Federal student loan borrowers now face a major shift under President Donald Trump’s latest legislative victory. Tucked into a $3.3 trillion budget reconciliation bill, the new law reshapes repayment options, sets borrowing caps, and ends several Obama- and Biden-era loan programs.
The U.S. Department of Education announced it will resume involuntary collections on defaulted federal student loans starting May 5, 2025, ending a pause initiated during the COVID-19 pandemic in March 2020.
Sen. Tom Cotton (R-AR) introduced legislation on Tuesday targeting elite universities and student protestors with two new bills. The Woke Endowment Security Tax (WEST) Act would impose a six-percent excise tax on the endowments of 11 major universities, using the revenue to reduce the national debt and strengthen border security. Additionally, the No Student Loans for Campus Criminals Act would strip federal student loan eligibility from any campus protestor convicted of a crime.
