The Trump administration has dismissed the federal government’s lawsuit against National Collegiate Student Loan Trusts, abandoning a $2.25 million proposed settlement that could have gone to harmed borrowers.

The Consumer Financial Protection Bureau filed a lawsuit in 2017 against the Trusts, which it described as a group of 15 “securitization trusts organized under Delaware law that acquire, pool, and securitize student loans, which they then service.”

The CFPB accused the Trusts of bringing improper debt collection lawsuits against private student loan borrowers, suing consumers for debts the Trusts couldn’t prove were owed and attempting to collect on debts after when they were legally allowed to do so.

More from Personal Finance:
Nearing retirement? These strategies can protect from tariff volatility
Experts see higher stagflation risks. Here’s what it means for your money
Should investors dump U.S. stocks for international equities? What experts think

The $2.25 million settlement between the government and Trusts was expected to go to impacted borrowers.

But the CFPB under President Donald Trump filed the voluntary dismissal last Friday.

The Trump administration has also moved to gut the CFPB, most recently attempting to terminate as many as 1,500 of the bureau’s 1,700 employees. A judge has stopped those cuts.

In February, the CFPB also dismissed its lawsuit against the Pennsylvania Higher Education Assistance Agency. The Bureau sued the student loan servicer in 2024, accusing it of illegally collecting on student debts that borrowers had discharged in bankruptcy and sending false information to credit reporting companies.

The CFPB and White House did not respond to a request for comment. Neither did the Pennsylvania Higher Education Assistance Agency or counsel for the National Collegiate Student Loan Trusts.

Investors have continued to pull money from so-called ESG funds in early 2025 amid an “intensifying” backlash fueled by President Trump’s “anti-climate agenda” and his administration’s policies targeting diversity, equity and inclusion initiatives, according to a new Morningstar report.

Also known as socially responsible, sustainable, impact or values-based investing, “environmental, social and governance” funds let people invest according to certain values like climate change or corporate diversity.

Investors withdrew $6.1 billion from ESG funds in the first three months of 2025, after yanking out $4.3 billion in Q4 2024, according to Morningstar.

More from Personal Finance:
Consumers are spending as trade wars raise recession risk
Where young adults are most likely to live with parents
Consumers making financial changes in response to tariffs

The exodus in Q1 marked the 10^th consecutive quarter of outflows.

“The continued loss of appetite among US investors for sustainable funds can be partly attributed to an anti-ESG backlash, which has intensified since the return of President Trump to the White House,” according to the report.

As of the end of Q1, U.S. investors held $330 billion in ESG funds, about 10% of the global total.

Even before Trump took office, persistently high interest rates weighed on performance in segments of the ESG market, like clean energy and other “green” stocks, according to Morningstar. Higher borrowing costs burden the renewables sector because the projects can be capital-intensive.

But Trump added additional pressure.

Within days of his inauguration, Trump announced the U.S. would withdraw from the Paris agreement, blocked subsidies for electric vehicles, pushed for more fossil-fuel production and started a “huge pushback” against DEI policies, Diana Iovanel, a senior markets economist at Capital Economics, wrote in a research note in March.

In late March, the Republican-led Securities and Exchange Commission stopped defending a climate-change disclosure rule in court. There’s also uncertainty about the fate of the Inflation Reduction Act, a historic climate change mitigation law signed by President Joe Biden.

Even before Trump’s second term began, at least 18 Republican-led states had adopted “anti-ESG legislation,” prompting some large asset managers to “pare back” their ESG efforts, Iovanel wrote.

Trump also signed an executive order to eliminate all DEI-related mandates and programs within the federal government, prompting major corporations like Walmart (WMT), Lowe’s (LOW) and Meta (META) to begin “scaling back their DEI commitments,” Morningstar wrote.

About 84% of individual investors in the U.S. are interested in sustainable investing, according to a 2024 Morgan Stanley survey. Roughly two thirds, 65%, of respondents said their interest had increased in the prior two years.

While critics deride it as “woke” capitalism, advocates say there’s a strong investment thesis for ESG.

Specifically, they argue that ESG investing positions investors for higher long-term returns because companies that adopt such practices are poised to be more resilient, and therefore more successful, than peers.

Private equity has historically been the playground of institutional investors, pensions, endowments and accredited investors — a group that includes high-net-worth and ultra-high-net-worth individuals, banks, financial firms and trusts. These investors are usually deemed financially sophisticated, capable of handling the risks and illiquidity inherent in long-term private market investments.

However, a recent push by the Securities and Exchange Commission to broaden the definition of an “accredited investor” has opened the door for retail investors to access PE.

This shift raises important questions: Are retail investors adequately prepared to take on the complexities and risks that come with investing in private equity? Do they understand that they may simply be targeted to fill capacity, often receiving fewer desirable opportunities compared to institutional players? 

The allure of private equity is considerable. A 2024 analysis from Bain & Company projects that private market assets will grow at more than twice the rate of public assets, reaching $60 trillion to $65 trillion globally by 2032. This explosive growth has understandably sparked a wave of interest among retail investors, many of whom are drawn to the promise of diversification and higher returns, especially after the volatility of traditional markets that occurred in 2022. 

However, the democratization of private equity comes with significant caveats.

Retail investors are often seen as a source of capacity for PE firms, providing capital that more sophisticated institutional investors may shun. These opportunities, frequently offered through vehicles like interval funds, are structured to mimic traditional mutual funds but with limited liquidity — often allowing withdrawals only quarterly, sometimes capping or suspending them entirely. While these structures may offer access to private markets, they often lack the exclusivity and prime opportunities reserved for institutional investors. 

Moreover, retail investors may find it challenging to navigate the full range of complexities that can accompany investment in private equity. Unlike public markets, private equity often operates in an opaque environment, with no requirement to disclose financials, operations or liabilities. This lack of transparency can leave retail investors in the dark about the true risks and performance of their investments.

Additionally, the illiquid nature of these non-correlated assets means investors may be prepared to wait years for an exit, with no guarantee of returns. What happens if a retail investor needs to liquidate their position during a market downturn? The options are limited, and the consequences can be severe.

The fear of missing out on alternative investments like private equity can be a powerful motivator, but it can also lead to poor decision-making. Retail investors may not fully appreciate the nuances of private equity, such as the higher fees, longer lock-up periods and limited liquidity. They may also underestimate the risks associated with investing in an industry that thrives on exclusivity and general sophistication. 

While institutional investors typically have the resources to conduct thorough due diligence and the ability to negotiate favorable terms, retail investors often rely on intermediaries who may not have their best interests at heart. This dynamic can result in retail investors being offered lower-tier opportunities, such as co-investments, or funds-of-funds, which may not deliver the same returns as direct investments in top-tier private equity funds. 

Further, the lack of regulatory oversight in private equity means retail investors must rely on their own judgment and the credibility of the firms they invest in. This can be a tall order for individuals without deep expertise or experience in what has historically shown itself to be a complex and opaque industry.