Trump is killing the repayment plan that kept seven million borrowers’ payments manageable — and the replacements cost more.
Arianne Lovelace, 43, lives in Midlothian, Texas, with her husband and four children. She has been making student-loan payments for nearly fifteen years. Her monthly payment just went from four hundred dollars to fourteen hundred dollars when she switched out of the SAVE plan. Her balance is $124,000, which is more than she originally borrowed, because the interest charges have been compounding while she paid. She had to tell her four-year-old daughter to choose one extracurricular activity instead of three. That’s the line item that doesn’t show up in the press release.
The SAVE plan was the most affordable option the federal government ever built for borrowers. It calculated payments based on income and family size. In some cases, monthly payments dropped to zero. It was the closest thing the government has ever built to the principle that a loan repayment system should not crush the people it was supposed to help. Then a coalition of Republican-led states sued. A federal appeals court ordered the plan ended. The administration began warning borrowers to switch. Now the numbers are in: nearly a million have already left. The ones who don’t switch will be automatically moved to the Tiered Standard plan, which costs more. The government built a plan that worked, and then the government killed it.
Sara Goldrick-Rab at Temple has been documenting the gap between what the government promises and what it delivers for years. When the Pell Grant was created in 1972, it covered roughly eighty percent of the cost of attending a four-year public university. Today it covers twenty-five to thirty percent. That is the generational shift in one number. The SAVE plan was supposed to close the distance. It did not close it. It made the payments survivable. Now even that is gone.
When Taylor Swift wrote “You’re On Your Own, Kid,” she was not writing about student loans. She was writing about the moment when the people you trusted to catch you stop catching you. Seven million borrowers were told SAVE was the plan — the affordable one, the one that would hold. Then it was gone. The title line is the cleanest single sentence for what that feels like. You’re on your own, kid. That is what the Department of Education is telling borrowers. The payments are rising. The interest is still compounding. The number is still bigger than what you borrowed.
The Catholic Social Teaching tradition has a word for this. Rerum Novarum — the encyclical Leo XIII wrote to the workers of the world — says that to exercise pressure upon the indigent and the destitute for the sake of gain is condemned by all laws, human and divine. Compound interest on a student loan is not gouging in the original Latin sense. But when a government takes the most affordable plan away and moves half a million borrowers into plans where payments jump from four hundred to fourteen hundred dollars, and the balance still grows, the machinery is doing the work Leo meant. A real pro-family policy would look different: the expanded Child Tax Credit lifted nearly four million children out of poverty annually, and universal childcare would save families five to six thousand dollars a year in thirty-two states. I sat at my kitchen table at eleven at night doing the math Lovelace is doing. The payment tripled. The balance is still compounding. The kids still need the extracurriculars. The vacation is already off the table. Under Secretary of Education Nicholas Kent told the Wall Street Journal that borrowers should not count on sweeping debt forgiveness. You’re on your own, kid. The math is still the math.