What would you do to eliminate your student loan debt? Just about anything? So would most millennials. In fact, in a survey sponsored by Splash Financial, 39% of respondents stated that they would be willing to spend a full week in jail if it meant wiping out their student loan debt, according to the New York Post
. Roughly the same amount claimed that they wouldn’t take paid time off from their job for a year.
Obviously, student loan debt would drive most people to do crazy things, and there is clearly a need for the student loan debt crisis to be addressed. That’s why Presidential candidates have given student loan debt a place on their platform, and it has been a hot topic for President Trump since before he took office.
As the Democratic nominee field whittles down, and candidates provide more details on their Presidential plans in order to garner votes, there is more to be said on the student loan debt debate. Additionally, President Trump released his budget earlier this month, calling for a decrease in funds to the U.S. Department of Education, which would inevitably impact student loan programming.
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With all of that: where does the issue of student loan debt
stand now? What is being done to address it? Is the student loan debt problem in this country really that big of an issue? Let’s explore.
Presidential Candidates on Student Loan Debt
As it stands now, Former Vice President Joe Biden has a slim lead over Senator Bernie Sanders with most delegates for this summer’s Democratic National Convention. Super Tuesday provided a clear picture of who the race to the Democratic nomination really belongs to, knocking out Mayor Pete Buttigieg, Senator Elizabeth Warren and Senator Amy Klobuchar.
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At this point, each candidate has at least a general plan in place to tackle rising college costs and crippling student loan debt.
Joe Biden (Democrat)
Former Vice President Joe Biden wants to continue the legacy of his old boss, President Barack Obama, by making community college tuition free
for all. He has also planned to increase the amount and reach of the Pell Grant program, to focus heavily on income-based repayment plans for borrowers and to provide $10,000 in student loan forgiveness for each year (up to five years) that an individual works in a designated public service job.
Bernie Sanders (Democrat)
With a significant lead over the other candidates, Senator Sanders platform could very well be the key issues Americans are comparing to Trump’s four-year record. Senator Sanders has proposed free tuition at all public colleges, universities, Historically Black Colleges and Universities (HBCUs), Minority Serving Institutions and trade schools. He also wants to cancel current student loan debt for all Americans and place a cap on student loan interest rates at 1.88%.
Bill Weld (Republican)
There is one Republican, the former Governor of Massachusetts, who is running against President Trump in the Primary Election. Weld supports allowing borrowers to declare bankruptcy on student loans, an expansion of the public service student loan forgiveness program, free community college for all and lowering student loan interest rates.
President Trump on Student Loan Debt
While most Democratic candidates want to expand upon Public Service Loan Forgiveness, the Trump Administration has proposed cutting the program entirely, according to Inside Higher Ed
. He has also suggested eliminating Supplemental Educational Opportunity Grant programs.
The Trump Administration proposing to cut the budget for the U.S. Department of Education is not surprising, as he has done so each presidential year; however, most of his ideas have been rejected by Congress, Inside Higher Ed
It’s safe to say that whatever the President has proposed cutting now – or in the past – will likely not be impacted by any real change as Congress works to ensure that cuts to education spending are at a minimum.
Student Loan Forgiveness Over the Next Decade
Shortly after the President released his annual budget in early February, the U.S. Government announced that it will forgive $207.4 billion in student loans over the next decade, according to The Wall Street Journal
. The bulk of this will help out borrowers who have attended graduate or professional school.
The Wall Street Journal
states that, “The CBO [Congressional Budget Office] projects the government will originate $1.05 trillion in new loans from 2020 to 2029. Much of that will end up in income-driven repayment plans, which set monthly payments as a share of a borrower’s income and then forgive balances that remain after 20 to 25 years, or 10 years for workers in public-sector jobs.”
As we make headway toward Election 2020, the fate of these programs and student loan forgiveness remains unseen. Americans may wake up on November 4 with a new President and the prospect of zero student loan debt to their name. Or, they could be faced with the elimination of student loan forgiveness
programs altogether. Whatever the case, borrowers can only wait, make their student loan payments on time, and educate themselves on ways to quickly and effectively pay off student loan debt.