The Linda McMahon Student Loan Plan: 3 Things to Know

Linda McMahon, a long-time supporter and donor to President-elect Trump, was nominated for the Cabinet position of Secretary of Education. What should borrowers, especially if they have high student loan balances, expect during her tenure? 

We’ll cover three policies borrowers with high student loan balances need to watch out for.

Who is Linda McMahon and what are her views on student loans?

Ms. McMahon was the Administrator for the Small Business Administration during President-elect Trump’s first term. She was an executive at the WWE wrestling organization for many years, and she’s married to Vince McMahon, co-founder of the WWE.

Her views on student loans might be more defined by what she hasn’t said than what she has said. 

Prior to her 2024 nomination, McMahon hadn’t espoused any particular viewpoint regarding what policy should be concerning student loans. Now, she is being more vocal with her ideas.

Here’s a recent post from her X account shortly after her nomination. It’s clear she wants to promote pathways besides college.

K-12 policy will likely take a front seat in a McMahon-led Department of Education

President-elect Trump has made it clear he wants to abolish the Department of Education, and public statements made by his Administration make it clear that their goal is to send education “back to the states.”

However, that policy is very unlikely to be instituted. Multiple Republican administrations have tried and failed to pass similar policies due to lack of support from Congress.

So borrowers can be hopeful that McMahon’s attention will be more on primary and secondary school issues and school choice, and she won’t make student loans a centerpiece of her areas of focus.

3 Possible consequences of the McMahon student loan plan

Borrowers should be aware of the following potential policy impacts and changes with a McMahon-led Department of Education.

1. Rules from the prior administration could be rewritten

Any rule that can be written by executive action can also be unwritten. The good news is that some of the promises made to borrowers by the Biden Administration would be so complex to untangle (such as the IDR account adjustment) that they probably cannot be.

However, the new rules on PSLF and IDR repayment plans that the Biden-Harris Administration enacted could easily be rewritten — and probably will be, at least in some capacity — by McMahon.

2. Loan limits could come under scrutiny

Republicans in Congress and moderate to right-leaning fiscal watchdog groups have growing concerns about the size of the PLUS loan program, as well as its costs.

Highly educated borrowers continue to drift toward the Democratic coalition in terms of percentages.

When Congress looks to slash spending, capping PLUS loans or reducing borrowing limits could very much be on the table. What’s uncertain, though, is how much could actually be accomplished without a 60-vote filibuster proof majority in the Senate.

Theoretically, anything that impacts budgets and spending could be accomplished through a simple majority through budget reconciliation. The question is whether loan limits would qualify for that type of legislative maneuver. 

Most likely, borrowers who are already enrolled in a program would be exempt from caps on loan limits, and existing borrowers would be unaffected if something changed in this regard.

3. IDR plans could undergo a major overhaul

The Republicans in the House of Representatives have proposed an income-driven repayment plan similar to their proposal in the 2017 Prosper Act, with the major exception that it would subsidize accruing interest and help pay down principal.

This is a plan they could potentially offer through executive action, unless the courts say IDR plans made by the ICR statute are illegal. It’s also quite likely that available IDR plans will be reduced or restricted in some way during a McMahon tenure at the Department of Education.

What seems different than the early Biden Administration is that a Secretary of Education McMahon does not come into office with “more generous IDR plans” high on her agenda.

That could prove a good thing for borrowers who are looking to take advantage of the status quo of repayment plans.

Headlines with Secretary McMahon on student loans will likely be a repeat of history

Online publications, including this one, love getting clicks and readers. And providing calm, sound analysis doesn’t sell as well as eliciting fear and worry.

During the first Trump presidency, there were huge numbers of negative headlines about Secretary of Education Betsy Devos, predicting a host of very bad things that would happen on student loan policy.

Some, such as slow walking borrower defense claims, actually occurred. But most, such as the elimination of PSLF, ended up being purely talking points or messaging that the administration knew wasn’t going to go anywhere.

I expect that McMahon’s student loan plan is going to be mostly ignoring student loans, unless she has no choice but to address them. And when she does pay attention to student debt, the primary concern for borrowers is going to be the possibility of losing access to benefits and promises made under the Biden Administration.

Remember, programs like PSLF and IBR are written into law and require 60 votes in the Senate to override. So McMahon will be limited in what she can accomplish on student debt without a bipartisan consensus in Congress, which appears unlikely to happen anytime soon.

If you need a plan for your student loans regardless of what Linda McMahon does at the Department of Education, our team can help.