Can Trump Rescind Student Loan Forgiveness From Student Loan Borrowers

Could Trump Rescind Student Loan Forgiveness? Here’s What Borrowers Need to Know

With Donald Trump’s return to the White House, student loan borrowers are understandably anxious about the future of student loan forgiveness programs. Over the last four years, the Biden administration has wiped out over $180 billion in student loan debt through various initiatives, including Public Service Loan Forgiveness (PSLF), borrower defense claims, and the now-defunct broad-based relief plan. However, Trump has been vocal about his opposition to student debt cancellation, calling it a “total catastrophe” and signaling a desire to dismantle the Department of Education.

While there remains tremendous uncertainty for those who are awaiting the forgiveness of current student loans, borrowers who have already received forgiveness may be on edge, too. Many may be asking if the Trump administration will claw back forgiven student loans and force borrowers to repay.

Can the Government Take Back Student Loan Forgiveness From Former Student Loan Borrowers?

The short answer: No, not for borrowers who legitimately received forgiveness.

The debt is gone once the Department of Education officially discharges a borrower’s loan. Experts agree that reversing legally granted forgiveness would be challenging and unprecedented. “If you have a letter from the Department of Education stating your loan balance is zero, they really can’t claw that back,” said Mark Kantrowitz, a financial aid and student loan expert, in an interview with CNET. “The actual promissory note you sign states that you’re eligible for certain types of forgiveness, so you could go to court and enforce that.” Elaine Rubin, a student loan policy expert, echoed this sentiment, saying that the risk of rescinding forgiveness is “extremely low to nonexistent.” The only known instances of revoked forgiveness involved errors or fraud, not policy reversals.

Andrew Gillen, a research fellow at the Cato Institute’s Center for Educational Freedom, a libertarian think tank, concurred in a 2024 analysis, remarking that “there is virtually no chance for this burden on the taxpayer to be reversed. In a detailed analysis, Kantrowitz articulated legal precedents and contractual rulings that would make clawing back forgiven debt quite difficult. He commented, “historically, courts have treated student loan forgiveness as sacrosanct and protected from retroactive reversal.”

What Could Change for Borrowers Still Seeking Student Loan Forgiveness?

While existing forgiveness is likely safe, Trump could take steps to limit future relief.

1. SAVE Plan Rollback—Biden introduced the Saving on a Valuable Education (SAVE) plan in 2023. This plan lowers payments for most borrowers and provides earlier loan cancellation. However, lawsuits have already placed the program in limbo, and a Trump administration could refuse to defend it in court or eliminate it through budget reconciliation.
2. Public Service Loan Forgiveness (PSLF) Modifications – Trump has previously proposed eliminating PSLF, which allows borrowers working in government and nonprofits to receive forgiveness after 120 qualifying payments. While scrapping the entire program would require an act of Congress, the administration could dismantle administrative expansions like the PSLF Buy Back program.
3. Stricter Borrower Defense Rules—The Biden administration expanded borrower defense rules, making it easier for students defrauded by predatory schools to get relief. Trump could reinstate stricter criteria similar to those during his first term.
4. Reversing Bankruptcy Discharge Rules – In 2022, Biden’s Department of Education and the Justice Department made discharging student loans in bankruptcy easier. Trump could roll back these changes, making obtaining student loan bankruptcy relief more challenging.

What Should Borrowers Seeking Student Loan Forgiveness Do?

If you have already received forgiveness, rest assured that your loans won’t suddenly reappear. However, for borrowers currently in repayment or pursuing forgiveness, now is the time to take proactive steps:

• Consider Switching from SAVE – Given the likelihood of SAVE being dismantled, borrowers may want to switch to another income-driven repayment (IDR) plan that offers forgiveness after a set period.
• Act Quickly on PSLF Buy Back—Borrowers who qualify for PSLF should consider utilizing the Buy-Back program before potential changes.
• Monitor Communications from Loan Servicers – Keep copies of servicer correspondence, payment records, and forgiveness approvals. Documentation will be key if future disputes arise.

The Bottom Line On Clawing Back Student Loan Forgiveness

The confirmation hearing for Linda McMahon, Trump’s nominee to lead the Department of Education, is scheduled for later this week. It is likely that there will be a flurry of activity after her likely confirmation to reshape student loan policy and impact student loan forgiveness policies going forward; however, those who have already had their loans forgiven should be able to breathe easy.

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