Trump resumes collections on student loans.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Today’s read: 15 minutes.

Israel, Zionism, and me.

As the war in Gaza passes the 20-month mark, Executive Editor Isaac Saul has been reflecting on how his views on Israel — and his identity as a Zionist — have changed since Hamas’s October 7 attack. In tomorrow’s Friday edition, Isaac is tackling the claim that Israel is committing genocide in Gaza and exploring how the war has fundamentally shifted his beliefs about the conflict. It’s a deeply personal piece that Isaac has been developing over the past few months, and we’re looking forward to your thoughts, feedback, and criticism. 

Quick hits.

1. The U.S. Court of International Trade ruled that President Donald Trump does not have the authority to impose global tariffs under economic emergency legislation. The decision blocks all tariffs imposed by Trump under the International Emergency Economic Powers Act. (The ruling)
2. A White House official said on Wednesday Elon Musk would leave his position in the Trump administration, with his offboarding process beginning that same night. (The departure) Separately, Musk said he was “disappointed” by the Trump-supported “big beautiful bill” passed by the House, suggesting that its impact on the federal deficit undermined his work with the Department of Government Efficiency. (The comments)
3. Secretary of State Marco Rubio announced the U.S. will begin revoking visas from Chinese exchange students, specifically calling out “those with connections to the Chinese Communist Party or studying in critical fields.” (The announcement)
4. President Trump issued a series of pardons, including reality TV stars Todd and Julie Chrisley, who were convicted of fraud and tax evasion; rapper NBA YoungBoy, who pleaded guilty to a federal gun charge; and former Rep. Michael Grimm (R-NY), who was convicted of tax fraud. (The pardons)
5. President Trump announced he will nominate Emil Bove, a Justice Department official and one of his former personal attorneys, to the U.S. Court of Appeals for the 3rd Circuit. (The nomination)

Today’s topic.

The resumption of student debt collections. On May 5, the federal government began collecting on its defaulted student loan portfolio for the first time since March 2020 for approximately five million borrowers in default. As part of its collection efforts, the Trump administration says it will garnish wages, tax refunds, and federal benefits of defaulted student loan borrowers. After collections resumed, approximately 2.2 million had their credit scores drop by 100 points or more, potentially impacting their ability to secure housing, insurance, car loans, and employment.

Back up: President Donald Trump initially suspended student loan repayments for two months in March 2020, at the beginning of the pandemic, later extending the pause through the end of the year. President Biden maintained that freeze until October 2023, while pursuing a robust agenda of student loan forgiveness (some of which succeeded, some of which the courts struck down). When collections resumed, the Biden administration did not penalize borrowers for falling behind in the first year of continued repayments. 

We covered the debate over student debt during Biden’s term here.

On April 21, the Department of Education (ED) said the resumption of collections would protect “taxpayers from shouldering the cost of federal student loans that borrowers willingly undertook to finance their postsecondary education,” adding, “this initiative will be paired with a comprehensive communications and outreach campaign to ensure borrowers understand how to return to repayment or get out of default.” 

Education Secretary Linda McMahon also criticized the Biden administration’s handling of the issue, saying, “The executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear.”

ED restarted collection by notifying roughly 195,000 student loan borrowers in default that their federal benefits (including Social Security retirement checks) would be subject to garnishment in 30 days. Furthermore, the Treasury Department said it will send notices to 5.3 million defaulted borrowers about the possible collection of their wages later this summer. 

The Trump administration is also pursuing several other changes to its management of the federal student loan program. In early May, ED put out a notice that it would halt future loans to students at schools if more than 30% of that school’s recent students had defaulted over the past three years, or if 40% had defaulted in the most recent year. Furthermore, the version of President Trump’s “Big Beautiful Bill” spending package passed by the House includes provisions that would change the formula for how much the federal government grants borrowers, place new caps on individual student loan amounts, and eliminate many repayment plans. 

Today, we’ll share arguments from the right and left about the resumption of collections on student loans. Then, Managing Editor Ari Weitzman will give his take.

What the right is saying.

• The right strongly supports the Trump administration’s handling of repayments, suggesting Biden’s policies hurt both borrowers and taxpayers.
• Some say the move is a necessary step to return to pre-Covid policies.
• Others say colleges must play a leading role in helping their former students in default.

The Dallas Morning News editorial board said “it’s time to repay student loans.”

“The federal student loan program has distorted the cost and benefit of higher education in ways that need to be better understood. As initially conceived, subsidized loan programs were a good way to provide gap financing for students who couldn’t otherwise afford the cost of a college education,” the board wrote. “But borrowing rules that were especially generous for graduate programs saw universities increasingly pull students into high-cost programs that led to massive debt loads. This happened even as the cost of a college degree, both undergraduate and graduate, spiraled well beyond inflation.

“The relationship between the availability of massive student loans and the rising cost of an education seems more causal than corollary, and that has saddled too many young people with too much debt. And too often that debt doesn’t result in a degree that will lead to a job with the salary to keep up with payments while having enough left over for everyday life,” the board said. “The Biden administration’s approach — to just forget about the debt altogether — did nothing to address the underlying distortions that the student loan program has created in higher education.”

In The Washington Post, Ramesh Ponnuru wrote “Trump is right: Those student loans need to be repaid.”

“Covid is over. It’s no longer a mass social phenomenon that can justify emergency measures. We’ve acted on that logic in almost every area of American life. It’s time that the covid era ends for student loans, too. That’s what the Trump administration is doing by resuming efforts to collect from delinquent borrowers,” Ponnuru said. “That’s a necessary but insufficient step toward getting borrowers back in the habit of making payments. That habit broke down during the past five years, as the federal government paused loan repayments and then extended the pause.”

“Forgiving much or all of the debt, an idea popular among progressives and the borrowers themselves, is an alternative to reviving loan payments. But the extended pause on student loans has already cost taxpayers more than $238 billion. That number would rise even more if the government forgave more of the debt,” Ponnuru wrote. “That’s not the only unfairness that loan forgiveness would involve. The more a borrower had sacrificed to pay down their debts, the less they would receive. Nor is there a clear-cut case for forgiving debts from college while leaving mortgages, car loans and small-business loans intact.”

For the American Enterprise Institute, Preston Cooper argued “colleges must help return student borrowers to repayment.”

“Everyone involved should want to avoid this looming tidal wave of student loan defaults. Borrowers who default see their wages garnished and their tax refunds seized, in addition to a black mark on their credit records. Taxpayers also lose out: the government typically recovers just 65 to 75 percent of defaulted student loan balances. But if student loan defaults go high enough, colleges could also face serious consequences,” Cooper said. “According to federal law, when a high proportion of former students default on their loans within three years of entering repayment, their school could lose access to Pell Grants and student loans going forward. For many schools reliant on federal aid, triggering this provision could be a death sentence.”

“Preventing defaults must be an all-hands-on-deck effort. The Trump administration has announced many positive steps to that end: a communications campaign, direct outreach to borrowers, and clearing the backlog of applications for Income-Driven Repayment,” Cooper wrote. “But colleges—which rake in tens of billions of dollars annually from student loans—have a responsibility too. It’s time for schools to uphold their obligations by reminding their alumni that the student loan payment pause is over.”

What the left is saying.

• The left is critical of the administration’s handling of loan collections, worrying that it will exacerbate millions of Americans’ financial struggles.
• Some question the decision to focus on student loans while eschewing other tax collection efforts.
• Others argue the administration is cracking down on student loans to justify its tax cut proposal. 

In The American Prospect, David Dayen said “student debtors are under attack on all sides.”

“Roughly 5.3 million student borrowers who haven’t paid for more than 360 days were thrown into collections on May 5, and government data shows that another 5.59 million could hit default status within six months,” Dayen wrote. “Given the availability of affordable options like income-driven repayment, the number of borrowers in default should really be zero. But the Trump administration’s actions aren’t helping. In response to a court order blocking the Biden administration’s generous income-driven repayment [IDR] plan in February, the Education Department pulled down applications for three other IDR plans and loan consolidation.”

“Millions of student borrowers can’t keep up with their loan payments now, but House Republicans’ solution is to price out the borrowers of the future… The Republican bill eliminates all but two repayment programs,” Dayen said. “Single debtors carrying the average amount of student debt as of the end of 2024 ($38,374) and the current 6.3 percent interest rate would owe $432 a month, and would pay close to $3,000 per year more than under the cheapest Biden-era plan, according to an analysis by the Student Borrower Protection Center. The alternative, an income-driven repayment plan, would last 30 years before the balance is extinguished, and offer little assistance to most borrowers unless they don’t earn much.”

In Bloomberg, Kathryn Anne Edwards suggested “the US chose the wrong crackdown.”

“Do 18-year-olds understand the financial risks they are taking on? Does tuition reflect the services provided? In short, is college still worth the investment? The conclusion is that none of this matters. The government is a lender, and if you borrow from it, you have to pay it back. This is simple, which is not the same thing as fair,” Edwards wrote. “Contrast the way the federal government treats those who have defaulted on their student loans with those who have cheated on their taxes. The Education Department is now withholding tax refunds and other federal payments for students who have defaulted on their loans, and will begin to garnish wages this summer. And what is the IRS doing about the so-called tax gap — the amount of money that should be collected in taxes but isn’t, which amounted to $606 billion in 2022?”

“Those who aren’t paying back their student loans and those who aren’t paying their taxes are similar in the broadest sense: Both are failing to pay what they owe. But they are far from equivalent. People who don’t make enough money to pay off a student loan are different from people who lie about their assets in order to reduce their taxes,” Edwards said. “So why is the federal government getting tough with the former while taking an increasingly lighter touch with the latter? The decision can’t be defended on economic grounds. It’s not more efficient. And it certainly can’t be justified on the basis of fairness.”

In MSNBC, Sarah Bundy wrote “I’m a 54-year-old student debtor. Trump is plunging people like me into financial pain.”

“After months of causing chaos at the Department of Education and sabotaging affordable loan repayment and relief plans, the White House is now plunging millions of working- and middle-class families — already scratching to make ends meet — into a new level of financial pain,” Bundy said. “As a 54-year-old student debtor who has struggled for years to make my loan payments, I have experienced decades of a broken student loan system… President Donald Trump is not protecting taxpayers, as the government claims. He is punishing the working poor to justify tax cuts that benefit billionaires.”

“Working-class families like mine need more relief — not higher bills and harsher consequences for missed payments. Instead, Trump is worsening consequences for struggling borrowers,” Bundy wrote. “Resuming loan garnishments will be a disaster for countless families. Like millions of others, I am currently in SAVE forbearance — the Biden administration’s update of long-standing repayment programs pegged to a borrower’s income. The Republicans want to replace SAVE with a new ‘Repayment Assistance Plan’ that is designed to bleed the working class or force borrowers into default.”

My take.

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• Student loans are unfair, student loan forgiveness is unfair, but these debts must be repaid.
• The way these repayments were restarted introduced a totally unnecessary hardship.
• I’m glad Trump is starting to pursue some reforms to the system he inherited, but he should also undo the problem he created.

Student loans are unfair. Some people have received more help than others and some have paid more than others, but at the end of the day everyone is responsible for their individual debts. At the same time, we don’t have to go out of our way to make it unfair. Millions of borrowers went into default or entered collections this month, and it just doesn’t have to be this way.

First, let me back up and re-tread some ground. When Isaac wrote about Biden’s student debt forgiveness plan a few years ago, he called out how many people opposing debt forgiveness griped over the plan’s unfairness — and I empathize with their point. Like Isaac and millions of Americans, I got student loans to pay for college, and I worked and saved to pay them off. I paid my own room and board by taking a job during my undergraduate years at UChicago, cramming with four friends into a three-bedroom, and was even able to take a quarter off to save on tuition. I graduated on time in 2009, right in the middle of the Great Recession, when loan forgiveness would have been an enormous help to me. Instead, the banks got bailed out to prevent a further economic crash.

I don’t bemoan any of that. Yes, some people getting loans forgiven while people like me paid them off is unfair. But “I had to go through something bad and so should everyone” isn’t a good enough argument to justify any policy, or oppose one.

Conversely, I’ve had enormous benefits that others didn’t. I was able to get a Pell Grant to reduce the cost of tuition and received federal loans with interest-free years upon graduation. I was also healthy and able to find work, which was not the case for many people. And when my interest-free years were up, in my largest privilege of all, my dad did me an enormous favor and bought my entire loan balance. He still required me to pay back the tens of thousands of dollars I now owed him, but his terms were reasonable: 0% interest, and a call and a card on his birthdays and Father’s Day (happy early birthday, dad).

People like me getting a leg up while others have had to struggle with crushing interest rates and insurmountable debt is also unfair; but those inequalities also aren’t enough reason in and of themselves to offer student loan forgiveness. After all, the government has its own debts to pay — the $1.6 trillion held by student loan debtors is too much money to simply cancel, even partially.

Let’s centralize the main issue: Trump decided to extend repayment pauses throughout his first term, Biden decided to do the same, and now Trump is resuming collection very poorly — the Department of Education gave inadequate notice to borrowers and put them in a position they didn’t have to be in. Roughly two million people just had their credit scores drop by over 100 points, which means their rates of borrowing are increasing and they’re being pushed into an avoidable hardship. 

If I have anything to criticize Trump for, it’s that. Of course, the government had to start recollecting these debts eventually (again: people have to repay their debts), and now is as good a time as any to do that — unemployment is low, inflation is relatively stable, and the government needs to increase its revenue. But Trump could have directed ED to give more clear communication about restarting payments, and it certainly didn’t have to consider debtors who missed their first bill in default. Instead, it’s another example of the administration pursuing a reasonable goal through unreasonable methods and creating totally avoidable problems.

However, Biden bears a large portion of responsibility for laying the groundwork for this problem by pursuing loan forgiveness and continual repayment pauses as a matter of federal policy. I think helping student loan debtors in some way was the right thing to do, but pausing these loans en masse while forgiving hundreds of thousands of loans had enormous consequences. It incentivized borrowers against paying off their loans (why pay debts that might just go away?), it may have contributed to the rising cost of tuition, and it was regressive: generally benefiting graduates who were well positioned to pay their loans back and shifting their burden to the rest of us. That’s to say nothing of the fact that many of Biden’s efforts were illegal and likely contributed to the crushing inflation that dominated his term.

To be clear, Biden had other options to pursue if he wanted to make good on his campaign promise to help student loan holders. He could have focused only on the most disadvantaged borrowers, or tried to lower the interest rates of these loans instead. I never understood why he decided to go so broad. I also don’t know why he didn’t simultaneously pursue reforms to the federal loan programs to make these debts less burdensome; instead, he left the fundamental problems unchanged. 

Fundamental aspects of student loans were unfair under Biden, and they remain unfair today. Again: Life’s not fair, but we don’t have to go out of our way to make it so. Although unpaid federally held loans aren’t inherited by the borrower’s children, many debts are bought or refinanced by private lenders are. The rates and low minimum payments promoted by these lenders are misleading at best and crippling at worst. In short, student loan markets are rife with abuse and illegal practices, and now we all know that missing just a few of these payments is as bad in the eyes of U.S. creditors as going into bankruptcy.

I’m glad that Trump is trying to institute some reforms to the student loan program, and limiting the students it grants loans to using the repayment records of others at that institution sounds like a good step. Easing the penalties for the missed payments for this cohort of affected borrowers would be an obvious next step, and expunging their default records and pausing collections temporarily while the government coordinates a better repayment process should be the next one. 

Over five million borrowers were put into collections. Millions more could default within six months. This is a major problem, and not just for those debtors. Bond yields are up, the Federal Reserve’s interest rate remains high, and while the job market is strong, other warning indicators are flashing on the economic dashboard. In this context, the ramifications on the greater economy of millions of people being unable to get loans or being hit with higher interest rates is no small thing. 

At the end of the day, people who hold student loans are a lot like graduates of Ivy League colleges. Not because they’re the same people, but because they draw outsized attention and don’t represent the majority. About 13% of Americans (or 16% of U.S. adults) have student loans. Meanwhile, 38% of American adults have revolving credit card debt representing almost $630 billion. Tens of millions of home owners account for 85 million mortgages, representing over $12.6 trillion in combined debt. The focus on student debtors is frustratingly myopic, frequently regressive, and — yes — unfair. Still, I think Trump ought to help them out a little more. There truly is no benefit to haphazardly throwing millions of debtors into financial purgatory. 

You can believe that it’s unfair to continue to help these borrowers, and that’s fine, but helping them out is probably the best thing for the overall economy. If we did it for Goldman Sachs, why not pause payments for a class of consumers while the administration develops a better plan? Whether that’s fair or unfair isn’t really the point; it’s just the best thing for everybody.

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Your questions, answered.

Q: I've noticed that most news outlets use the phrase “disproven claim” every time they mention certain topics — in lockstep. And I wondered how they all decided to use the same term in relation to the same event or theory — and what the criteria is for stating as fact that something is a disproven claim. Does it mean there are no experts who disagree that it's been disproven? Is there just one person who needs to claim to have disproven it? Do all of the news outlets have a meeting to decide which topics they'll put that phrase in front of? Tell you the truth, it's a little 1984-ish the way they do it. 

— Anonymous from Texas

Tangle: We hear you — a few phrases have certainly become common in the way the media covers some claims, especially in the Trump and post-Covid era. “Repeated the disproven/false claim” is one example of that, and we’ll add “asserted/said without evidence” as another.

These phrases grate on us, too — just labeling a statement as false or declaring no evidence to support a claim both feel like insufficient proof of work. At Tangle, if we cover a politician saying something incorrect, we won’t say “so-and-so said falsely” but will instead simply provide the pertinent facts so you can see for yourself. And when someone makes a claim that existing evidence can only oppose and not support, we won’t say “asserted without evidence” but instead will provide the best evidence for and against — even if the evidence in favor of the claim is only proximate. 

But, still, we can see why these phrases became popular. Journalists like using short and efficient phrases. They also tend to borrow wording from each other; that’s something we do all the time. The phrases “repeated the disproven claim” or “asserted without evidence” are certainly efficient, but they do have their problems. These phrases are usually indicative of a kind of editorial bias and indicate a kind of in-group signalling, which only further contributes to the issues of bias and media mistrust that we’re all so familiar with by now. 

Even though we know that government officials — in both the Biden and Trump administrations — have pushed journalists to cover stories in the ways they want them to be covered, these phrases probably aren’t part of a coordinated conspiracy. That is to say, we aren’t going to go out on a limb and assert it without evidence.

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Under the radar.

The start of the U.S.- and Israel-backed plan to resume aid distribution in Gaza has experienced several setbacks this week. On Sunday, the chief executive of the Gaza Humanitarian Foundation, which oversees the new system of aid distribution, resigned after calling on Israel to allow more aid into the strip. On Tuesday, Palestinians overran an aid distribution center, leading to reports of looting and shots fired by the Israeli military to disperse the crowd. While the Gaza Humanitarian Foundation said aid distribution would still resume after the incident, the week’s difficulties underscore challenges facing the new system designed to deliver aid directly to Gazans with support from private U.S. security firms. The Wall Street Journal has the story.

Numbers.

• 43 million. The approximate number of Americans with student loan debt in 2024, according to Department of Education (ED) data. 
• $1.6 trillion. The total federal student loan debt at the end of 2024. 
• $14,000. The approximate average student debt owed by borrowers ages 24 and younger in 2024. 
• $43,000. The approximate average student debt owed by borrowers ages 62 and older in 2024. 
• 5 million. The approximate number of student loan borrowers who have not made a monthly payment in over 360 days, according to ED data. 
• 4 million. The approximate number of student loan borrowers in late-stage delinquency (have not made a payment in 91-180 days). 
• $1–3 billion. The estimated increase in monthly student loan payments in 2025, according to a Morgan Stanley estimate.
• 39%. The percentage of Americans who say it is important for the federal government to forgive student loan debt, according to a June 2024 AP-NORC poll.

The extras.

• One year ago today we covered the Supreme Court’s racial gerrymandering decision.
• The most clicked link in yesterday’s newsletter was the video about the largest organisms on Earth.
• Nothing to do with politics: Unsure what to watch? Take the “extremely helpful” Tuesday night move quiz.
• Something to do with politics: Missed yesterday’s newsletter? Prefer short-form video? Tangle Editorial Fellow Hunter Casperson broke down the Supreme Court's religious charter school ruling in an Instagram reel. 
• Yesterday’s survey: 2,461 readers answered our survey on Oklahoma Statewide Charter School Board v Drummond with 78% saying they wish the court had rejected religious school funding. “Separation of church and state should be at the forefront of future decisions on denying public funding for religious schools,” one respondent said.

Have a nice day.

Obsessive-Compulsive Disorder (OCD) affects nearly 1 in 50 people worldwide. In an attempt to better understand the genetic roots of OCD, University of Florida psychiatry professor Carol Mathews analyzed the DNA of over 53,000 people with OCD and over two million people without the condition. The study led to the discovery of hundreds of genetic markers potentially linked to OCD, which Mathews hopes will help improve treatment options and identification methods for those at risk for the condition. The Conversation has the story.

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