The Struggle-La Lucha Baltimore bureau sat down with SLL writers Apryle Everly, Colby Byrd, and Jace Carter to understand what’s happening with student loans.
What’s going on with student loans?
AE & JC: We are officially in crisis mode. Starting back in early April, the Trump administration issued an executive order to dismantle the Department of Education (DOE), which, for those not familiar, was the primary institution through which federal student loans and grants get disbursed and collected. Although this EO couldn’t be carried out without approval from Congress, most of the staff already got fired within days after this announcement.
Next, Trump ordered that the entire federal student debt portfolio, totaling up to $1.7 trillion currently, be moved from the DOE to the Small Business Administration (SBA), which, on the surface, doesn’t seem like such a major change, as the SBA is another federal agency, meaning we’d still be debtors of the federal government. Whether or not this move does actually occur remains to be seen; we have no clear answers yet. However, we do know that moving the student debt portfolio from the DOE to the SBA would be 1) illegal, 2) administratively and practically difficult, and 3) could lead to possible errors with people’s loan servicer accounts.
Emphasizing the third point, for those still with outstanding loan payments, The Debt Collective (the first debtors’ union within the U.S.) strongly recommends going to studentaid.gov to find your current loan details and downloading and/or screenshotting your payment history, to protect yourself against these potential errors.
Moving the student debt portfolio to the SBA also raises a serious concern regarding the privatization of federal student loans. We’ve already seen Trump’s fascist administration, with the help of Musk’s DOGE, carry out mass layoffs of federal workers and either make cuts to essential services for working people like Medicare / Medicaid, Social Security, SNAP, etc., or privatize essential services like the Postal Service.
Could the portfolio move from the DOE to the SBA be just the first step in a lengthy legal loophole to then fully privatize student loans by handing them off to predatory corporations like Sallie Mae, SoFi, College Ave, or Ascent? Per Education Data Initiative, the average private student loan interest rate in 2025 falls anywhere between 3.45% to 16.24%. The capitalist class has completely screwed over my generation, Millennials, and Gen Alpha and Beta after us.
On April 29, GOP members on the House Education and Workforce Committee introduced the most dangerous higher-ed bill in U.S. history, the “Student Success and Taxpayer Savings Plan,” which, as of the day this was written, May 22, has passed the House and is now pending Senate approval. This bill, which would be voted on as part of a budget reconciliation package, strips the DOE of virtually every authority to cancel student debt, eliminates every loan repayment program and subsidized student loan (specifically grad plus loans which allow grad students to cover the full cost of their attendance), and cuts Pell Grant eligibility. In other words, this bill is essentially saying that now only the wealthy few can attend college, while working-class students will receive no help from the federal government to learn or pursue a career.
But perhaps the most gutting update of all: Since May 5, the Trump administration has restarted student loan collections on default accounts after a five-year hiatus, affecting over 5.3 million borrowers. The DOE is only giving 30 days’ notice of collection, instead of the usual 65 days, and may be skipping normal collection procedures.
This means that borrowers could have their wages garnished, and almost 200,000 people are already being warned that their Social Security and other federal benefits could be seized as early as next month. Retirees are especially at high risk, as over 2.9 million people 62 years and older have student loans (a 71% increase since 2017!), and if they lose their Social Security benefits, they will not receive critical essentials like food and transportation.
This all comes on the heels of a record-breaking $1 TRILLION war budget for 2025, in addition to further tax breaks for all the bloodthirsty billionaires who endorsed Trump’s 2nd presidency. Make no mistake, these progressively evil acts are nothing short of a declaration of war on the working class, particularly students, who have already faced immense repression from the ruling class for almost two years for protesting Israel’s genocide and ethnic cleansing of occupied Palestine.
CB: Currently, I am paying $600 a month on my student loans. My family is also paying on another college loan, where they are paying $400 a month. Before I got these payments set up, I was paying near to and sometimes over $1,000 a month on payments of one single loan. Other than the payments themselves, navigating the services and websites is a nightmare. Requiring multiple logins, and with different loans, you have to have multiple accounts and sign in to different portals.
How is it going to affect you?
JC: I currently owe roughly close to $70,000 in federal student loans through both Nelnet and ECSI, with close to $5,000 of that total being unpaid accrued interest through the day before this was written, May 21. I graduated from my undergrad program in May 2023 and went straight into my one-year master’s program, and I graduated from that program in September of 2024. Both my undergrad and grad loans remained in deferment until this past February, and my first loan payment was due in March. I immediately put that loan in forbearance because, despite how low the monthly payment is ($331.70) compared to the average for most people ($500-700+), I simply can’t afford to make consistent payments right now.
This is largely due to the fact that I’ve already been making $448 / month payments to my dad since March for all the Parent Plus loans he took out during my time in undergrad to avoid either one of us having to pay off $9-10,000+ tuition balances per semester. It’s total bullshit though because these loans are in his name, not mine, meaning he legally bears the responsibility.
Due to his extremely terrible economic circumstances, though, he’s making me and my brothers pay up for what he can’t afford. I don’t have a good relationship with him, but unfortunately, I can’t avoid paying him. I don’t have time for unnecessary lawsuits right now. I have been making really small $50 / month payments on my much smaller loan balance through ECSI, just to get rid of it quicker.
I’m extremely worried that should our loans collectively end up getting fully privatized in the near future, my loan interest rates could be jacked up even higher than what they already are now, making it damn near impossible to make any regular payments. Despite having a job that pays a fairly decent salary (by 2025’s standards, at least), my monthly rent / bills / expenses far outweigh the net wages I’ve been pulling in. I’m also very worried at the fact that we can only receive loan forbearance for a total of up to three years before we’re forced to make consistent payments or risk default and then collection, as described earlier.
And I know it won’t stop simply at wage and benefit garnishment either; try debtors’ prisons. The private prison industries are foaming at the mouth at the sight of another big profit-booster. As communists, we already know the endgame the capitalists want and have already been getting: for all the working class to be hopelessly indebted to them for the rest of their life. This student loans crisis is a disease that will continue to spread and will affect everyone, not just us, current or former students.
AE: So far, those who have recently graduated from college have had a decrease in the off-ramp time, the time between graduating college and the time where you have to start making payments for your student loans. For me, I graduated in May 2023, and I had to start making payments in November 2023. Personally, I have recently had a run-in with what can happen if you miss student loan payments.
My parents were the people making payments for my student loans since it started back in November 2023. They had stopped making payments without my knowledge, the loan provider switched without my knowledge, since the provider has no legal reason to contact you to inform you what has occurred. I was only made aware when I noticed, about two months ago, that my credit score had dropped almost 300 points.
This was gut-wrenching because there is no way to easily reverse this in the short term. I couldn’t explain to the credit company that it was my parents who didn’t pay because the loans are in my name. I did the responsible thing afterwards. I called the loan provider to place my student loans on forbearance. Loan forbearance is an interim period of time where you are not responsible for making loan payments. The maximum amount of time you can have forbearance is three years. I am currently in my first year now.
I wanted to call attention to this because so many young people need to understand just how much this debt can ruin your ability to move through life. For example, my friends and I are looking for a new place to rent, with my credit being affected by my loans. It now means I can’t be on any primary lease, as most reputable places wouldn’t rent to someone with my current credit score.
CB: The loans are obviously affecting the money I have to be able to afford basic necessities like food, clothing, rent, and to cover emergencies. They are also a slight detriment to my mental health. As I said in my previous answer, all of the different log-in portals and loans and emails are confusing and do not give good updates or a clear way to interpret everything going on. Also, the stress of paying my loans and rent keeps very little money in my pocket and destroys my ability to put money away for savings.
Luckily, I am not marked for collections on my loans like many other people paying loans off, but just the threat of being on the receiving end of state harassment over my loans feels terrible, and I stand in solidarity with those who are going through that and worse right now.
What would you like to see happen?
JC: Nothing less than a total reversal of all policies and executive orders regarding student debt, going all the way back to the 1970s when Ronald Reagan notoriously proclaimed that “free college would create a dangerous, educated proletariat,” that have led us to this exact point. No more student debt, and free, accessible college for all! No human should be a “loan” to an occupier on stolen land, the same way that no human can be “illegal” on stolen land.
Biden had the opportunity at any time during his presidency to invoke the Higher Education Act of 1965, that would’ve forgiven student debt, the same way the government was swiftly able to forgive hundreds of thousands of dollars on average worth of PPP loans for the parasite class. But, in typical Democratic Party fashion, he simply paved the way for Trump and his fascist administration to further strip away our rights to an education, while simultaneously placing the blame on us, barely surviving working-class people, for not voting for his genocidal prosecutor-in-crime, Kamala Harris, as next president.
We cannot continue relying on this system – a system that is working exactly as it was designed – to simply fix and reform itself. This total reversal must be accomplished by all working-class people of this country, united and ready to fight back, by any means necessary.
AE: I would like to see the elimination of all student debt that people currently have, and for all higher education of public universities to be free for students. People need to understand that the majority of jobs in the U.S. that pay near a living wage require you to now have a master’s degree. This means one to five years of post-undergraduate education. The average master’s degree two-year program can cost $36,000-93,000. This is on top of what a student would already owe for undergrad. As a person who only holds a master’s degree, I am finding it nearly impossible to find a job, even with experience and a degree that will pay me something worth coming into the office for.
CB: I would like to see loan forgiveness nationwide happen. Whether it be full loan forgiveness or half the total forgiven, any amount to alleviate the stress on both my wallet and mental health would be amazing. With any form of loan forgiveness or erasure, people, including myself, could put that newly opened up money into developing ourselves better for the future instead of being burdened and shackled to the past.
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