Currently, 44.2 million of Americans suffer from some type of student debt, according to statistics from Student Loan Hero, a website that helps students organize, manage, and repay their loans. For the class of 2016, the average debt was $37,112, according to the website.
Many millennials are wondering what President-elect Donald Trump will do to tackle the student loan crisis once he’s in office. During a speech in Columbus, Ohio, in October, Trump called college debt an “albatross” around people’s necks.
He proposed a plan setting payments at 12.5 percent of income and forgiving balances after 15 years. Trump’s plan is similar to a program that is part of the Health Care and Education Reconciliation Act, which was signed into law by President Obama in 2010.
The act gave borrowers the ability to cap the amount they spend on loan repayment to 10 percent of their discretionary income, which is the income remaining after deduction of taxes after 20 years.
Political Science Chairperson and Professor Dr. Harvey Schantz said that Trump’s proposed plan is generous to students and is considered by many to be a more liberal plan.
“This is something that came out the campaign itself— a political necessity,” Schantz said. “Donald Trump needed student voters.”
Trump’s proposed plan would shorten the amount of time before student debt is forgiven and repaying student loans would be based on income, in turn, ensuring payments being more manageable.
“Is Donald Trump interested in re-privatizing the student loan industry? That’s a question that has come up,” Schantz said.
Theoretically, Trump would scale back the government’s role in student lending and bring back private banks and other financial institutions into the fold.
“The opinion on that is mixed—in any case it’d be hard to do,”Schantz said. “People are not sure as to what exactly he wants to do.”
Schantz said Trump has focused on a particular set of issues but student debt has not been a defining one, unlike Bernie Sanders and Hillary Clinton.
For college students, this is obviously an important issue and Donald Trump has shown himself to be more on the liberal side of the spectrum when it comes to student loan debt.
Schantz said Trump can possibly bring a different way of thinking on this issue, being an experienced businessman.
“He might look at ways to cut down on the increasing tuition cost that students have to pay,” Schantz said.
One way is to use the massive endowments that private universities have to offset tuition cost.
“He sees that it is not important only to guarantee students money to pay tuition but as a businessman he wants colleges to be more responsible with how they spend money,” Schantz said.
Right now, the 10-11 weeks between election day and inauguration day is what’s called a presidential transition period. It is a inter-party transition, a change from the Democratic Party to the Republican Party.
In 2017, there will be a unified-party government, which is when one party controls the three elected branches, and as of a result could make things easier for bills to pass through Congress.
“It shows you that (Trump) isn’t a down-the-line conservative but he rather picks and chooses his stance,” Schantz said.
Though fixing the student debt crisis hasn’t been a top policy goal of Trump’s as of now, it could be as he vies for possible re-election in 2020.
“People who are between the ages of 17-26 years-old are sometimes thought as ‘impressionable voters’,” Schantz said. There’s a belief that if you can win them over to your political party at this early age, they may hold on to their party loyalty possibly for life.
Schantz said that could be one way for the Republican Party to ensure loyalty for many decades to come.
“You could see a scenario where they use an attractive (student debt loan) plan to win some allegiance from younger voters,” Schantz said.
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