A late Friday press release revealed that Joe Biden-style student loan deferrals were back on the menu.
Maybe the Trump administration’s Department of Education (DOE) thought no one would take much notice of a late Friday press release revealing that Joe Biden–style student loan deferrals were back on the menu.
In the document, the DOE announced that it would “delay the implementation of involuntary collections on federal student loans,” deferring wage garnishments and pausing the “Treasury Offset Program.” In addition, the DOE will work with the Treasury Department to suspend tax refund seizures from delinquent borrowers.
It was only last May that the Trump administration resumed student loan debt collections. There were no signals at the time that distressed borrowers would have any recourse but to resume payments on their debts. This new pause is ostensibly designed to give the administration time to implement provisions in the legislation formally known as the “One Big Beautiful Bill Act,” which the president signed into law last July. The DOE maintains that the temporary pause in collections will end on July 1 of this year, giving borrowers new options to resume repayments.
“These reforms, which include simplifying repayment options and providing an additional opportunity for borrowers to rehabilitate their federal student loans, reflect the Trump Administration’s commitment to provide better support for current and future borrowers in repayment,” the DOE said for itself. “The delay in collections will give defaulted borrowers additional time to begin the rehabilitation process, including the ability to rehabilitate their loan a second time.”
The maneuver earned the Trump administration some rare praise from political media and the activist class. The pause “gives breathing room to millions of Americans who have struggled to pay back their loans,” ABC News reported. But not everyone is thrilled with the initiative.
In its own statement, the Committee for a Responsible Federal Budget called the deferment an “incoherent political giveaway” that was “beyond ridiculous.” The think tank estimates that the Trump administration is leaving up to $5 billion in tax revenue on the table, and the pause will invariably contribute to higher loan balances as interest accrues.
“We’re not in a pandemic or financial crisis or deep recession,” said CRFB president Maya MacGuineas. “There’s no justification for emergency action on student debt, and no good reason for the President to back down on efforts to actually begin collecting debt payments again.”
Nor are objections to the Trump administration’s initiative limited to right-wingers. Aissa Canchola Bañez, the policy director at the nonprofit Protect Borrowers (which safeguards consumers against “corrupt corporations”), called the Department of Education’s plan “economically reckless.” It will push “nearly 9 million defaulted borrowers even further into debt.”
During the 2024 campaign, Trump called Biden’s student loan forgiveness and deferral initiatives “vile.” At the time, Trump’s Education secretary, Linda McMahon, co-chaired the America First Policy Institute, which deemed Biden’s loan policies “unlawful, counterproductive, and deeply unfair.”
Those statements seemed to be in keeping with the national mood. In June of last year, an Associated Press/University of Chicago poll found that fewer than 40 percent of American adults said it was “extremely” or “very important” to provide student loan borrowers with debt relief — a figure that included fewer than 60 percent of self-described Democrats. Just 30 percent of respondents said they approved of the Biden administration’s handling of student loans.
“The American people re-elected President Trump by a resounding margin, giving him a mandate to implement the promises he made on the campaign trail,” now-White House Press Secretary Karoline Leavitt said during the transition period. “He will deliver.” She just didn’t say when.