Trump Launches $1.7T Student Debt Literacy Drive

- The Trump administration launches borrower education initiative amid critics' concerns. - Layoffs and servicing challenges cast doubt on campaign’s effectiveness. On September 5, 2025, the Trump administration announced a financial literacy campaign. According to the U.S. Department of Education, this campaign will educate student loan borrowers about the “benefits and risks” of federal student loans. The initiative comes as the national student debt burden nears $1.7 trillion, with over 6 million borrowers behind on payments and more than 5 million in default. The department designated its Office of the Ombudsman to lead the campaign, which will focus on proactively engaging students and families before they take out loans. Undersecretary Nicholas Kent stated the initiative aims to empower borrowers with decision-making tools that he said will help reduce debt burdens, improve repayment outcomes, and enhance satisfaction with their educational investments. Despite these goals, skepticism surrounds the program due to structural challenges at the Department of Education. In March, significant layoffs raised doubts about the Ombudsman office’s ability to manage the campaign. On September 6, 2025, higher education expert Mark Kantrowitz said in a statement, “The real question is whether there’s anybody left in the Ombudsman’s office to do any of this.” Critics have also taken issue with the campaign’s focus on borrower education rather than systemic problems. Carolina Rodriguez of the Education Debt Consumer Assistance Program argued the initiative distracts from urgent consumer complaints and servicing failures, while Persis Yu from the Student Borrower Protection Center highlighted that financial literacy efforts do little to resolve the backlog of 1.3 million income-driven repayment (IDR) applications. This backlog surged after the repeal of President Joe Biden’s SAVE plan. Earlier this year, a Republican-led legal challenge struck down the SAVE plan, which was intended to alleviate borrower repayments. As a result, the repeal has left many borrowers in limbo, worsening delays for essential repayment adjustments.