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As the U.S. Department of Education faces significant turmoil, with the Trump administration pushing to reduce and potentially eliminate it, millions of student loan borrowers are left wondering about the impact on their debt. Recent events, including the Department of Government Efficiency (DOGE), headed by Elon Musk, gaining access to sensitive data systems, have sparked online rumors about potential student loan forgiveness. However, these rumors are unfounded.
No Forgiveness Under FERPA for Data Exposure
One of the circulating rumors suggests that DOGE's access to Department of Education data systems, which contain sensitive personal data of millions of borrowers, violates the Family Educational Rights and Privacy Act (FERPA). Some believe this violation could be grounds for requesting student loan forgiveness. However, FERPA does not provide a basis for student loan forgiveness. It is a federal law enacted in 1974 to protect the exposure of personally identifiable information in a student's education record, but it does not have a "private right of action," meaning individuals cannot file a lawsuit due to a FERPA violation.
The Supreme Court has clarified in Gonzaga University v. Doe that FERPA's nondisclosure provisions do not create individual rights, and thus, borrowers cannot sue for damages or forgiveness based on a FERPA violation1. Borrowers' only recourse under FERPA would be to file an administrative complaint with the Department of Education, but given the current administration's involvement in authorizing DOGE's access, such complaints are unlikely to yield results.
University of California Student Association Lawsuit
The University of California Student Association has filed a lawsuit against the Education Department to halt DOGE's access to sensitive student loan borrower data. The lawsuit seeks injunctive relief under the Privacy Act and the Internal Revenue Code but does not pursue student loan forgiveness as a remedy.
No Forgiveness if the Department of Education Shuts Down
Another rumor circulating is that if President Trump shuts down the Department of Education, borrowers' student loan obligations will disappear, and they may be entitled to forgiveness. This is false. The Department of Education can only be eliminated by Congress, and even if it were to shut down, the federal student loan system would likely be transferred to another agency, such as the Department of Treasury. Borrowers would still be obligated to repay their loans, and shutdowns would not lead to forgiveness.
Other Student Loan Forgiveness Programs Threatened
Currently, borrowers can still access programs like Public Service Loan Forgiveness and Income-Based Repayment. However, Republican lawmakers are considering limiting or repealing federal student loan forgiveness programs to offset costs associated with extending tax cuts. This could impact plans like the SAVE plan, ICR, PAYE, and changes to PSLF and Borrower Defense to Repayment.
In summary, despite the turmoil at the Department of Education, borrowers should not expect student loan forgiveness due to data exposure or potential department shutdowns. Instead, they should remain informed about ongoing legal challenges and potential changes to existing forgiveness programs.
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Source:
Adam S. Minsky, Forbes https://www.forbes.com/sites/adamminsky/2025/02/11/can-you-get-student-loan-forgiveness-for-department-of-education-disruptions/