STUDENT LOAN DEBT - These 3 words may haunt you if you have an overwhelming student loan debt.
Instead of getting nervous, check out President-elect Donald Trump’s student loan forgiveness plan and know more about how you can get rid of your student loan debt.
Donald Trump’s Student Loan Forgiveness Plan
Trump wants to make 2 major changes to the current student loan forgiveness program. According to him, the changes are as follows:
- Borrowers have to pay 12.5% of their monthly income toward their student loan debt payment for 15 years.
- After 15 years of continuous payment, the remaining debt amount will be forgiven.
Compare Trump’s plan to the existing student loan forgiveness plan
President Obama’s student loan forgiveness program has the following provisions:
- Student loan borrowers have to pay 10% of their monthly income toward their student loan payment for 20 years.
- After 20 years, the remaining debt amount will be forgiven.
Other plans of Trump’s Student Loan Forgiveness Program
Let us find out the other changes that Mr. Trump wants to make in his student loan forgiveness plan:
- The federal government shouldn’t make money from the student loans
- Schools and universities must reduce high administrative fees to reduce tuition costs
- Reduce the funding for the Department of Education (DOE)
- Remove tax exemptions of schools that don’t provide cost-effective degree programs
- Banks and financial institutions will lend student loans and not the government
Effect of Trump’s student loan plan on students and borrowers
1. Loan repayment becomes easier for low-income workers
At present, low-income workers may find it difficult to repay their student loans due to the high interest rates.
Hence, low income workers may find it easy to repay their student loans.
2. College costs will go down
According to Donald Trump, the federal government would abolish tax exemptions on endowments if colleges don’t provide cost effective degree programs to students.
He also mentioned that universities and schools must reduce their tuition fees by lowering the gigantic administrative fees.
3. Borrowers could save more money
Trump has plans to cut the repayment term from 20 years to 15 years and increase the monthly payment from 10% to 12.5%. There is no doubt that student loan borrowers have to pay more under Trump’s student loan repayment program.
They can then use that money for other important financial needs.
Last thoughts
You’ll be more financially peaceful if you take charge of your own money. Don’t depend on others to help you in monetary crisis. Instead, make your plan, control your finances and try to solve financial issues yourself. If you can take charge of your money, your financial life won’t suffer any more.
