On July 4, President Donald Trump signed the “One, Big, Beautiful Bill Act” into law, declaring war on the working class. The bill will gut funding for programs like SNAP, Medicaid, and the Child Health Insurance Program, while increasing funding for nuclear weapons, ICE and the military. As part of the Trump administration’s efforts to roll back any programs that benefit working people, the bill will also deal a blow to working-class people attempting to access a higher education — reducing student loan options and gutting student loan forgiveness programs.
Reducing access to higher education
As part of its provisions, the bill includes the elimination of grad PLUS loans and the capping of Parent PLUS loans at $65,000 per student. Grad PLUS loans provide increased funding to graduate or professional students whose existing financial aid did not cover the cost of their education. While direct unsubsidized loans, which will continue to exist, cover up to $20,500 per year, the average cost for a master’s degree is $62,820. Parent PLUS loans provide a similar option for undergraduate students, covering the cost of a student’s tuition remaining after their existing financial aid, as the average cost of a bachelor’s degree is around $38,000.
Both grad and Parent PLUS loans are deeply flawed forms of financial aid that have served as a flimsy bandaid for an increasingly unaffordable higher education system. Grad PLUS loans and Parent PLUS loans carry steep interest rates (9.08% and 8.94%, respectively, in 2025).
Parent PLUS loans, in particular, have been referred to as a “double-edged sword” for Black families. While Parent PLUS loans were originally intended as an option for high-income families, increasingly, Black and Latino families have turned to them as a means to fund their students’ education due to disparities in generational wealth and income as a result of the system of white supremacy produced under capitalism. The Education Trust found, in 2018, that 44% of Black families taking out Parent PLUS loans earned $30,000 or less per year.
Grad PLUS loans, as well, have been used as a cash cow for universities seeking to bring in hundreds of thousands of dollars from graduate and professional program students who are left with endless debt afterward.
While flawed and predatory in nature, these programs have made it possible for working-class students to achieve a higher education — particularly for Black and Latino students. At the same time as these programs are being eliminated, many universities, nonprofits and corporations have, out of pre-emptive compliance or due to legal battles with the Trump administration, ended their DEI scholarship programs that provided support to marginalized students to access education.
Already, just 10% of medical students, 8% of law students and 7.5% of doctoral students are Black. Similarly, just 12.7% of medical students, 14% of law students and 7% of doctoral students are Latino. As a result of these changes, even more Black and Latino working-class students and families will be pushed out of higher education or forced to take out private loans with variable interest rates, fewer protections for borrowers and no access to loan forgiveness.
A lifetime of debt, a lifetime of profit
The bill will also gut student loan forgiveness programs, reducing loan repayment to two options: 1) a standard repayment plan of 10 to 25 years that does not take income into account; or 2) an “assistance plan” that sets payments at 1% to 10% of graduates’ discretionary income, with interest accruing across a lifetime of payments. Previous options to defer payments due to economic hardship or unemployment will no longer exist, punishing working-class individuals for the low wages and job insecurity produced and maintained by the billionaire class. These changes will drastically reduce working-class students’ abilities to access a higher education, forcing students to choose between taking out private loans with no possibilities of future loan forgiveness and increased difficulty at discharging them via bankruptcy and leaving them with a lifetime of debt.
Rep. Tim Walberg, chairman of the House Education & Workforce Committee, recently stated regarding the bill, “The American people have been clear that they want to end wasteful government spending. This budget resolution delivers on that promise while providing relief to working families, students and small businesses.” In reality, this is an effort to redistribute wealth from the working class to the ruling class by privatizing student loan options, bringing in greater profit to banks and financial institutions through variable interest rates ranging from 3.19% to 17.95%.
This push to privatization has been sought by right-wing think tanks like the Heritage Foundation for years. In their “Mandate for Leadership,” also known as Project 2025, the Heritage Foundation calls for student loans to be “restored to the private sector” with the elimination of student loan forgiveness programs. Project 2025 called for these changes are part of the right wing’s attempt to take back higher education from the “woke ‘diversicrats’” that have fostered programs and protections for LGBTQ students, Black students and other marginalized students.
This comes at a time when the Trump administration is cracking down on institutions across the country for their supposed cultivation of antisemitism on campus. The Trump administration and the billionaire class understand that young people, including college students, are increasingly turning against U.S. foreign policy and toward socialism.
As a result, they are attempting to financially crush institutions, like Harvard, in order to restructure them according to a right-wing ideology and restructure student loan programs to reduce the number of young people coming into contact with young student activists who are increasingly joining the millions of people across the country who reject the genocide in Palestine, the deportation of immigrants and the ongoing war on the working class.
Fully funded education, pre-K through higher education
What became student loans began during the Great Depression as a response to the growing poverty of the working class and the billionaire class’s fears of rebellion and revolution. The federal government disbursed grants to cover the cost of tuition and worked with states to provide free, or almost free, tuition to state and city universities for local residents. College enrollment rates soared, and by 1970, nearly 90% of young people enrolled in college or university. However, in the 1990s with the collapse of the Soviet Union and economic shifts in the United States, the federal government took the opportunity to begin reducing the amount they offered in grants and introduced student loans, allowing the government to profit from the exploitation of students.
The bill’s provisions fully serve the goals of the billionaire’s agenda to redistribute the profits reaped from student loans to the pockets of the ultrawealthy. As of March 2025, the people of the United States hold more than $1.7 trillion in student loan debt. As student loan debt continues to skyrocket and the cost of a higher education continues to soar, the solution is not the privatization of student loan debt. There are alternatives.
The government could abolish debt, wiping out all student loans immediately. Rather than continuing to provide student loans, the government could take control of the finances of colleges and universities across the country, ending a fragmented system of unequal resources for state and city institutions across the nation. The Education Data Initiative has found that the first year cost of an entirely free college education would equate to 31% of the current funding spent on student aid per year. By cutting administrative bloat, the government could further reduce the cost of a free education.
Just as the Soviet Union once did and as Cuba, and even many parts of Europe, continue to do, it is fully realizable for the people of the United States to have access to a free education from preschool through higher education, as well as free trade and professional education. Rather than investing in war, police militarization, and immigrant detention and deportation, the government could invest in fully funded education from preschool onward.
The rising unrest and organization of the masses of working-class people during the Great Depression shows that it is possible to force the government to accede to our demands. Already, polls show that 63% of voters, regardless of political affiliation or voting habit, are in favor of affordable education and 52% oppose the gutting of loan forgiveness programs. While the billionaires are pushing forward their agenda, we need to get organized and advance our own.
Feature image: McKeldin Library at the University of Maryland. Credit: needpix.com
