Advocates slam Trump plan to reduce aid for college students

Owen Stevens
May 24, 2017

"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.

But the president's budget is never adopted by Congress in its entirety. October marks its 10th year, and the first time anyone will have made enough payments to get their debt wiped away. The median borrower in the forgiveness program has more than $60,000 in student loans, and nearly 30% have more than $100,000 in debt, according to a Brookings report.

Trump's proposed budget also includes $1 billion to boost school choice programs, $250 million for private school vouchers aimed at high-performing students from low-income families and $167 million to help create new charter schools.

Revamping the income-driven repayment plan is another way the proposed budget aims to help undergraduate students rather than those with advanced degrees.

The budget would also consolidate five income-driven repayment plans into one. They would pay a higher percentage of their income over a longer period of time. Last month, a U.S. Court of Federal Claims judge overseeing the case issued a restraining order preventing the government from assigning newly defaulted borrowers to debt collectors - a key step for those borrowers to eventually rehabilitate their loan debt.

The proposal would cap borrowers' payments at 12.5% of their discretionary income, which is higher than the 10% cap most have now.

The difference between offering forgiveness at 15 and 20 years can be drastic, said Holt. Both of them get jobs that pay $50,000 per year to start, and for purposes of this example, assume both remain in the same occupation for 20 years, receiving 2.5 percent raises every year.

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The revamp of the income-driven repayment plans would save the government $76.4 billion over 10 years.

The budget says the program is "poorly targeted" and needs to be reformed to "ensure funds go to undergraduate students who would benefit the most".

The Greenville County Schools Board of Trustees approved a almost $600 million budget Monday evening which includes a 2.3 mill tax increase.

But while most borrowers won't be greatly affected by the entity collecting their payments, another change to the system being considered by the Trump administration would have a very real effect on new student borrowers. It's tempting to assume that the person who pays more money over time is the loser, but that ignores the fact that someone with an additional $1,250 or more to spend every year could invest all or some of that money.

It maintains funding for Pell grants and makes them available year-round.

The elimination of the program would add thousands of dollars to the cost of attending college.

Former Education Secretary John King calls the budget "an assault on the American dream".

Other reports by VgToday

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