Nikki McCann Ramirez
View all posts by Nikki McCann Ramirez October 19, 2026 Add us as a Google Preferred Source
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Donald Trump and Secretary of Education Linda McMahon at the White House on Aug. 24 Win McNamee/Getty Images While Donald Trump’s administration has largely neutered the Department of Education, the agency is still doing what it can to extract even more money from financially encumbered young people.
According to a Monday report from The Washington Sun, the Trump administration is preparing to roll out — after the midterms, of course — new policies aimed at penalizing nearly 10 million student loan recipients who have defaulted on their payments. The plan includes proposals to hire debt collectors and garnish the wages and benefits of borrowers.
The plans revive past efforts by the administration to target student loan borrowers, who have seen a steady increase in defaults amid persistent inflation, stagnated wage growth, and a general cost of living crisis two years into Trump’s second term. Previous attempts by the administration to target student loan borrowers had been quietly shot down as the Treasury and Department of Education debated who would manage the national student debt.
Sources told The Washington Sun that the plan is set to roll out after the midterms. Naturally, announcing that the federal government plans to target largely low-income borrowers shortly before an election, as Republicans are getting pummeled over increased prices, was seen as a bad idea.
The plan is part of a larger effort to limit what types of students have access to federal student loans in the first place. Last week, the administration announced that it will seek to limit students pursuing low-income degrees from borrowing federal funds. The new Student Tuition and Transparency System (STATS) holds that “undergraduate programs will be required to demonstrate that their graduates earn more than the typical high school diploma holder, and graduate programs will be required to demonstrate that their graduates earn more than the typical bachelor’s degree holder.”
Otherwise, enrolled students would not be eligible for federal loan programs.
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Experts warn that the new restrictions could severely impact careers in social and civil services, as well as the arts. Over the weekend, a former judge in the Bankruptcy Court for the District of Arizona said in an interview with CNBC that the changes the Trump administration has already made to the federal borrowing system — including creating unrealistic federal loan caps for students under the 2025 reconciliation bill — will “most likely increase” the rate of bankruptcy filings.
“Once the Education Department was gutted in 2025, there were few, if any, employees who could approve the debt modifications through one of the offered programs,” the judge added. “As a result, it has become harder to reach a settlement with the Department of Education,” on outstanding debt.
Under Secretary of Education Linda McMahon — the estranged wife of World Wrestling Entertainment founder Vince McMahon — who has no background in education, the department has cut roughly half of its workforce. The majority of those positions were within its student-aid division and the offices of civil rights enforcement. The latter oversaw investigations into allegations of discrimination against students and educators, particularly people of color, women, and other minorities. The cuts stopped investigation in their tracks as the administration pivoted resources toward enforcement action against supposed discrimination against white students and educators.
