Budget seeks end to subsidized student loans, forgiveness
- Author: Zachary Reyes May 24, 2017,
May 24, 2017, 13:00
Under the Trump's plan, graduate students would have to pay 12.5% of their salaries for 30 years - a significant burden compared to the current Obama administration plan, under which they pay 10% of their income for just 25 years.
"This budget makes an historic investment in America's students", DeVos said. "The Student Loan Debt Relief Act takes an important step forward by giving young people a better opportunity to work towards financial security". "Even more, the DeVos Department of Education has also rolled back requirements for student loan servicers to help borrowers enroll in these programs, which will make it all the more hard for borrowers to take advantage of income-driven repayment regardless of the terms of the program they want to enroll in". But it seems possible the administration might try to restructure income-based repayment on its own, given that President Obama took unilateral action to expand the program.
"It increases the monthly payments for the most financially vulnerable borrowers who can now enroll in programs like Pay As You Earn, while also eliminating Public Service Loan Forgiveness, the most generous of any loan forgiveness programs offered by the Department", Thompson said in a statement.
Helping low-income, first-generation and other disadvantaged students prepare for and complete college.
President Trump proposes creating a single plan for everyone.
Though the proposals would mean increased payments for graduate students, it's less obvious what it would mean for undergraduates, who make up the vast majority of student loan borrowers.
"Students and recent graduates often face difficult financial hardship paying for their student loans with entry level jobs". But, undergraduate students would see their remaining debt forgiven after 10 years rather than the current 15. As part of that contract, the department would get rid of mandates that help ensure borrowers are enrolled in income-driven repayment plans, such as reminding borrowers to enroll in those plans before the deadline, according to The Washington Post. The proposal also makes serious cuts to the federal work-study program.
Currently, both undergraduate and graduate students are eligible for Work Study jobs.
"Looking at the budget, it's pretty clear that the Trump administration is trying to help undergraduates", said Alexander Holt, an independent education consultant in Washington, D.C.
Pell Grants are awarded to undergraduate students from the lowest-income families.
James Runcie, the chief operating officer of the Office of Federal Student Aid, provided those figures in a court filing that was part of an ongoing legal dispute over the awarding of new debt collection contracts past year.
It maintains funding for Pell grants and makes them available year-round.
The Education Department said Tuesday the hundreds of thousands of doctors, lawyers, teachers and social workers on track for a form of student loan forgiveness will not be affected by President Donald Trump's proposal to get rid of the benefit.