Trump proposes to mix the four income-driven repayment plans into one repayment plan. Biden proposes to possess all borrowers automatically enrolled in an income-driven repayment plan with the choice to cop out if they’d like. He also proposes borrowers making $25,000 or less per annum won’t owe any payments on their undergraduate federal student loans. These loans also won’t accrue any interest.
On Biden’s plan, anyone making over $25,000 can pay 5% of their discretionary income. Trump proposes that the payment be 12.5% of discretionary income. Biden’s proposal involves a 20-year repayment term, with forgiveness of the remaining debt. Trump proposes that the remaining balance be forgiven after 15 years for borrowers with just undergraduate loans, 30 years for borrowers with any grad student debt. With Biden’s plan, any student loan debt forgiven through the income-based repayment program won’t be taxed.
Trump has proposed to eliminate the general public service loan forgiveness program.
Biden proposes to stay public service loan forgiveness with some changes. For starters, federal borrowers working in schools, government and other non-profit settings would be automatically enrolled within the PSLF program.
Biden also proposes to supply $10,000 of undergraduate or grad student debt relief for every year of national or community service, for up to 5 years. Right now, forgiveness comes at the rear end after 10 years of qualifying payments.
Here are the other moves the Trump administration has made:
The government “shouldn’t be earning money on student loans”—the only fix to this would be to reduce the interest rate for federal loans moving forward
Drop the Public Service Loan Forgiveness program (in favor of placing all borrowers in a single IBR)
Push colleges to cut tuition by decreasing high administrative costs
Reduce federal regulations on colleges to decrease their compliance expenses so they can pass those additions along to students
Universities will be assumed to contribute all of their endowment money going forward on their students (rather than “hedge fund managers”) to hold tuition low and cut student debt or risk losing their federal tax breaks
Potential tax-exempt status for big university endowments if schools don’t start making their degrees extra affordable for students
If he does adjust the IDR program as he has recommended, those interested in Income-Driven Repayment plans would have a bigger monthly payment, Though forgiveness would happen sooner.
Here are the important questions:
Here are the important notable questions:
No specifying of tax implications on forgiven student loan amounts
No specifying of bankruptcy reforms
So how will this change your student loans going forward? What should you do concerning it?
Recommendations for Borrowers:
1) Trump is obviously in support of a single IBR program going forward, which will have a less forgiveness period than the version currently in place. If you’re not, it may be useful to wait and see what happens with Trump’s stated new variant before you enroll. The shorter forgiveness time may end up protecting your money on the long-term.
2) Be sure to stay current on your student loans payments and out of default status. This is necessary because, in history, new student loan programs have been more hard for those in default to enrolling in. Holding your loans in good standing is an excellent method to keep your opinions open going forward.
3) At this point, there is no true knowledge accessible regarding how Trump’s student loan policies will change private loans, if at all. It may be best to just to wait and see what develops. This may give a chance to take benefit of better choices in the near future.
Clearly, there are still questions in the minds of student loan borrowers regarding how Trump’s future policies will change them. Rest assured that as things develop, Student Loan Resolve intends to give student borrowers with the most up-to-date data and guidance.
Will Trump forgive my student loans?
While nothing is set, it looks like whatever program Trump implements will have an end of term Trump Student Loan forgiveness as a component. His most recent thinking is that forgiveness has to be after 15 years of payments.