student loans. However, the courts came up with other tests, like the Brunner Test and the Totality of Circumstances Test. In 2023, the Biden administration implemented a policy to reduce the government’s opposition to bankruptcy discharge petitions in certain cases, such as when the cost of collection exceeds the expected recovery. Can President Trump Reverse Student Loan
A future executive order could reverse this policy, changing the government’s position on bankruptcy discharges without modifying the underlying law.
Related: Is Student Loan Forgiveness By Executive Order Legal?
Common Questions
Can a President reverse student loan forgiveness that has already been granted?
No, the President cannot reverse student loan forgiveness that’s already been granted.
Can a future President change student loan forgiveness programmes for new borrowers?
Potentially. Congress can pass laws and the President can sign off on laws that change student loan forgiveness for borrowers after the effective date.
What is President Trump’s general stance on student loan forgiveness programs?
President Trump generally seems against student loan forgiveness, except in cases like disability.
What legal protections prevent the retroactive reversal of student loan forgiveness?
Multiple statutes and precedents prevent the reversal of student loan forgiveness, except in cases or error or fraud.
Legal precedents, statutory frameworks, and contractual obligations outlined in the Master Promissory Note protect borrowers from retroactive changes. Can President Trump Reverse Student Loan Can President Trump Reverse Student Loan
While future legislation can modify forgiveness programmes for new borrowers, existing recipients of forgiveness are typically shielded from any clawbacks or reversals. Can President Trump Reverse Student Loan