A federal judge blocked Trump's rule that would have capped federal student loans for certain graduate students. The policy was supposed to start July 1. Now it won't.
The rule targeted specific grad programs. Which programs? The ones where students borrow six figures to get degrees that pay thirty-eight thousand dollars a year. Trump's administration looked at the data and thought maybe the federal government shouldn't fund someone's $200,000 poetry MFA. A judge disagreed.
Graduate students can now continue borrowing unlimited amounts of money they will never pay back to study subjects that do not require graduate degrees. The taxpayer remains on the hook. The universities keep cashing the checks. The students keep Googling "what is forbearance" every six months.
This is excellent news for the 28-year-old who just took out $150,000 to get a master's in nonprofit management. He will spend the next forty years making loan payments calculated as a percentage of his income from his job at a nonprofit that helps people manage their student loan debt. The system works.
The judge issued a temporary block. Temporary means it could still happen later. Later means never. Never means the loans will keep flowing until the entire higher education financing system collapses under its own weight or everyone just agrees to pretend the debt isn't real.
Trump's Department of Education wanted to limit borrowing based on whether graduates of specific programs could actually pay the loans back. This is called outcomes-based policy. The judge called it illegal. The difference between those two words is about $1.7 trillion in outstanding student loan debt.
Grad students celebrated by enrolling in more classes they can't afford to learn things they could have Googled for free.
Photo by Ian Hutchinson on Unsplash
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