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Millions of US student loan borrowers are facing renewed collections — including wage garnishments and tax refund seizures — after the Trump administration reversed pandemic-era protections, with nearly one in four borrowers currently behind on payments. Economists warn that this shift, combined with broader financial pressures, could reduce consumer spending and further slow economic growth.
Essential Question: How do changes in student loan repayment policies affect individual financial stability and broader economic conditions in the US?
Read the FT article and then answer the questions below.
Millions face collections on student loans after Trump policy shift
Reading Questions:
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According to the New York Fed and Equifax, what proportion of borrowers were behind on student loans in early 2025?
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What methods has the government said it will use to collect on defaulted student loans?
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How much total student debt is owed by Americans?
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What spending behaviour did JPMorgan observe in states with high student loan delinquency?
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Why does a reduction in consumer spending matter for the overall economy?
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What policy did the Department of Education implement during Covid-19 to help borrowers?
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What percentage of student loans were over 90 days delinquent in early 2025?
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What change did Trump’s executive order make to the Public Sector Loan Forgiveness Program?
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How might rising student loan delinquencies impact young adults’ ability to achieve common financial goals such as buying a home, starting a business, or saving for retirement?
Joel Miller and James Redelsheimer, Foundation for Economic Education.
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