This back-to-school season, the Trump administration is sending young Americans and their families off to campus with higher costs and fewer ways to pay for it. From the first loan application to the last payment years down the road, the administration has spent 2026 tightening the screws on borrowers at every turn.
Brand new borrowing caps, program eliminations, and more loan changes are raising the cost of tuition for working-class students today and pushing monthly bills higher for borrowers already years into repayment, while enforcement tools like wage garnishment have already resumed once and remain on the table.
“Trump has failed parents and students by making it more expensive to go to school and pricier to pursue entire fields of study, and he’s failed borrowers out of school who are just trying to pay off their loans and live their lives,” said American Bridge 21st Century spokesperson Brandon Weathersby. “For the next month, parents around the country will be helping haul boxes into dorm rooms, and this administration is standing at the door with new caps, new penalties, and a mountain of fine print designed to keep their children drowning in debt for years to come. The nurses, teachers, and first-generation students who needed a fair shot are getting a shrinking safety net and a bill that keeps growing instead.”
How the Trump administration made earning a degree more expensive:
- Grad PLUS loans are gone for new borrowers. Graduate student loans are now capped at $20,500 a year and $100,000 total, while professional students face a $50,000 annual and $200,000 lifetime limit, forcing many to turn to private lenders who offer far fewer protections.
- Parent PLUS loans are capped for the first time ever, at $20,000 a year and $65,000 per child, leaving many families with a funding gap they will need to close through private debt.
- Married borrowers are getting hit with a steeper marriage penalty. Because the new Repayment Assistance Plan bases payments on adjusted gross income rather than shielding a portion of income for living costs like other income-driven plans do, combining spouses’ incomes on a joint tax return can push a borrower into a much higher payment bracket. Thus penalizing married student loan borrowers for filing their income taxes jointly.
- Wage garnishment for defaulted borrowers has already begun once and could return. The administration resumed involuntary collections in early 2026 before pausing again, leaving millions of borrowers in limbo over whether their paychecks will be docked.
- Forgiven debt could now come with a tax bill. A pandemic-era tax exemption for cancelled student loans expired at the end of 2025 and was not extended, meaning borrowers who reach forgiveness this year could owe the IRS taxes they were told would be wiped away.
- The SAVE plan is dead, but the accrued interest on loans is still alive. Roughly 7 million borrowers sat in forbearance while their loans quietly accrued interest starting in August 2025, adding to their balances even though they were not required to make a payment.
- Public Service Loan Forgiveness is under direct attack, and future attacks may be around the corner. The administration finalized a rule that would have blocked forgiveness for borrowers working at nonprofits it disagreed with politically, before two federal judges struck it down following a lawsuit from more than a dozen state attorneys general. The fight is not over, and the administration has not said whether it will appeal.
Published: Aug 10, 2026