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This election season has been insane and for anyone with student loans, you should be worried about how Donald Trump as President will impact your ability to pay back your loans.
The progress that President Barack Obama made fixing the student loan repayment process and forgiving student loans at the federal level will likely be reversed by Donald Trump – making it harder, more expensive, and loan forgiveness impossible for everyone who has student loans provided by the federal government.
During his 8 years in office Obama went to battle with private banks who were offering student loans at insane rates and completely banned private banks from the federal student loan lending process. He also created new regulations that created new ways for people to pay back their student loans and offered more reasonable payment plans for people with lower incomes.For many Millennial student loan payments will likely increase under Donald Trump.
Obama also went to battle with the for-profit universities and in June of 2016 made it possible for people to get their student loans completely eliminated if they could prove that the school they went to engaged in deceptive marketing and recruiting tactics. The Department of Education has already eliminated over $50 million in student loan debt from over 2,500 claims. But the problem is that these student loan eliminations are still just getting started and over 100,000 students have submitted claims.
The move to eliminate student loan debt and punish the for-profit Universities really upset the GOP and it would be really easy for Donald Trump to overturn these new policies, dismiss the student loan forgiveness claims, and eliminate the process to apply for student loan forgiveness. Traditionally conservative Senators, Congressmen, and leaders don’t believe that the government should be involved in student loans and higher education, and that largely it should be private banks who offer student loans.
This means that if Obama’s policies are overturned student loans rates will increase, more student loans will be offered by private banks, it will be harder to get your loans eliminated, and there will generally be less oversight over the entire student loan and for-profit education industry.
The only thing that Donald Trump has really said about student loans is that he will “consolidate” the student loan repayment plans that Obama created, he would cap the repayment rate at 12.5% of income, and that after 15 years of payments all loans would be forgiven – but has said nothing about interest rate reduction or the government’s future involvement in financing loans.
Donal Trump has only spoken on this topic once, back at a rally in mid October where he made what many people believe are incredibly unrealistic student loan recommendations that also likely wouldn’t make it through the Republican led Congress and Senate. The problem with this plan is that for many of us and other American families its too little too late. Many of us are already stuck paying high interest rates and under President Donald Trump we likely won’t find much student loan relief, but time will tell.