W. A. Finnegan, who used to help write Federal policies, wrote in his newsletter, The Long Memo, that because of Trump’s incompetence, every student loan is now “forgiven.”

Trump announced that the Small Business Association will take on student loans immediately as he attempts to dismantle the Department of Education. Of course, that really can’t happen, and if it does…

You agree to repay the loan under specific conditions. In exchange, the Department of Education agrees to disburse the funds, maintain servicing standards, and follow the law under the Higher Education Act of 1965.

Those terms are not flexible. They’re not vague. They’re not “up for reassignment” to whichever federal agency a rogue president feels like tossing them to this week.

The MPN allows your loan to be transferred between servicers—companies like MOHELA, Nelnet, Aidvantage—but those are just contracted agents of the Department of Education, not owners. You can’t be assigned to a totally different federal agency that has no statutory authority under the Higher Education Act. That would be like your mortgage getting transferred to the Parks Department.

If you suddenly find your loan managed by an agency not named in your contract, not authorized by Congress, and not subject to the same legal compliance regime, guess what?

That’s a breach. A big one.

And in contract law, a breach that goes to the heart of the agreement—like changing the party responsible for enforcement or management—is what courts call a material breach. That means the contract is no longer valid. And if it’s not valid, they can’t enforce it.

So yes, if Trump goes through with this, we’re talking about millions of legally unenforceable loans. Essentially, “loan forgiveness” for every student who ever signed the MPN, now, today, yesterday, and in the future. The government would lose its legal standing to collect. Servicers would be stuck in limbo. Every borrower would have a legitimate argument that the contract they signed is no longer binding—because the government breached first. And abrogation of responsibilities of a loan originator typically gives rise to making the entire debt unenforceable.

This isn’t just bad policy. It’s contractual suicide.

And that’s the funny part. Trump may have just accidentally forgiven the entire student loan system. Not through legislation. Not through executive mercy. But through everything, the Orangutan does, pure incompetence.

I’m sure this will get fixed, but maybe not.