Education Department’s Demise Would Hit Black Student Borrowers Hardest

Not only do Black borrowers owe a disproportionate amount of the national student loan debt, but compared with their white counterparts, they also are more likely to struggle to pay back their loans.

Roughly 44 million Americans have student loan debt. Many are worried about what President Donald Trump’s assault on the U.S. Department of Education, which oversees a $1.7 trillion portfolio of student loans, might mean for their livelihoods.

Weeks into Trump’s return to the White House, the country’s education landscape is engulfed in turmoil. Under Trump, the Department of Education has directed schools to stop race-conscious practices by the end of February or lose funding, while a federal judge has temporarily blocked the department from sharing sensitive data — including student loan information — with the so-called “Department of Government Efficiency.”

Additionally, the department has shut down the online portal for applying for income-driven repayment (IDR) plans and the loan consolidation process due to the ongoing litigation.

Trump ultimately wants to shut down the department that’s supposed to determine how the federal government’s education budget is spent, how student achievement is assessed, and how federal regulations of civil rights protections for students are interpreted.

Ivory Toldson, a professor of counseling psychology at Howard University, has long been concerned about the higher education marketplace, which he argues incentivizes students to prioritize a college’s reputation over its cost, a tendency that can plunge them into extraordinary student loan debt.

But the administration, he continued, appears to be more interested in destabilizing this marketplace, not improving it or helping students to navigate it.

“A lot of what Trump is doing is regressive. It’s not consistent with what students or schools need,” Toldson, who previously served as the director of education for the NAACP, told Capital B.

As the overhaul of the federal government barrels ahead, here’s what borrowers need to know about the administration’s efforts to eliminate the agency that manages their loans — and the steps they can take to prepare for any upcoming hurdles.

This story will be updated as the litigation proceeds.

Can Trump dismantle the Department of Education?

On the campaign trail, Trump frequently railed against the department, claiming that it was run by “radicals, zealots, and Marxists” and promising to send it into oblivion.

But it’s uncertain how he would do that. Closing a federal agency requires an act of Congress, and such legislation isn’t likely to get the 60 votes necessary to overcome a filibuster in the U.S. Senate — where Republicans hold 53 seats — and advance to a final vote.

Still, the administration’s assault on the department, which Congress created in 1979, has generated alarm among its employees, both past and present.

Under the Obama administration, Tyra Mariani, the founder and principal of the consulting firm UP Advisors LLC, was appointed chief of staff to the U.S. deputy secretary of education and deputy chief of staff to the U.S. secretary of education, helping to shape priorities across different levels of schooling.

She previously told Capital B that it’s “extremely heartbreaking” to watch Trump and Elon Musk attack an agency designed to ensure that every young person, especially those from Black communities, has access to a quality education.

“It’s hard,” Mariani said. “You’re looking at your communities, and you know that Black and brown communities will be most affected by all of this undoing.”

What actions might the administration take?

While shutting down the department would prove to be an uphill battle, Trump can still dramatically restructure the department and use it to carry out his agenda. In fact, we’ve already seen the administration take steps in this direction.

For instance, under Trump’s influence, the department has announced that it plans to “reassess” and potentially restrict borrower-defense regulations. Introduced in 1995, these regulations have allowed borrowers who have been defrauded or intentionally misled by their schools to be released from their student loan debt.

When Joe Biden was in the White House, he forgave around $30 billion in debt for 1.7 million borrowers under the Borrower Defense to Repayment program. This was a boon to the Black students, who are disproportionately targeted by for-profit and predatory institutions.

Additionally, layoffs have upended the department, as they have large swaths of the federal government, and the Trump administration has ramped up its war on racial equality by giving universities an ultimatum: axe diversity initiatives, or lose federal dollars.

“The term ‘DEI’ stands for ‘diversity, equity, and inclusion,’” Toldson said. “If you’re against diversity, that means you want white spaces. If you’re against equity, that means you want inequitable spaces. And if you’re against inclusion, that means you want to exclude.”

He surmised that if Black students feel less protected at predominantly white institutions, they might start to look for more welcoming environments, including historically Black colleges and universities, which tend to be cheaper tuition-wise.

What might happen to income-driven repayment plans?

Several IDR plans have been introduced under a number of different administrations.

Both the Pay As You Earn (PAYE) plan and the Revised Pay As You Earn (REPAYE) plan were created under President Barack Obama. The Income-Based Repayment (IBR) plan came about during the President George W. Bush era. And the Income-Contingent Repayment (ICR) plan was established under President Bill Clinton.

The Saving on a Valuable Education (SAVE) plan, which lowered monthly payments for millions of borrowers. The administration wants to eliminate the agency that oversees a $1.7 trillion portfolio of student loans and speed up the pace of loan forgiveness for many others, replaced REPAYE, and it was Biden’s contribution to the student loan landscape.

But the current outlook is challenging, Stanley Tate, an attorney specializing in student loan law, told Capital B. A U.S. appeals court has blocked Biden’s more generous SAVE plan, and this outcome will likely result in higher monthly payments for borrowers at a time when Black borrowers still struggle with repayments more than their white counterparts.

Because of this injunction, IDR and loan consolidation applications are currently unavailable, according to the department website.

There’s a silver lining, however.

“IBR was established by a congressional act,” Tate said, “and as a result, it’s likely to remain stable unless explicitly overturned by Congress — a scenario I don’t see as probable.”

How can borrowers make decisions that protect their credit?

While some observers suggest that borrowers document everything — for instance, grab screenshots of their Public Service Loan forgiveness credits — others aren’t entirely convinced that taking such steps will address all the obstacles that might come from the administration.

The reality is that borrowers could face significant challenges when it comes to repayment and forgiveness programs, especially given that the department has paused IDR and loan consolidation applications.

“What this means for borrowers is they now need to submit paper applications to their servicers. Based on what I’m seeing, servicers are still accepting paper applications, but there’s uncertainty about whether IDR processing is continuing normally,” Tate said. “I can tell you from experience that I have clients whose IDR applications are still being processed, including those switching from SAVE to IBR or other plans.”

It’s unclear whether this applies only to applications already received before the shutdown, or if new paper applications will also be processed.

Borrowers must make strategic decisions based on their individual circumstances, Tate explained.

For some, this might mean sticking with their current plan and waiting to see how SAVE litigation plays out. Others, particularly those who are closer to securing loan forgiveness or those who prefer certainty, might benefit from switching to the IBR plan if possible. There are still others who might choose to exit the federal loan system entirely by paying off their loans.

“What I strongly caution against is the notion of simply abandoning payments altogether,” Tate explained. “The Department of Education has extraordinary collection powers that can make this strategy extremely costly in the long run. It can garnish wages, seize tax refunds, and take Social Security benefits — all without obtaining a court order. These collection tools are far more powerful than what private creditors have at their disposal.”

Failing to pay loans, or paying them late, also can hurt borrowers’ credit scores.

The key, Tate added, is making informed decisions based on your current situation while also staying prepared for potential changes in the system.

Is this the first move to eliminate the department?

Trump’s attempts to shutter the department might be the most significant in recent years, but he’s hardly the first Republican leader to act on this antipathy.

Ronald Reagan was determined to extinguish the department when he entered the White House in 1981, at the height of an era marked by attacks on the Civil Rights Movement and other liberation struggles.

“The budget plan I submit to you on Feb. 8 will realize major savings by dismantling the Department of Education,” he said in his 1982 State of the Union address.

But Reagan ran into opposition from Democrats in Congress. Eventually, he abandoned his plans for the department.

“I have no intention of recommending the abolition of the department to the Congress at this time,” he said in a 1985 letter to Republican Sen. Orrin G. Hatch of Utah.

“I have previously recommended the abolition of the Department of Education,” Reagan explained. “This was because I believed that federal educational programs could be administered effectively without a Cabinet-level agency. While I still feel that this is the best approach, that proposal has received very little support in the Congress.”

To avoid some of the policy challenges Reagan faced, Bush, years later, decided not to eradicate the department. Instead, he opted to demand more from educators, signing into law the No Child Left Behind Act, intended to overhaul schools that were considered to be “failing,” according to standardized test scores.

Trump’s efforts not only continue Reagan’s agenda but accelerate it, with potentially detrimental consequences for Black communities.

“I think that the house of cards is going to fall,” said Toldson, the Howard professor, referring to the instability the administration is injecting into the education landscape. “It’s just a matter of when and where.”