NEW IDEAS FOR A GROWING PROBLEM
Capping Student Loans
Speaking at an October conference held in Columbus, Ohio, Trump said that his proposed solution to student debt is to cap all annual student loan repayments at just 12.5% of income. He also suggested that after fifteen years have passed since your graduation, any student loan left outstanding would be written off, allowing you to live free from student debt.
Today, the federal government plays a large part in the distribution of student loans. However, under Trump, many believe that loan servicers and lenders in the private sector are going to have a greater role to play. Just a short time ago, the Consumer Financial Protection Bureau joined two state attorneys in suing Navient, the largest servicer of student loans in the U.S. Under the Obama administration, students were given more options to pay off their debt with the option for debt forgiveness after 20-25 years. However, Navient is being accused of keeping many lenders in the dark about such repayment and forgiveness opportunities.
Effect of Student Debt
College costs are constantly rising, but government grants and financial aid are still no more readily available, despite the financial pressures of attending college. Even with an online program such as this masters in taxation online, it can be difficult for students who’ve not yet been able to begin pursuing their career to afford tuition fees. This means that more students need to borrow larger amounts of money in order to study, often graduating hundreds of thousands of dollars in debt and having to postpone further life goals such as buying a house or getting married as a result. Trump’s suggestions for student loans would make repayments easier to manage and allow graduates to get on with their lives.
Pay with Your Time
If you’re worried about being unable to pay off your student debt in the future, you may be able to easily work off your debt through community service in the future. Trump’s connections with the private sector will allow him to seek out employers who will take on volunteers for a short amount of time per month, which will result in student debt reduction. Such programs are already available on a limited basis. Along with this, many employers are willing to help graduates pay off their student loans. Promoting this is a great way for the new President to tackle this important issue facing the younger generation in particular.
Do you think that the new President will be able to improve the financial situation for students and graduates? We’d love to hear from you in the comments.