What Donald Trump and Hillary Clinton Mean for Your Student Loan Debt
As the election for the new President of the United States approaches, we are all getting to know the new candidates very well. Both Hillary Clinton and Donald Trump have made their names well known and you would be hard-pressed to find someone who does not know something about either of them.
When it comes to student loan debt, the world is always listening because we all want to know what can be done about the situation and how student loan debt can be reduced. If you don’t have any type of student loan debt, consider yourself very lucky because many, and we mean many, students DO have this debt looming over them.
Below, we will explore where each of the candidates stand on the matter and what you can expect if either of them is elected into office.
Donald Trump and Student Loan Debt
Students who want to elect Trump into office may not be as excited about his student loan plan as they initially thought they would be. Trump has not spoken too much about what he plans to do about growing student loan costs, but he has said that he wants to help.
But, what does “help” truly mean? Since the word help is such a relative term, it is important to fully understand what he means and HOW he plans to make it happen.
Unfortunately, in recent talks with Trump, he has stated that he wants to completely remove the government from the entire student loan system. Wait, what? This could be good or it could be bad. In fact, he wants to have private banks lend the money needed for school to college students.
In addition, he has stated that colleges will share much more of the risk than they previously did, which means when it comes to student loans, colleges would need to choose students who are more likely to graduate than take some classes and not finish their schooling.
While his plan has not been completely written in stone, it can spell out a lot of trouble for students who are considered low income, especially since he does not want the government involved in the student loan system anymore.
It is not secret that he has even gone as far as to say that the Department of Education should be eliminated, which means bye-bye to the Federal Pell Grant and federal financial aid.
When it comes to the current debt situation, Trump says he plans to do something with lowering the interest rates and offering extensions.
Hillary Clinton and Student Loan Debt
Hillary Clinton has been quite vocal about student loan debt and her plans to help students out. In fact, her proposed plan would help 25 million students who have student loan debt. Her plan in short is to provide $115 billion to student loan forgiveness.
Clinton plans to have an entire $350 billion student loan plan that is called the “New College Impact.” Basically, she wants to shorten the income-driven payment programs to 20 years to receive forgiveness, instead of the current plan, which is often 20 to 25 years, depending on the specific plan.
In addition, she wants to completely expand the income-driven repayment plans so that is will limit every single borrower to ONLY having to pay back 10 percent of their total disposable income.
You may be thinking just how this is going to be pulled off in the long run, but Clinton does have a plan for that. In fact, she plans to rely on refinancing of student loans to help cut down the interest rates that students are paying and she wants to collapse the income-driven repayment plans into a single plan that allows more students to enroll in it and qualify for it.
In theory, Clinton believes that every student who has some type of student loan debt should be able to refinance it and receive a lower interest rate. Since high interest rates are often a killer and can result in a loan costing double the initial amount, this is a beneficial and helpful move.
Fortunately, Hillary’s plan will allow BOTH private student loan holders and federal student loan holders to receive the benefits.
While a rework of the system solves one problem, what about the actual loan lenders? Hillary has a plan for that as well. In fact, she wants to hold the lenders more accountable for their loans and the plan will help improve the ease of enrolling in different programs, offer counseling for borrowers, put strict rules on debt collectors, and help those students who are delinquent or in default.
Final Thoughts on Student Loan Debt and the 2016 Presidential Candidates
It is true that something NEEDS to be done when it comes to student loan debt, but is there really a plan that can help? Under Trump’s plan, students who are considered low income or those who cannot afford college or qualify for a private loan will find themselves unable to go to college in most cases.
This is disheartening and will unlikely even ever come to fruition, so you do not have to panic much. If it did happen though, it would be devastating for many students who do rely on the Federal Pell Grant and federal student loans.
Under Hillary’s plan, students will receive some relief. While the plan may not benefit all, it does help to target those students who are struggling already to pay their student loan debt down. Many of these struggling students may even receive and qualify for loan forgiveness.
There is no one plan that will solve everything, but there are some plans that are more detailed and helpful than others. In this instance, Hillary’s plan will prevail over Trump’s plan, but that does not mean it will actually work either. Students will have to simply wait and see how everything unfolds and until then, keep making their payments to their student loan lenders.