By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Pew PatriotsPew PatriotsPew Patriots
Notification Show More
Font ResizerAa
  • Home
  • News
  • Tactical
  • Guns and Gear
  • Prepping & Survival
  • Videos
Reading: Trump privatizing student loan system would spur higher-ed reform, lower costs: expert
Share
Font ResizerAa
Pew PatriotsPew Patriots
  • News
  • Tactical
  • Guns and Gear
  • Prepping & Survival
  • Videos
Search
  • Home
  • News
  • Tactical
  • Guns and Gear
  • Prepping & Survival
  • Videos
Have an existing account? Sign In
Follow US
Trump privatizing student loan system would spur higher-ed reform, lower costs: expert
News

Trump privatizing student loan system would spur higher-ed reform, lower costs: expert

Jimmie Dempsey
Last updated: March 31, 2025 1:29 pm
Jimmie Dempsey Published March 31, 2025
Share
SHARE

Join Fox News for access to this content

Plus special access to select articles and other premium content with your account – free of charge.

By entering your email and pushing continue, you are agreeing to Fox News’ Terms of Use and Privacy Policy, which includes our Notice of Financial Incentive.

Please enter a valid email address.

Having trouble? Click here.

Since its establishment in 1979, the U.S. Department of Education (DOE) has shaped federal student loan policies, which have, in turn, influenced the rising cost of an education and the loans to pay for it. As President Donald Trump moves to significantly downsize, and eventually shutter, the DOE, one expert says a completely private loan system would work better than shifting administration to other government agencies.

“The Clinton administration introduced the direct loan program, so this was kind of the competitor to the quasi public-private system, where now the government was going to be the one issuing the loans, and both systems kind of coexisted for a couple years, until 2010, when we got Obamacare, and that basically used some of the paper profits from switching all the loans to government loans to help pay for Obamacare,” Cato Institute expert Andrew Gillen told Fox News Digital in an interview. 

“And so, ever since 2010, we’ve been in the government-lending exclusively area,” he added.

CALIFORNIA UNDER INVESTIGATION BY TRUMP ADMIN FOR ALLEGEDLY HIDING ‘GENDER IDENTITY’ OF KIDS

Initially, after Trump signed an executive order in March dismantling the DOE, the administration proposed transferring the $1.6 trillion student loan portfolio to the Small Business Administration (SBA). However, recent developments indicate that the Treasury Department may assume responsibility for federal student loans. 

The Trump administration is also proposing to transfer Pell Grants and Title I funding to other federal agencies, effectively reducing the department’s role in overseeing major educational programs.

“If we just transfer student loans to the Treasury and don’t change anything else about the system, I don’t think this would have any real impact,” Gillen said. “So, all of these loan terms are already set by Congress, and so simply changing the administrative home of who oversees the paperwork in the background, that’s not going to have any impact.”

The current system encourages “bad investments” by funding students or education without a realistic expectation of repayment, Gillen said. Instead, private lenders, who prioritize repayment risk, would likely avoid financing such loans. He suggested that moving to a private system would provide better incentives for both colleges and students, as universities would face pressure to produce students who can repay their loans, and students would be more likely to choose fields that lead to successful careers.

NEWSOM’S ‘UNFAIR’ REMARK ON GIRLS’ SPORTS BELIES RECORD AS GOVERNOR: ‘ABSOLUTE BULLS—‘

closeup shot on Linda McMahon

The government has made it difficult to discharge student loans through bankruptcy, Gillen added, with only a few exceptions, but this rule doesn’t apply to private lenders. 

“There are a couple of things we can do to encourage private lenders to basically be willing to make those loans. So, one is clarifying how bankruptcy law works with these income-driven loans,” he said. 

Some lawmakers have made efforts to address this issue. Democratic Reps. Steve Cohen, Danny K. Davis, and Eric Swalwell reintroduced the Private Student Loan Bankruptcy Fairness Act, seeking to make private student loans dischargeable in bankruptcy, similar to other types of consumer debt.

STUDENT LOANS, PELL GRANTS WILL CONTINUE DESPITE EDUCATION DEPARTMENT DOWNSIZING, EXPERT SAYS

Linda McMahon with others at signing ceremony in East Room of the White House

Currently, the government can garnish wages without needing to go through a lawsuit, making the process more efficient and less costly, which would be beneficial for private lenders as well.

The 1990s saw the introduction of income-driven repayment plans, starting with the Income-Contingent Repayment (ICR) plan in 1994 under former President Bill Clinton. These plans allowed borrowers to repay loans based on their income, extending the loan term and increasing the total interest paid. While they provided immediate financial relief, they also led to higher long-term costs for some borrowers.

By fiscal year 2024, the DOE held approximately $1.6 trillion in student loan debt, issuing $85.7 billion in new loans, with $45.3 billion allocated for undergraduate education and $40.4 billion for graduate education.

Read the full article here

You Might Also Like

Dem senator’s ‘lies and stupidity’ at Hegseth hearing roasted on social media: ‘Clown show’

Trial date set for Brian Walshe, accused of murdering missing real estate executive wife

Orbiter photos show lunar modules from first 2 moon landings more than 50 years later

Sen. Tim Scott outlines first 100 days of Congress, crypto, tariffs

Shohei Ohtani announces birth of first child: ‘Super anxious parents’

Share This Article
Facebook Twitter Email Print
Leave a Comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

We Recommend
Homemade vs. processed foods: Study challenges what we think is healthier
News

Homemade vs. processed foods: Study challenges what we think is healthier

Jimmie Dempsey Jimmie Dempsey May 24, 2025
From battlefield injury to suicide prevention: How a wounded soldier is helping save fellow veterans’ lives
Diddy key witnesses could hurt prosecution’s case despite explosive testimony: expert
Jake Tapper calls out Trump, says he ‘has not been transparent about his health records’
Knicks fall behind 0-2 in Eastern Conference finals series vs. Pacers
Convicted rapist on parole charged with attempted murder after brutal attack leaves NYC mother in coma
Viktor Krum actor from ‘Harry Potter’ undergoes surgery after losing ability to breathe
News

Viktor Krum actor from ‘Harry Potter’ undergoes surgery after losing ability to breathe

Jimmie Dempsey Jimmie Dempsey May 24, 2025
New Orleans police make another arrest in ongoing jail escape investigation
News

New Orleans police make another arrest in ongoing jail escape investigation

Jimmie Dempsey Jimmie Dempsey May 24, 2025
Satellite images reveal North Korea’s mangled naval destroyer after failed launch
News

Satellite images reveal North Korea’s mangled naval destroyer after failed launch

Jimmie Dempsey Jimmie Dempsey May 24, 2025
Pew Patriots
  • News
  • Tactical
  • Prepping & Survival
  • Videos
  • Guns and Gear
2024 © Pew Patriots. All Rights Reserved.
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?