Donald Trump’s Proposed Budget Would Eliminate Popular Student Loan Forgiveness Program
Donald Trump’s proposed budget would eliminate a popular student loan forgiveness program, a measure that has drawn pushback from critics.
The president on Monday released his budget proposal for 2021, which included deep cuts to programs aimed at helping student loan borrowers, CNBC reported. The plan cuts student loan spending by $170 billion and adds annual and lifetime loan limits for graduate students and an end to the government subsidizing interest for borrowers who are still in school or facing economic hardship.
Trump also proposes eliminating a loan forgiveness program that allows federal student loans to be canceled after 10 years of on-time payments.
The proposal was met with harsh criticism by education experts. Mark Kantrowitz, an expert on higher education policy, told CNBC that the proposal is the latest move from the Trump administration to make it difficult for borrowers.
“This just takes it further,” he said.
The student loan forgiveness program itself has been met with controversy, CNN noted. When the plan was put in place by George W. Bush in 2007, Congress did not make all federal student loans available, which some borrowers did not find out for several years. The American Federation of Teachers has also sued the Department of Education, claiming that the program was mismanaged.
And despite estimates that one-quarter of American workers could be eligible, the program itself has been little utilized, CNN noted.
“Just about 1% of the 110,000 people who have applied for forgiveness had successfully received debt relief as of September, according to Department data.”
The budget proposal would put Trump in stark contrast to his Democratic challengers. As CNBC noted, some leading Democrats in the 2020 race have vowed to cancel outstanding student loan debt as an economic stimulus. Vermont Senator Bernie Sanders has proposed eliminating the entire $1.6 trillion student loan debt, while Massachusetts Senator Elizabeth Warren would cancel $50,000 in student loan debt for borrowers with a household income below $100,000, with more gradual reductions for those making more than that amount.
Experts say there is also little chance of Trump’s proposal going through. Congress has also acted in favor of the program, and largely ignored many of Trump’s more controversial budget proposals — dating back even to when Republicans controlled the House in the first two years of his term. Republicans refused to fund Trump’s proposals to build a wall at the U.S.-Mexico border, which eventually set up a showdown when Trump engineered a federal government shutdown in a bid to get the funding.
