In a significant executive order issued on Thursday, former U.S. President Donald Trump initiated the dismantling of critical functions within the federal Department of Education. This decision has sparked widespread concern about the future of student loan programs and their implications for the 43 million Americans, as well as thousands of international graduates, who depend on them.
The order substantially reduces the Education Department’s authority, cuts its workforce by nearly half, and raises serious questions about the management of federal student loans moving forward.
Although the Trump administration has assured that core student aid programs, such as federal loans and Pell Grants, will remain unchanged “for now,” this assurance may only be temporary.
Implications for U.S. Students:
1. Delays and Confusion in Loan Servicing
With a significant portion of the Office of Student Aid’s staff laid off or offered buyouts, students and borrowers may experience longer wait times for application processing, payment assistance, and issue resolution.
A former department official warned that staff responsible for notifying borrowers before they default have already been dismissed, potentially increasing the risk of missed payments and penalties.
2. Uncertainty Around Loan Forgiveness
Trump’s executive order aims to restrict the Public Service Loan Forgiveness (PSLF) program. Under the proposed changes, borrowers employed by NGOs or public institutions that oppose Trump’s political agenda—such as those advocating for LGBTQ+ rights or immigration reform—could be excluded. This not only jeopardizes the financial stability of current public servants but also discourages new graduates from pursuing careers in public service.
3. Cancellation of Affordable Repayment Plans
The administration has effectively halted the SAVE Plan, introduced under the Biden administration, which allowed borrowers to cap monthly payments based on their income. Officials have stated that the plan is “not coming back,” and applications for other income-driven repayment plans have been paused for at least three months. When these plans resume, they may require higher monthly payments, placing additional strain on low-income borrowers and recent graduates.
4. Privacy Concerns
Reports that Elon Musk’s Department of Government Efficiency (DOGE) has accessed borrowers’ private loan data have caused alarm among students and recent graduates. Although a court temporarily blocked access in some cases, the issue remains unresolved. Privacy advocates warn that this data could be used for political targeting or surveillance, eroding trust in the federal loan system.
5. Erosion of Consumer Protections
Trump’s overhaul of the Consumer Financial Protection Bureau (CFPB)—a key agency in exposing student loan fraud and securing refunds for borrowers—means students will have fewer avenues for recourse if they are misled or exploited by loan servicers. The dismissal of the student loan ombudsman and the discontinuation of lawsuits against predatory lenders are seen as enabling misconduct.
Global Impact and Warning Signs
While primarily affecting American students, the ripple effects could extend beyond U.S. borders. Many international students studying in the U.S. rely on federal aid programs, and foreign universities may reconsider partnerships or exchange programs if Washington withdraws from regulating or supporting its education system.
In an environment already strained by rising tuition fees, housing costs, and economic uncertainty, these changes could make higher education even less accessible—particularly for underprivileged and minority communities.
Colleen Campbell, a former senior official at the Office of Student Aid, expressed her dismay, stating, “I’ve dedicated my career to supporting college affordability… and it is heartbreaking to see that dissolving before my eyes.”
While the Trump administration claims the changes are about “returning power to the states,” critics argue that the real aim is to defund education, weaken student protections, and shift the burden of higher education onto individuals who lack the resources to manage it.
For millions of current and future students, the message is clear: pursuing a college degree in the U.S. has become significantly more challenging.
