Student Loans & Higher Education

Updated July 2026 22 primary sources

Federal student loan policy has been overhauled on multiple fronts since 2025.

SAVE plan collapsed and its enrollees were pushed into forbearance — The Biden-era SAVE repayment plan was blocked by an appeals court in February 2025, shifting roughly 7.5 million enrollees into interest-accruing forbearance, with the Trump administration and challenging states later settling to end SAVE permanently (Reuters, Protect Borrowers).
OBBBA rewrote federal loan repayment — President Trump's July 2025 tax-and-spending law phases out SAVE, PAYE, and ICR by mid-2028, replacing them with a new income-based Repayment Assistance Plan (RAP) and a tiered Standard Repayment Plan starting July 1, 2026, while capping loan amounts (Yahoo Finance).
The same law created a new tax on university endowment income — A tiered excise tax on endowment income was added alongside the repayment overhaul (Tax Policy Center).
The administration has frozen and renegotiated research funding at elite universities — Billions in federal research funding at Columbia, Harvard, Penn, and other schools have been frozen or renegotiated over antisemitism and DEI complaints, and a "Compact for Academic Excellence" ties funding to admissions and speech policies (NPR).
For-profit college accountability rules are being loosened — The administration moved to relax the 90/10 rule and replace the "gainful employment" test with a broader earnings-based standard (Inside Higher Ed, Department of Education).
Total U.S. student debt keeps climbing — It has reached roughly $1.87 trillion as collections on defaulted loans resumed in 2025 (LendingTree).

The Two Positions

Where each side stands

Every point below is sourced to a real organization, official, or news report — click through to read it in full context.

Conservative

Courts and Congress rightly stopped an illegal executive overreach

The SAVE plan and mass forgiveness attempts exceeded the Education Department's statutory authority, and the 8th Circuit's 2025 ruling and the subsequent settlement to permanently end SAVE affirm that only Congress, not unilateral executive action, can restructure trillions in federal debt (Reuters, Protect Borrowers).

Taxpayers should not subsidize other people's degrees

Heritage Foundation argues that loan "forgiveness" simply shifts unpaid balances onto taxpayers who never attended college or already paid off their own loans, calling it fundamentally unfair wealth redistribution (Heritage Foundation).

The new Repayment Assistance Plan restores fiscal discipline

RAP requires every borrower to make at least a modest payment, ties amounts to actual income, and closes the loophole that let some SAVE borrowers pay $0 indefinitely while balances grew, protecting the long-term solvency of the federal loan program (Yahoo Finance).

Universities, not taxpayers, should bear more of the cost of runaway tuition

Education Secretary Linda McMahon has argued that colleges "profited massively" from federal loan subsidies while hiking tuition and building multibillion-dollar endowments, justifying both the new endowment tax and resumed collections on defaulted loans (Inside Higher Ed).

Elite universities must be held accountable for civil-rights violations and ideological capture

The administration's settlements with Columbia and Penn, and its compact offered to other universities, are framed as necessary conditions for continued taxpayer funding after schools allegedly tolerated antisemitism, race-based practices, and viewpoint discrimination (White House, Wikipedia — Compact for Academic Excellence).

Accountability rules should apply equally to all colleges, not just for-profits

The administration's new earnings-based accountability rule and its rollback of the narrower gainful-employment framework are presented as ending a "double standard" that let public and nonprofit programs with poor outcomes escape scrutiny that only for-profit schools faced (Stars and Stripes, Department of Education).

Progressive

The default and delinquency crisis is a manufactured emergency

Senator Elizabeth Warren and 62 lawmakers wrote that Trump administration policies "fueled this default and delinquency crisis" by blocking affordable repayment options and resuming aggressive collections, calling it the largest student loan default crisis on record (Sen. Warren).

RAP is a significant benefit cut disguised as reform

The Student Borrower Protection Center estimates a typical borrower with a bachelor's degree will pay roughly $2,929 more per year under the new plan than under SAVE, with forgiveness delayed from 10–25 years to 30 years and a new mandatory minimum payment even for the lowest-income borrowers (Student Borrower Protection Center).

Ending SAVE abandoned millions of borrowers in limbo

Advocates note that 7.5 million SAVE enrollees were placed in forbearance, initially interest-free but now accruing interest again, while a 550,000-application backlog for income-driven repayment plans left borrowers unable to access any affordable option (Protect Borrowers, Sen. Warren).

Debt cancellation is a racial and economic justice issue

The NAACP passed a 2025 resolution calling for full forgiveness for long-term borrowers who have repaid for 20 years or more, arguing student debt disproportionately burdens Black communities and deepens the racial wealth gap (NAACP).

Federal research funding cuts and "compacts" punish universities and students, not wrongdoing

Critics describe the administration's funding freezes at Columbia, Harvard, and other schools, and its push to condition funding on admissions and speech policies, as coercive tactics that undermine academic independence rather than genuine civil-rights enforcement (NYT, Knight First Amendment Institute).

Borrowers are already financially fragile, and new burdens deepen hardship

Pew Research found that even before RAP took effect, 51% of borrowers didn't feel financially secure and 74% had experienced a negative financial event such as missed rent or overdrawn accounts in the prior year, underscoring advocates' argument that higher payments and longer terms will worsen outcomes (Pew Charitable Trusts).

Common Ground

Key facts both sides cite

Data and polling that inform the debate — both camps draw on these figures, even when they read them differently.

Total student debt — Americans owe roughly $1.87 trillion in federal and private student loan debt as of Q1 2026, held by about 42.8 million federal borrowers with an average federal balance of $39,547 (LendingTree).

Default and delinquency surge — An estimated 1 million federal borrowers defaulted in Q4 2025 and 2.6 million more in Q1 2026, with the overall student loan delinquency rate rising to 10.3% after collections resumed in May 2025 (New York Fed / Liberty Street Economics).

Rising tuition costs — Average published tuition and fees for in-state students at public four-year colleges reached $11,950 in 2025–26 (up 2.9%), while private nonprofit sticker prices rose about 4% to roughly $45,000, according to the College Board's annual pricing report (College Board).

Public opinion is divided and program-specific — Roughly 55% of Americans support some form of student loan forgiveness, but support varies sharply by program — Public Service Loan Forgiveness polls above 70% across party lines, while full cancellation of all balances draws only about 29% support (USPollingData 2026 survey).

Sources

Every citation on this page

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