WASHINGTON —To the cheers of the House’s ruling Republicans, who hated forgiving student loans—and thus taking money out of financiers’ hands—even during the coronavirus-caused depression, GOP President Donald Trump will throw an estimated five million student loan borrowers to the financial wolves.
The decision, to be implemented starting May 5, says borrowers who are behind on their payments will start receiving collection notices from the U.S. Treasury. If they still stay behind—even if they’re paying something—Treasury will garnish their wages, yank tax refunds and cut Social Security benefit offsets.
And then it’ll throw them on the “mercy,” or lack of it, of debt collectors.
Trump’s action is directly opposite of what Democratic President Joe Biden tried to do administratively until Republican-named federal judges in deep-red states said he couldn’t: Forgive the loans to students who, due to the pandemic and through no fault of their own, fell behind because they had lost their jobs.
With Pell Grants, the other major form of federal college and university student aid, not keeping up with the rising costs of college and graduate schools, more and more students have been forced to borrow instead. The coronavirus depression put them in the financial crunch.
Trump, and the congressional GOP, thinks the students who are behind are ripping taxpayers off. Billionaires who don’t pay their fair share of taxes are, in their estimation, not a problem at all.
Senator steps forward
One top lawmaker, Sen. Patty Murray, D-Wash., former chair of the Senate Health, Education, Labor and Pensions Committee and now the top Democrat on the Senate Appropriations Committee—which is actually supposed to help decide student loan spending—say the students are not cheating taxpayers. So does Mike Pierce, executive director of the Student Borrower Protection Center.
“Trump is robbing Americans of the promised student debt relief they are owed under law while he demands trillions in tax cuts for billionaires like himself. It’s as outrageous as it is un-American,” said Murray.
Her statement also covers another student loan forgiveness program Trump is deep-sixing, forgiving debt for graduates who go on to public service careers as Teachers, Fire Fighters and EMTs.
Pierce not only denounced Trump’s edict, his center noted Trump’s Education Department is slow-walking current student loan forgiveness applications. Left unsaid: Trump, through his chainsaw-wielding multibillionaire Elon Musk, fired half of the department’s headquarters staff. Many of them processed loan applications.
“For five million people in default, federal law gives borrowers a way out of default and the right to make loan payments they can afford,” said Pierce. “Since February, Donald Trump and Linda McMahon”—a GOP big giver who’s Trump’s Education Secretary—”blocked these borrowers’ path out of default and are now feeding them into the maw of the government debt collection machine. This is cruel, unnecessary, and will further fan the flames of economic chaos for working families.”
Pierce’s center explained that beginning in February, Trump “chose to block access to affordable student loan payments by removing the Income-Driven Repayment (IDR) and consolidation application” students used to seek forgiveness. It also “secretly ordered student loan servicers,” the financiers, “to halt all application processing.
“Prior to the Trump Administration’s decision to remove IDR applications and halt application processing, more than a million borrowers remained in a backlog waiting for their application to be processed. Only after pressure from a lawsuit filed by SBPC and on behalf of the Teachers/AFT did the administration restore the application.
“To date, the administration has yet to begin widespread processing of IDR applications, which has forced borrowers to remain in economic limbo.”
The Republican attitude towards Trump’s move was summed up by House Education and the Workforce Chairman Tin Walberg, R-Mich. He wrapped himself in the mantle of taxpayers’ protector.
“The Biden-Harris administration’s misguided student loan policies forced hardworking taxpayers to cover the cost of the loan repayment freeze—even if they never went to college or took out student loans. Congress mandated payments resume in 2023, but the Biden-Harris administration willfully and unconstitutionally ignored this mandate, creating chaos in the student loan repayment system and abusing Americans’ tax dollars,” Walberg charged, without evidence.
“It is time for repayment to resume while we work to address skyrocketing, opaque college costs and restore stability in the student loan repayment system. President Trump is getting back to the letter of the law,” Walberg proclaimed.
We hope you appreciated this article. At People’s World, we believe news and information should be free and accessible to all, but we need your help. Our journalism is free of corporate influence and paywalls because we are totally reader-supported. Only you, our readers and supporters, make this possible. If you enjoy reading People’s World and the stories we bring you, please support our work by donating or becoming a monthly sustainer today. Thank you!
CONTRIBUTOR
MOST POPULAR TODAY
As Republicans ram through Trump’s Medicaid cuts, critics predict: ‘People will die’
Trump lawyers tell Supreme Court that Constitution doesn’t apply to the president
Appeals Court gives Trump green light to trash federal workers’ union contracts
DOJ opens civil rights investigation after Chicago mayor celebrates office’s diversity
With labor under siege, Coalition of Black Trade Unionists to hold critical convention