Student Loan Forgiveness: Could the New Administration Claw Back Your Award?

“I’ve been getting a lot of emails from borrowers concerned that President Trump could claw back their forgiveness,” Chicago-based student loan expert Mark Kantrowitz told CNBC in late November. Fast forward to this week, and those concerns have only grown louder. The spark? Alarming reports that employees from billionaire Elon Musk’s Department of Government Efficiency Service (DOGE) gained access to computer systems inside the U.S. Department of Education containing student loan records.

Millions of borrowers who’ve benefited from student loan forgiveness programs worry that the new administration could suspend or reverse their discharges. And now, breaking news related to the Musk team’s access to the student loan database has understandably raised questions—and fears—about whether those discharges will hold.

Let’s take a closer look at this unfolding controversy, starting with the latest developments.

First, in a press conference on Friday, February 7, the president defended the Musk team’s activities. However, NBC Network News on Saturday morning reported that federal officials, legislators, and watchdog groups had all expressed concerns about the swift deployment of Musk’s aides within as many as 19 federal agencies. That’s because sources told the network his team had gained access to sensitive data while leading a purge of employees.

NBC News had also verified that two 22-year-old DOGE employees were allowed to potentially access sensitive data because they had been granted administrator permissions within the Education Department’s email system. The network also reported that one of them had accessed the back end of the Department’s public website.

A longtime ED employee who spoke on the condition of anonymity told the news division that the agency’s career staff was feeling an “urgent and deep worry” that Musk’s team would push them out. Staff also feared that Musk’s team would use the information within the national student loan database to hinder the government’s capacity to collect student loan payments—and even target some Americans.

Before the weekend, the New York Times had reported that the Department of Education’s directory now contained at least 16 members of the DOGE Service, meaning that the government had hired them. The Washington Post also reported that the DOGE team had already fed “vast troves” of sensitive financial and personal data from the Department into artificial intelligence platforms, “looking for unwanted federal programs and trying to determine which human work can be replaced by AI, machine learning tools or even robots.”

Beyond talking about using Microsoft’s Azure cloud computing platform, DOGE Service representatives refused to comment on the Post’s questions as to which specific artificial intelligence platforms the team was using. AI platforms carry several risks, such as the well-known tendency of AI platforms to hallucinate—meaning that they frequently and convincingly offer nonsense as output. We discuss that peculiarity in depth in our 2023 report, AI Hallucination Fix Now in Testing, Georgia Tech Researchers Say.

Because of how they’re trained, artificial intelligence platforms are also more vulnerable than most types of software to a broad range of security risks, such as hacking. These risks could be particularly acute in systems with millions of records containing personal, identifiable information (PII), such as the Department of Education’s student loan and financial aid databases.

Late that week, three groups of lawmakers from both the House and Senate sent pointed letters to Denise Carter, the acting secretary of education. Along with other requests, the senators asked for lists of all the individuals granted access to personally identifiable or sensitive information maintained by the Department since the president’s inauguration on January 20, plus the specific steps ED took to protect such sensitive or personally identifiable data in financial aid systems containing millions of student records.

On February 5, House Democrats instead took a very different approach. They wrote Carter to ask for an urgent meeting without delay. Two days later, on Friday morning, a group of those representatives led by California’s Maxine Waters of Los Angeles and Mark Takano of neighboring Riverside County had attempted to enter ED’s headquarters for a meeting with Carter. As this video depicts, chaos ensued while the legislators clamored to get inside the front doors after security personnel had stopped them and blocked their entry.

Florida Congressman Maxwell Alejandro Frost of Orlando then posted to his X account, “they are blocking members of Congress from entering the Department of Education! Elon is allowed in and not the people? ILLEGAL.”

Also that Friday, the 300,000-member University of California Student Association filed a federal lawsuit against Carter and the Department of Education. Because of the alleged unauthorized disclosures of nonpublic personal and financial data and because the DOGE staffers “are feeding sensitive data from ED’s systems into artificial intelligence systems maintained by third parties and subject to significant security risks,” the complaint claims violations of four statutes and regulations.

It alleges violations of the 1974 Privacy Act, the Department’s privacy regulations, the Internal Revenue Code, and the 1946 Administrative Procedure Act. The plaintiff association asks the United States District Court for the District of Columbia for an emergency injunction in the form of a temporary restraining order barring the DOGE employees from accessing the National Student Loan Data Base and other ED systems.

ABC News later summarized the alleged risks to borrowers that the 19-page complaint cites. The UC Association documents those risks within an extensive list of potential identity theft and privacy hazards for the 42 million student loan borrowers who make up 13 percent of America’s population:

It says DOGE could now have access to Social Security numbers, driver’s license numbers, dates of birth and contact information for student loan borrowers. The database also houses information on the parents of dependent loan applicants, including citizenship status and income information.

The suit says it’s an “enormous and unprecedented” invasion of privacy for more than 42 million people whose personal data is stored in Federal Student Aid systems. It says those people trusted the department with their information when they applied for federal loans and grants or filled out the FAFSA student aid form.

According to the docket and in a stipulated order filed late on February 11, the UC Association and the Department had agreed that the DOGE Service would stay out of ED’s databases during the court’s scheduled briefings and hearings lasting until February 17. Appointed by President Obama, U.S. District Judge Randolph D. Moss approved the stipulation, then scheduled the first hearing only three days later on February 14. Similar stipulations that temporarily keep some DOGE staff out of administrative computer systems were approved in other litigation against federal agencies like the pending case against the Treasury Department.

Now, in view of all these reports, do student loan borrowers need to worry that their forgiveness will be canceled or reversed by the new administration?

Keep in mind that the Biden Administration set a new record for student loan forgiveness, discharging a staggering $188.8 billion in federal student debt for more than 5.3 million borrowers. Most recently, the final loan action by the outgoing administration’s Department of Education on January 15 discharged $4.5 billion worth of loans for more than 261,000 former students defrauded by Ashford University; Ashford is now known as the University of Arizona Global Campus (UAGC).

In short, borrowers probably don’t need to worry that the new administration will attempt to reinstate their forgiven loan payments. The main reason is that a series of federal court decisions has ruled that student loan discharges are considered final.

For example, in blocking one of the Biden administration’s debt relief initiatives in June 2024, U.S. District Court Judge Daniel D. Crabtree agreed with the Eighth Circuit’s opinion in Nebraska v. Biden. That decision characterized student loan forgiveness as having an “irreversible impact,” such that—as Biden’s Justice Department argued—one “cannot unscramble this egg.”

Also on the very same day, another court—the U.S. District Court for the Eastern District of Missouri—refused to reverse any previously granted student debt relief. That decision came in the Missouri v. Biden opinion, where the court ruled that student loan forgiveness cannot be retroactively revoked.

Moreover, in a comprehensive analysis published by the College Investor, Kantrowitz points out that the U.S. government generally doesn’t try to claw back loan forgiveness once granted. As examples, he cites two substantial changes to different federal student loan programs during the past 15 years that have only been applied prospectively; one case involved the Income-Based Repayment (IBR) program in 2014, and the other involved Teacher Loan Forgiveness in 1998.

He also emphasizes that changing the terms under which forgiveness is granted would probably face significant legal challenges. He argues that any government modification of a pre-existing loan agreement would be an attempt to unilaterally modify a contract—which contract law generally doesn’t allow. That’s because technical contract law doctrines like promissory estoppel would typically preclude the government from revoking a promise upon which borrowers reasonably relied.

As soon as he had learned about the activities of Musk’s team inside the Education Department, Boston attorney and Forbes columnist Adam Minsky alerted his readers that “reduced staffing, funding cuts, or operational disruptions could lead to processing delays or errors for key federal student loan programs, including loan forgiveness and discharge programs. And a data breach could compromise a borrowers’ security.”

Whether they’ve received student loan forgiveness or not, all borrowers should drop what they’re doing, log in to their computers or mobile devices, and load up the Education Department’s website. Without delay, they should then take the following quick steps recommended by Minsky:

1. Shore up your student loan account’s security in your Department of Education account. This is crucial to do right away, given the Washington Post’s report that software engineers on Musk’s team already harvested “vast troves” of sensitive financial and personal data from the Education Department, and the federal court order temporarily preventing their further access expires on February 18.
2. Take screenshots of your student loan dashboard at the Education Department’s website. An even better option: print the dashboard to searchable PDF files. If the dashboard doesn’t quite fit, try scrolling PDF capture software like TechSmith’s Snagit;
3. Download the federal student loan data file from your ED account; here’s the download procedure from studentaid.gov.
4. Take screenshots of your student loan forgiveness tracker for PSLF, the Public Service Loan Forgiveness program.
5. Certify your PSLF employment with the Education Department for student loan forgiveness credit. You should do this at least once a year, or anytime you change jobs. Here’s how to certify using the PSLF Help Tool.
6. Download student loan records from your loan servicer account. This step is especially important now that America’s main enforcer of student loan servicing terms, the Consumer Financial Protection Bureau (CFPB), was suddenly ordered by the new Office of Management and Budget Director Russell Vought to shut down in what some are calling another “Saturday Night Massacre.” Democratic Senator Elizabeth Warren of Massachusetts, a co-founder of the bureau after the 2008 financial crisis, said on X that Vought was “giving big banks and giant corporations the green light to scam families.” The orders were promptly met by two lawsuits filed by the CFPB’s employee union seeking to block DOGE’s access to employee data and reverse Vought’s directives. 
7. Download key student loan program pages from ED’s website. Don’t depend on the Wayback Machine or other archive platforms to save web pages that are relevant to your student loan financing arrangements and history. In fact, while we wrote this article section in early February 2025, the home page at ed.gov was displaying a “404 Not Found” error message, only to be replaced with a new, redesigned page the following morning.

By February 10, new rumors had started flying on social media—and flying fast. The rumors were spread by several influencers claiming that borrowers suddenly had a brand new way to receive student loan forgiveness.

Why? Because the DOGE Service broke the law by accessing student loan records within the Education Department’s databases, or so these influencers claimed. So now, as a result, anybody holding a student loan could get it “erased” by claiming that Musk’s crew violated the Family Educational Rights and Privacy Act (FERPA).

One such FERPA enthusiast had garnered more than five million video views, and 768,000 page likes on TikTok when we reviewed her clip on February 11. She was well on her way to becoming a TikTok superstar by claiming that all borrowers needed to do was call their college’s financial aid office, let them know “what went down,” and tell them “that you don’t feel comfortable paying for that anymore because you don’t have to.”

If only it were that simple.

In 1974, Congress enacted FERPA to protect the privacy of a student’s educational records by requiring consent prior to most disclosures of the personal information contained within those records. The statute precludes the federal funding of schools with a policy or practice of enabling the release of students’ education records without the express written consent of their parents.

Despite its role in safeguarding personal data, this statute explicitly lacks a “private right of action.” In fact, a 2002 U.S. Supreme Court decision, Gonzaga University v. Doe, held that individuals—including students and their parents—cannot file a lawsuit solely based on FERPA violations.

Moreover, even if individuals had some sort of private right of action in court under FERPA, student loan forgiveness isn’t one of the available remedies provided by this statute. In other words, FERPA doesn’t really have anything to do with a student’s obligations to pay for their student loans.

One possible legal theory is that under FERPA, a borrower could file a complaint with the U.S. Department of Education. That’s an available remedy under this statute. But during the next four years, as a practical matter, what good would that do? Minsky points out that “since the Department of Education is controlled by the Trump administration, which ultimately authorized DOGE’s access to the sensitive data, any such complaint is unlikely to yield results.”