It's everyone's favorite time that comes only once every few years, and no, I'm not talking about February 29. It's finally election season and the race for America's top dog couldn't be more exciting. Even though it may not be the issue to sway your vote, one of the bigger topics that has been dominating the conversation is the problem of student loan debt in America. The amount of outstanding student debt has already toppled $1.67 trillion and doesn't seem to be slowing down anytime soon. So, let's take a look at what President Trump plans to do about the current debt problem.
President Trump's Plan for Student Loans
Updated Income-Driven Repayment Program
Trump has proposed revamping the entire income driven repayment (IDR) program currently used for federal loans. At the moment, there are 4 different IDR plans and knowing which one you're eligible for can be confusing. The new proposed system will change the current rule of paying 10% to 20% of your income for up to 20 years. Under Trump's new proposal, every plan would pay 12.5% of their income for 15 years for undergraduates. Loans would not be forgiven until 30 years for graduate student loans.
Changing the Public Student Loan Forgiveness Program
The Public Student Loan Forgiveness (PSLF) program allows those working in the certain roles to have their student loans forgiven. For certain workers who make income driven payments for 10 years, they can currently have their loans forgiven after those 10 years. Trump's current plan is to remove this program entirely and integrate it into the new income driven repayment program.
Trump's Plan Subsidized Loans
Trump has also called for an end to all subsidized loans. These are loans that a person can take out that don't accrue interest while they are in school. This means that their balance isn't growing while they're completing their degree. Trump's proposal to end this would mean all federal loans would accrue interest, no matter if you are still in school or not.
Limiting the amount that can be borrowed
Trump has also proposed a cap on the amount of loans that can be taken out by a person. Currently, most students can take out loans up to the estimated cost of attendance for their degree. President Trump's new proposal would limit Graduate PLUS loans to $50,000 a year and $100,000 total. It would also limit the amount taken out under Parent PLUS loan programs.
President Trump currently has a lot of plans to change the current student loan system. He wants to consolidate the confusing income driven repayment program while also setting limits on borrowing. These changes could mean a lot for students currently in school, so it's important to see how they could affect you.
