Students Voting for Trump did Not Gain Them any Help or Access to Student Loan Bankruptcy
- Many people complain about paying back student loans.
- In ability to default really is an issue for many as the student loans grow from penalties.
- For other loans, people can declare bankruptcy to escape debt with the exception of students.
None of this means people can default whenever they wish. It does mean the consequences for student loans is harsher than for commercial loans, etc. One example is our president.
Trump’s bankruptcies amount to $billions. No one has said no to Trump, you have to pay it off. The reason being? He is entitled to declaring bankruptcy. He has done it multiple times and lenders still create loans for him. No Senator has ever passed other laws like they did to block student loan bankruptcy. The law was championed by Joe Biden.
However, I still believe an unembarrassed Trump is the king of declaring bankruptcy.
Some of Trump’s defaulted Loans:
Deutsche Bank: In 2005, Trump financed more than $2.5 billion for real estate projects from Deutsche Bank, most notably to fund the construction of Trump Tower in Chicago. After the 2008 financial crisis, Trump failed to sell or lease the majority of the condos or retail space in the building.
Fortress Investment Group: Trump also borrowed $130 million from Fortress Investment Group for the same project, according to TheDailyBeast.com. These loans were also forgiven in a lawsuit.
Trump Castle Bonds: Trump floated bonds worth $300 million to fund Trump Castle, a New Jersey casino. He missed a $42 million interest payment, according to the Los Angeles Times. But the bond holders agree to forgive more than $200 million in payments over five years, the New York Times reported. The casino ultimately went bankrupt.
More Reading: “The Truth About Trump’s Bankruptcies,” Richard West
“Trump voters with student loans are having ‘buyer’s remorse’ over his latest debt collection moves,” Business Insider
Fortress Investment Group
- Student-loan borrowers who voted for Trump said they’re frustrated with the collections restart.
- They still support Trump’s stance on collecting student loans, but think default punishments are happening too fast.
- While negative credit reporting resumed, Trump paused Social Security garnishment.
Tracy Davis, 42, still thinks that voting for President Donald Trump was a good choice.
But she wishes the president would think more carefully about how his actions are affecting student-loan borrowers like herself. Adding . . .
“I did vote for Trump. This was a very big surprise for me. I mean, I was thinking he was going to fix some things, and it didn’t go the way I was seeing it going with student loans.”
Tracy Davis is referring to the Trump administration’s move to restart collections on defaulted student loans in early May after a five-year pause. Negative credit reporting for defaulted student loans resumed in October 2024, and Trump’s Education Department announced that collections would resume in an effort to restore accountability to the student-loan system.
In an Opinion Piece, Trump’s Bill Collector Linda McMahon writes in an opinion piece. “Borrowing money and failing to pay it back isn’t a victimless offense. Debt doesn’t go away; it gets transferred to others. If borrowers don’t pay their debts to the government, taxpayers do.”
Prior to the pandemic pause, Davis said she was able to make her $150 student-loan payments. However, once the pause lifted, she was billed nearly $400, which she said she could not afford. It caused her to fall behind on payments, and her credit score took a hit after negative credit reporting resumed.
Tracy: “I think they pulled the trigger a little too fast, especially with hitting the credit report, because we’re not all in the same situation. I just wish there was more thought put into it.”
Business Insider has heard from dozens of student-loan borrowers who are delinquent or in default on their debt, including some who voted for Trump. Borrowers tend to go into default after 270 days of missed payments.
Many borrowers expressed frustration with the abrupt collections restart and the consequences for defaulting such as negative credit reporting and wage garnishment. Adding, they recognize the importance of restarting the system and ensuring borrowers pay back their loans.
Ellen Keast, a spokesperson for the Department of Education, previously confirmed to Business Insider that Social Security garnishment for defaulted borrowers is paused:
“The Trump Administration is committed to protecting social security recipients who oftentimes rely on a fixed income.”
However, the department still plans to garnish wages for defaulted borrowers later this summer. Davis is concerned that she might be on the receiving end of that policy. Department of Education restarted collection efforts on May 5, 2025.
Tracy Davis: “If you were way behind and you had no intention of paying them back, yes, go after them, garnish wages. But when you’re trying to make it and you’re trying to honestly make an effort to pay them off, I don’t think that’s right that we’re getting wages garnished or credit hits.”