Trump’s Impact on Real Estate and Student Loans:
What Borrowers and Homebuyers Need to Know
Last Updated
March 14, 2025
Written By
Family First FCU
The Impact of the Trump Presidency on Student Loans and Real Estate
The Trump administration’s economic policies have shaken up the financial world, bringing both ups and downs for everyday Americans. Let’s take a look at how these changes have impacted things like student loans, and the real estate market:
How Trump’s Policies Affect Student Loans: What Borrowers Should Know
Trump’s impact on student loans has sparked mixed reactions, with some borrowers benefiting from the changes, while others remain anxious about the uncertain future and the long-term effects of his policies. Since taking office, there have been changes to federal student loan repayment plans, and with inflation on the rise, private loans are getting more expensive. At the same time, loan servicers now have fewer regulations. Which could mean more options but also more risks for borrowers.
One of the biggest concerns? Trump has floated the idea of eliminating the Department of Education, which would need approval from Congress but has still raised a lot of eyebrows. If that happens, programs like Pell Grants and other financial aid for low-income students could be at risk.
Regardless of where the student loan program ultimately resides, borrowers relying on Public Service Loan Forgiveness (PSLF) are facing an unpredictable future. The elimination of PSLF would especially impact students pursuing careers in education, healthcare, and government, as it offers crucial support to those who might otherwise be deterred by the burden of student loan debt.
PROS
- Potential benefits for some borrowers: Certain borrowers have benefitted from changes to student loan repayment plans which have made paying off loans a little easier for them.
- Increased opportunities for loan servicers: With fewer regulations, loan servicers have an opportunity to operate more freely, potentially improving efficiency and competition in the student loan market.
CONS:
- Uncertainty for borrowers: The uncertain future of student loan policies, especially with the potential elimination of PSLF and the proposed dismantling of the Department of Education, is causing unease among borrowers.
- Need-based aid programs at risk: If the Department of Education is eliminated, programs like Pell Grants could be at risk, disproportionately impacting low-income students who rely on this aid.
- Higher private loan costs: Rising inflation has made private loans more expensive, increasing the financial burden on borrowers.
- Potential loss of PSLF: The elimination of PSLF would severely impact students entering public service fields, making it harder for them to manage student loan debt and potentially limiting diversity in these sectors.
Trump’s Impact on the Real Estate Market: Housing Prices, Mortgages & Tariffs
Trump’s effect on real estate, much like rates and student loans, has been a mix of opportunities and challenges. On one hand, deregulation has made it easier for first-time homebuyers to qualify for mortgages. On the flip side, rising tariffs on construction materials have increased homebuilding costs, pushing housing demand and prices even higher, potentially making them more unattainable for new homeowners.
Trump has proposed various tariffs since his candidacy, including a universal 10 percent tariff and targeted tariffs on specific countries. These proposals are frequently adjusted, with current discussions focusing on 25 percent tariffs on goods from Canada and Mexico, as well as reciprocal tariffs on any nation imposing tariffs on U.S. goods. Some tariffs are already in place – including a 10 percent levy on Chinese imports and 25 percent on steel and aluminum. It’s important to stay up to date on these changes as they could change at any time. Since much of the lumber used in U.S. homebuilding comes from Canada, a 25 percent tariff on Canadian imports significantly raises costs. For example, a homebuilder purchasing $200,000 worth of Canadian lumber could face an additional $50,000 in costs which could potentially be passed onto consumers, which in turn would drive home prices up.
Higher construction and renovation costs, combined with rising tariffs, aren’t just making homes more expensive—they could also push up mortgage rates. As tariffs drive up prices and inflation, both short-term and long-term interest rates, including those tied to mortgages, can be affected. That means buyers could end up paying more not just for the home itself, but also for the loan to finance it.
PROS:
- Easier access for first-time homebuyers: Deregulation has made it easier for first-time homebuyers to qualify for mortgages, potentially helping more people enter the housing market.
- Increased competition among loan servicers: With fewer restrictions, mortgage lenders and loan servicers might compete harder for business, which could mean better deals for borrowers.
- Higher returns on mortgage-backed investments: If mortgage rates increase, investors in mortgage-backed securities may see higher returns.
CONS:
- Rising home prices: Tariffs on construction materials, particularly lumber, have driven up homebuilding costs, making homes more expensive and less attainable for first-time homebuyers.
- Uncertainty from fluctuating tariffs: Frequent changes in tariff proposals, including 25 percent tariffs on goods from Canada and Mexico, create instability and confusion in the real estate market.
- Higher construction and renovation costs: The increased costs of building materials due to tariffs make new construction and home renovations more expensive, contributing to higher overall housing prices.
- Reduced affordability: The combination of higher construction costs, rising home prices, and potentially increased mortgage rates could make housing less affordable for many buyers, but especially first-time homeowners.
- Impact on mortgage rates: As tariffs drive up prices and inflation, interest rates could increase and make borrowing more expensive.
Next Steps
The Trump administration’s economic policies have a significant impact on credit union members, especially, student loans, and real estate. Student loan changes have introduced both opportunities and uncertainties, with potential risks to essential programs like Pell Grants and Public Service Loan Forgiveness, which support low-income and public service sector students. At the same time, the real estate market has seen both ups and downs, first-time homebuyers have easier access to qualifying for a mortgage, while rising home prices and increased construction costs due to tariffs make homeownership less affordable.
Ultimately, these policies have created a complex economic landscape, bringing both opportunities for some and significant obstacles for others, especially in terms of affordability and long-term financial stability. Despite the uncertainties that this new presidential administration brings, Family First members can rely on us for guidance and help navigating potential financial challenges.
