At Senate Spotlight Forum, Warren, Senators Rip McMahon’s Cuts to Education Department and Trump’s “Big, Beautiful Bill”
Witnesses, including former top Education Department official, Army veteran, and personal finance educator, testify cuts will destroy American Dream
Warren: “No nation builds a strong future by short changing the education of its young people. We are here today because we believe in the future we can build, and we know that path is education.”
Video of Round 1 Exchange (YouTube) | Video of Round 2 Exchange (YouTube) | Video of Round 3 Exchange (YouTube) | Closing Statement (YouTube)
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs (BHUA), led a Senate forum entitled “Stealing the American Dream: How Trump and Republicans Are Raising Education Costs for Families,” highlighting the consequences of Secretary Linda McMahon’s reckless dismantling of the Department of Education (ED) and President Trump’s “big, beautiful bill” for working- and middle-class students and borrowers.
In her first round of questions, Senator Warren warned that cuts to the programs that help middle-class students afford a college education would raise monthly costs for borrowers and their families. Professor Jonathan Glater of the UC Berkeley School of Law said that, by one estimate, the average family of four would pay nearly $5,000 more on their student loans per year as a result of these cuts.
“For many borrowers, these cost increases will be unsustainable…if they’re unable to make payments, they will fall into delinquency—even potentially into default,” said Professor Glater.
Ms. Bonnie Latreille, a former high-ranking official at the Department of Education, testified that “these cuts are just going to make things worse—longer hold times, longer timelines to get answers from their complaints, less…oversight of the student loan servicers that take their money each month.”
Senator Warren also noted how raising these borrowers would devastate the economy to benefit the wealthy.
“[T]his is an economic disaster…The only reason the Republicans are pushing this is so that they can fund tax cuts for a handful of billionaires and millionaires,” said Senator Warren.
In her second round of questions, Senator Warren debunked the Trump administration’s argument that these cuts are about efficiency, pointing out that even the Department of Government Efficiency has said service will get worse with cuts.
Ms. Aliche, a personal finance educator, shared the story of a woman whose monthly student loan payments are larger than her mortgage and already cannot get the support she needs.
“She is drowning, and she's been doing everything to try to lower that. She's been on hold for hours at a time, has not been able to reach anyone,” said Ms. Aliche.
“The number of people who will get hurt by these decisions to make cuts at the Department of Education will be measured, ultimately, in the millions, and for some, they will never even know what went wrong. All they will know is they can't put their lives back on track, all because three billionaires thought this was a good idea,” said Senator Warren.
In her final round of questions for the witnesses, Senator Warren underscored how these cuts will also funnel borrowers toward predatory lenders.
“They will get cheated by the student loan lenders that they're funneled to through. We already know that they're problematic because they're getting rid of the people who do the oversight…[I]t's money to be made off our vets… they also go after single moms,” said Senator Warren.
Ms. Bonni Snider, an Army veteran who was cheated by a for-profit college, testified that these cuts will have an impact that goes beyond party politics.
“I'm not a Democrat. I'm not a Republican. I'm not registered to vote…I think what they're doing to the Department of Education is abhorrent,” said Ms. Snider.
Senator Warren ended by emphasizing the need to make the investments necessary so a college education is available to everyone, regardless of class.
“No nation builds a strong future by short changing the education of its young people. We are here today because we believe in the future we can build, and we know that path is education,” concluded Senator Warren.
Transcript: Stealing the American Dream: How Trump and Republicans Are Raising Education Costs for Families
Senate Banking, Housing, and Urban Affairs Committee Spotlight Hearing
May 14, 2025
Round 1: Education Costs
Senator Elizabeth Warren: Everyone should have a shot at the American Dream, no matter their income, their race, their zip code, no matter what. For more than a century, it’s public education that has put that dream in reach for millions and millions of Americans. But the cost of college and other post-high school training programs has gotten way too high, and that has left millions of students with crushing student loan debt.
Instead of trying to help, Donald Trump and Republicans in Congress are pouring gasoline on the fire. At this very moment, they’re plotting another round of tax cuts for their billionaire buddies. And they want to pay for it by slashing investments in families that are just trying to build some security. Last month, Republicans on the House Education and Workforce Committee advanced one piece of Trump’s “big, beautiful bill.” The Republican plan?
Cut Pell grants that help working-class families pay for college; jack up monthly payments for student loan borrowers; and stretch out how long it takes for borrowers to repay those loans by another 10 years.
So, Professor Glater, you’ve spent years studying the impact of student loan debt. How will the Republicans’ bill affect the typical borrower?
Professor Jonathan Glater, Professor of Law & Associate Dean of J.D. Curriculum and Teaching, UC Berkeley School of Law: In concrete terms, we found that a typical family of four with a college-graduate earning median income with average debt burden would have to pay almost $5,000 more per year. A separate estimate found that eliminating the subsidized loans that you mentioned would increase the typical borrower’s costs by $12,000 over a ten-year repayment period.
For many borrowers, these cost increases will be unsustainable and will force them to look for other lines of credit which will be more costly for them to pursue as a result.
Senator Warren: So, when you say ‘unsustainable,’ what you mean is they just can’t make the payments.
Professor Glater: Yes.
Senator Warren: So what do they end up doing in that case?
Professor Glater: Well, presumably, if they’re unable to make payments, they will fall into delinquency—even potentially into default—and will have to deal with the collections regime that we’ve already touched on.
Senator Warren: Alright. And we’re going to talk some more about what it means to fall into delinquency and what that does for people.
So here we are at a time when the cost of college is already too high for millions of students. Donald Trump and his Republican buddies in Congress are not lowering them. They are adding $400 a month on average for the families’ costs.
So, Ms. Aliche, you’re someone—I think you described in your testimony—you had over $50,000 in student loan debt after earning your master’s to become a preschool teacher. Woo hoo for preschool teachers! Good for you. Then, you became a personal finance educator who helps Americans navigate their debt loads.
Can you explain a little bit about what $400 added to the monthly bills of someone who’s trying to balance out student loan debt actually means?
Ms. Tiffany Aliche, Influencer: Yeah, I brought some of those stories with me. I asked them to share them. So, a woman named Shel reached out to me. She was able to graduate college with her bachelor's. She was able to get a job paying her $35,000 a year, but her student loan debt is $98,000. She's currently struggling to pay the $700 student loan debt bill that she has to pay monthly. So imagine adding another $400 to that. It's unimaginable and basically impossible.
Senator Warren: You know. So I appreciate your doing this. You know, Ms Aliche, your story is one of many. You've had other people write in. I've had other people write in. There are 43 million borrowers across America right now, and jacking up student loan debt not only hurts family by family by family—the fact that it affects so many people will have an impact on our entire economy, especially at a time when Trump's tariffs and chaos are going to push up prices for families, and many economists say are pushing our entire economy into a recession.
So Professor Glater, let me come back to you. How would Republicans' plans to raise costs for borrowers affect the American economy?
Professor Glater: So every borrower is different, and monthly payments will differ for each borrower, which makes an overall estimate difficult. But consider for a moment just the borrowers who are enrolled in the Biden administration SAVE plan, who are currently not paying anything at all. We expect that the average such borrower will begin having to pay several hundred dollars per month. There are 8 million of those borrowers. The aggregate impact will be in the tens of billions of dollars in one year alone.
Senator Warren: So we're talking about just basically sucking out tens of billions of dollars out of this economy. So for every economist right now who's looking at the projections as a consequence of the tariffs; as a consequence of laying off federal workers; as a consequence of cutting grant programs and research funding; as a consequence of defunding much of the climate work right now; every economist who's looking at those impacts on the economy should add to it what Donald Trump and the Republicans are trying to do to student loan debt, because it's going to suck even more money out of the economy, put potentially 43 million families on average paying another $400 out of pocket.
All right, this is an economic disaster. It is hard for students themselves, hard for their families, but hard for our whole economy. And all of this is self-inflicted. The only reason the Republicans are pushing this is so that they can fund tax cuts for a handful of billionaires and millionaires. So this really is the kind of choice we make as Americans. And the Republicans say it is more important to favor those handful of billionaires over millions of students whose only sin was to try to get an education, and that's what this hearing is about today. It's about telling our stories, and it's about fighting back.
Round 2: Efficiency at the Department of Education
Senator Warren: I want to talk some more about Trump, Elon Musk, and Secretary McMahon—three billionaires who are going to rewrite public education and access to post high school education. They are dismantling the Department of Education, and the entire claim is that they are doing it for efficiency. They want a more efficient system. In fact, Secretary McMahon has said that she can fire half of the staff at the Department of Education without programs “falling through the cracks.” Get rid of half the people, and the programs won't fall through the cracks.
Now look, most Americans think that doesn't pass the smell test. This is not likely to work. Remember, these are the federal workers who run the financial aid programs for working class families. These are the workers who make sure that students with disabilities actually have someone to help them so they can be part of the educational system. But Secretary McMahon keeps on repeating this argument, so I want to spend some time today just testing it out a little bit.
Now, the first place to go to test it is with DOGE, because DOGE has already said she's wrong. They have admitted this because they've said service will get worse with these cuts. According to a recent report, a DOGE staffer at the Department of Education, said, and I quote, “I understand there has been significant work done to improve customer service at the Department of Education. However, we need now to let go of the Cadillac service and opt for the Toyota.”
So let's just take a quick look at that. Ms. Aliche, you work with people every day who are trying to deal with student loan debt. You're an advisor and a finance educator. Do you think that Americans, before the cuts, are getting Cadillac treatment from the Department of Education?
Ms. Aliche: No. In fact, I think the Cadillac can be qualified as a lemon. So I stand before you representing 2 million women, mostly, in this country, and one of them, LaShawn, she shared that her current student loan repayments are $2,000 a month—more than her mortgage. She is drowning, and she's been doing everything to try to lower that. She's been on hold for hours at a time, has not been able to reach anyone, when it comes to her servicer, she's emailed, she's filled out forms online. She is drowning, and so much so that her youngest daughter is ready to start college, and instead of being excited for her, she's afraid because she doesn't know how she's going to be able to afford that, right?
Senator Warren: So Ms Latreille, until recently, you were a top ranking official at the Education Department. Elon Musk has cut federal student aid staffing by 20%. Reportedly, DOGE wants to cut the department's budget for student loan servicing, that's what we're talking about here, by 60%.
So will cutting the budget for student loan servicing by 60% increase efficiency at the Department of Education?
Ms. Bonnie Latreille, Former Student Loan Ombudsman, U.S. Department of Education: As you can hear from the laughing, I think everyone in this room knows absolutely not.
Senator Warren: Absolutely not. Say a bit more about what's going to be the impact of a 60% cut, or even a 20% cut.
Ms. Aliche has given us kind of the where it starts, right, how much people were already struggling to get help when they had a problem with their student loans.
Ms. Latreille: Yeah, FSA was already understaffed and underfunded, and these cuts are just going to make things worse—longer hold times, longer timelines to get answers from their complaints, less—or currently, no—oversight of the student loan servicers that take their money each month.
Senator Warren: Yeah, that one is a stunner, isn't it? I just want to make sure everybody's following this: the student loan servicers have been repeatedly, repeatedly found to have misrepresented to students, misled students, failed to do the billing correctly. I mean, just the basics of what it takes to do alone, just over and over and over because they don't want to spend the money to do it. They have also been found, some of them, to have actually deliberately steered borrowers into the wrong programs because it made more money for the servicer than the program that was best for the borrower.
So this stuff is all documented. It's been out there for a long time, and that was true when they at least had some oversight. And the current plan now, in fact, what they've done, is you were just saying, Ms Latreille, what's happened to the people who are overseeing the student loan servicers?
Ms. Latreille: They've all been fired.
Senator Warren: Yes, they've all been fired. So I hope everyone's feeling better now. I'm sorry. Ms, Latreille, I interrupted you. Go ahead.
Ms. Latreille: President Trump and the DOGE team have created a race to the bottom among the student loan servicers, and the only people that suffer from that are student loan borrowers.
Senator Warren: Okay, so that's what we're talking about here. You cut the staff, and you get rid of the people who do oversight. And what was already a problem, a bad problem in student loan servicing, becomes worse.
Now, Linda McMahon says she has a solution for that, and that is, she's considering replacing the call centers where your friend or the person who had consulted with you was on the phone—did you say four hours?
Ms. Aliche: She said, just for hours and hours and hours.
Senator Warren: She wants to replace those call centers, or is considering replacing those call centers with AI chat bots, so instead of having financial aid experts reviewing complaints and responding to borrowers. She wants ChatGPT to do the job.
Ms Snider, let me let you take this one. You are a student loan borrower for many years. I think a veteran is the right person to take this one on. If you had a problem with your loans, for example, the loan shows up twice in your credit report. Would you want an AI chat bot to respond rather than a real person?
Ms. Bonni Snider, Veteran, U.S. Army: Absolutely not.
Senator Warren: Why not?
Ms. Snider: You know, I hear this analogy between we want to give Cadillac service, but it's a Toyota. In my opinion it is a skateboard with either broken or squared wheels. You know, to me, when I'm using or when I'm listening to an artificial being trying to answer a question, well, what if there's a question that I need to answer? This AI bot is not going to answer that question for me. Or what if the answer that I need is just a short, quick, you know, answer.
And what I find with, you know, being on the phone with the, you know, the ED officials, I think sometimes I'm on the phone longer than it takes for me to get my issue resolved, and a lot of times the issue is never resolved. And so, yeah, no, I'm not for AI at all. I think it's ridiculous.
Senator Warren: You know, I just want to say about this to remind everyone, anyone who has never been through student loan hell—and I'm going to assume that's not Donald Trump, not Elon Musk and not Linda McMahon—that the consequences of not getting good advice when you're having a problem with your student loan can be enormous. It can mean being put in the wrong loan program, which can cost not just thousands of dollars, but literally tens of thousands of dollars.
It can mean not getting a program you can manage and make your monthly payments every month, and instead, you fall into default, and from there, your problems just snowball so your credit rating goes to hell, and then everything is more expensive—harder to rent an apartment, impossible to take out a mortgage, more expensive to get a car loan, even your insurance can cost more because your credit rating has gone down.
So we're not just talking about inconvenience or even hours on the phone. We're really talking about the difference between people getting the help so that they just get what they're legally entitled to. People who say, I will do my best to pay my loan, but help me understand where it is. Fix the problem, you’ve failed to account for my latest payment. You've got me confused with somebody else. Trying to straighten out those problems. And no surprise, three billionaires don't think that is a part of the responsibility that running the student loan program is all about. The number of people who will get hurt by these decisions to make cuts at the Department of Education will be measured, ultimately, in the millions, and for some, they will never even know what went wrong.
All they will know is they can't put their lives back on track, all because three billionaires thought this was a good idea and would produce a little more money for tax cuts. For who? For the billionaires. So thank you on this.
Round 3: Bad Actors
Senator Warren: I think about who uses the student loan system. It's not the children of rich people. They do fine, right? They can afford to write a check. This is about people who have the dream and who want to make something out of it, they want to turn it into something. They've got a particular vision in mind. They want to be a teacher, or they want to be a counselor, as you did. They want to do a thing that's going to take this education, this training that they're going to get and we do it both ways with these changes at the Department of Education. Making the cuts at the Department of Education increases the odds that those who borrow money will get cheated.
They will get cheated by the student loan lenders that they're funneled to. We already know that they're problematic because they're getting rid of the people who do the oversight. They also will get cheated in a different way, and that is by making the barriers a little higher, some people will never make it across, and so they'll go to a private lender, and sometimes to a predatory private lender. And no matter what, to a private lender who is likely to cost them a lot more money.
And there's a third way they'll get cheated. They had the drive, they had the ambition, they had the smarts to do the work, but they just couldn't make it over the barrier. And so they never get the education that they'd hoped for, they never get the training that they'd hoped for. They never get that opportunity. So they are worse off. Their family is worse off, and our nation is worse off because one more person who would have been out there in the fight making their contributions, the person who—who knows what they might have invented, how they might have helped? That person has just been closed out of that part of the system.
That is part one of what's happening here, but the other part is loosening up the oversight of the colleges themselves. So it's about the lenders, but it's also about some of these colleges. Look, most of the colleges and universities out there, most of the apprenticeship programs, they're good programs. They are doing their very best for students. Some of our technical training in this country, some of the best in the world. They are doing a good job.
But there are others who figured out there is money to be made, and the money to be made is exactly as you describe it, Ms. Snider, it's money to be made off you. It's money to be made off our vets. They are the ones who are right in the crosshairs on where to go. And I want to say they also go after single moms, right? People who are—you're also a single mom. Thanks, Ms Snider. Yes, they go after single moms.
They advertise on the T in Boston: you want to try to do better for your children, this is how you can do it. And they get people in. They get them to sign on the dotted line. They get access to those federal dollars. They make a lot of money, and they leave people with student loan debt that they can't—they not only can't pay, they can't get out from underneath. It's not like your credit card debt. And you say, ‘okay, I declare bankruptcy. I'm done with all this.’ The answer is, nope. You got this student loan debt, most likely forever, until you pay this off.
So I really want to say one more time how much I appreciate having all four of you here and everybody in this room. I read your signs. I appreciate that you care and that you put your energy into this. I want to leave the last question for Ms. Snider. And I want to do this partly because Secretary McMahon said she wouldn't come today because she was sure she wouldn't get a fair hearing.
She wouldn't come because we were going to ask her about these cuts. If she had been here, I would have asked her, ‘How do you respond to this? Explain to me how you think you can cut 60% of your staff and programs that are already tottering won't just collapse and leave people with no help. Tell me how you can fire the people who engage in the oversight to make sure that people like Ms. Snider don't get cheated and still expect that they're not going to get cheated, they're going to get cheated more.’
So those are the questions I wanted to ask, and I'll just be blunt. She could have asked her own questions. I'd have been happy to have her here to ask whatever questions you wanted to ask, but she wanted to make in this letter to imply, to suggest, outright, this is all just political.
I want to finish this by asking you, I hope you don't mind my doing this, Ms. Snider. My staff have done some checking before when we first were inviting you. You're not a Democrat as I understand.
Ms. Snider: No ma’am, I’m not.
Senator Warren: She is not a Democrat. As I understand you're not even registered to vote.
Ms. Snider: That is correct, ma'am.
Senator Warren: So not somebody who's got a political stick in this, but somebody who's been directly affected by the past struggles of the Department of Education, and now looking at how the Department of Education is going to fire the team that makes sure that schools, lenders, and servicers don't take advantage of students. That's going to gut the team that monitors the scams, and then slash the office of the Ombudsman, which fielded hundreds of thousands of borrower complaints every year and help defrauded borrowers get rid of all that.
So tell me, as a not-Democrat, as a not-registered voter, not a political person, I think it would be fair to say, do you support President Trump and the Secretary of Education’s efforts to cut the Department of Education and its programs?
Ms. Snider: Absolutely not. And, you know, and I think it was important, you know, to point out that I'm not a Democrat. I'm not a Republican. I'm not registered to vote. There's a story behind that, but that's a whole other story. And so it was important, again, to highlight this is not a partisan issue. It is not just people like me who don't subscribe to either political party. I have Republican friends who are in the same issue. I have Democratic friends who feel this thing too. I have friends who identify as Independent who still—I think what they're doing to the Department of Education is abhorrent. This is madness and so no, absolutely not.
Senator Warren: Thank you very much. I appreciate that.
Closing Remarks
Senator Warren: Thank you, Senator Klobuchar, I'll get everybody signed off on these forms. Thank you for being here, Senator Kaine. Again, thank all of you. I'm grateful to all of you for helping us put energy into this. We cannot roll over and just let this happen. There are a lot of people who don't understand what the Department of Education does and why it is so essential to our future. No nation builds a strong future by short changing the education of its young people. We are here today because we believe in the future we can build, and we know that path is education. So thank you all for being with us. This hearing is closed.
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