Trump student loan plans Forum

[Anonymous User]

https://www.washingtonpost.com/local/ed ... 23c529ce16

The administration is also seeking to overhaul key elements of federal financial aid. The spending proposal would maintain funding for Pell Grants for students in financial need, but it would eliminate more than $700 million in Perkins loans for disadvantaged students; nearly halve the work-study program that helps students work their way through school, cutting $490 million; take a first step toward ending subsidized loans, for which the government pays interest while the borrower is in school; and end loan forgiveness for public servants.

The loan forgiveness program, enacted in 2007, was designed to encourage college graduates to pursue careers as social workers, teachers, public defenders or doctors in rural areas. There are at least 552,931 people on track to receive the benefit, with the first wave of forgiveness set for October. It’s unclear how the proposed elimination would affect those borrowers.

The administration also wants to replace five income-driven student loan repayment plans with a single plan.

That change would likely benefit many undergraduate borrowers, who currently can have the balance of their loan forgiven after paying 10 percent of their income for 20 years. Trump’s proposal — which makes good on a campaign promise — would raise the maximum payment to 12.5 percent of income, but shorten the payment period to 15 years.

The proposal is less sweet for borrowers who take out loans to earn advanced degrees. They currently pay monthly bills capped at 10 percent of income for 25 years. Under the new plan, they’d pay more (12.5 percent of income) for longer (30 years).

This is...bad, no?

[sadpandayolo]

Somebody tell me the pros and cons so I don't have to do the thinking

[potus]

"...end loan forgiveness for public servants" Does this affect LRAP?

[Quichelorraine]

If by "LRAP" you mean "PSLF," then yes; it ends it.

[Npret]

"...end loan forgiveness for public servants" Does this affect LRAP?

Many schools' plans depend on PSLF to forgive your loans and the only make the minimum payment under IBR.
Note no one has had loans forgiven under the plan yet. No idea if this is retroactive.

[Aristogeiton1]

Hurrah. More damage to the higher education system here in the US. What could go wrong?

[ballouttacontrol]

gonna go ahead and file this under things that congress will not pass or even bring to the floor

[JakeTappers]

Obviously, this seems disastrous for law students in public service, particularly those 5 years in who have made huge life decisions based on PSLF. It's hard to imagine there isn't a detrimental reliance argument for those who have, but, as many have discussed, the government doesn't care and no one knows if or how that argument could ever play out.

The bigger question might be, couldn't a democratic administration (god willing) simply reenact PSLF in a few years? Certainly would have some serious consequences for those whose 10 year mark comes in 2017-2020, but I can't imagine it not coming back once there is turnover--especially if you get a democrat in the vein of warren or bernie.

[Love With The Coco]

Hurrah. More damage to the higher education system here in the US. What could go wrong?

(College administrator)

[Quichelorraine]

Having lived through an election cycle and change of guarantees about things that will never happen, I'm not staking my livelihood on the idea that Congress won't do something stupid out of the goodness of its heart.

[Npret]

Hurrah. More damage to the higher education system here in the US. What could go wrong?

A lot.
Anyway we know that tuition is out of control because of the pass through from government to school through students. I don't know if this will make a difference in tuition.

[Npret]

gonna go ahead and file this under things that congress will not pass or even bring to the floor

The problem is what do you do if you are relying on loans or PSLF?

[Civilservant]

I'm about half way towards pslf eligibility, so I depend on its viability, though 5 more years of payments won't kill me... The issue is, will this go anywhere? Let's remember that the Obama administration wanted to effectively end pslf for post graduate students with a cap, but it didn't go anywhere.

[Desert Fox]

Worst case you keep paying for an extra 5 years. Sounds fair to me. Subsidizing a bunch of lawyers is a terrible waste of resources.

[Bluem_11]

Worst case you keep paying for an extra 5 years. Sounds fair to me. Subsidizing a bunch of lawyers is a terrible waste of resources.

Ya while the program has been nice to have, in reality it was meant for teachers/nurses, but it's been leaned on much more by law students, grad students etc.

[Npret]

Worst case you keep paying for an extra 5 years. Sounds fair to me. Subsidizing a bunch of lawyers is a terrible waste of resources.

Ya while the program has been nice to have, in reality it was meant for teachers/nurses, but it's been leaned on much more by law students, grad students etc.

How is it only an extra 5 years?

[wesker]

Worst case you keep paying for an extra 5 years. Sounds fair to me. Subsidizing a bunch of lawyers is a terrible waste of resources.

Ya while the program has been nice to have, in reality it was meant for teachers/nurses, but it's been leaned on much more by law students, grad students etc.

How is it only an extra 5 years?

It's not, it's for another 25 years...

"The proposal is less sweet for borrowers who take out loans to earn advanced degrees. They currently pay monthly bills capped at 10 percent of income for 25 years. Under the new plan, they’d pay more (12.5 percent of income) for longer (30 years)."

[Tiago Splitter]

Worst case you keep paying for an extra 5 years. Sounds fair to me. Subsidizing a bunch of lawyers is a terrible waste of resources.

Ya while the program has been nice to have, in reality it was meant for teachers/nurses, but it's been leaned on much more by law students, grad students etc.

How is it only an extra 5 years?

It's not, it's for another 25 years...

"The proposal is less sweet for borrowers who take out loans to earn advanced degrees. They currently pay monthly bills capped at 10 percent of income for 25 years. Under the new plan, they’d pay more (12.5 percent of income) for longer (30 years)."

That's another 5 years over IBR, 10 years over PAYE, and 20 years over PSLF.

[Npret]

Worst case you keep paying for an extra 5 years. Sounds fair to me. Subsidizing a bunch of lawyers is a terrible waste of resources.

Ya while the program has been nice to have, in reality it was meant for teachers/nurses, but it's been leaned on much more by law students, grad students etc.

How is it only an extra 5 years?

It's not, it's for another 25 years...

"The proposal is less sweet for borrowers who take out loans to earn advanced degrees. They currently pay monthly bills capped at 10 percent of income for 25 years. Under the new plan, they’d pay more (12.5 percent of income) for longer (30 years)."

That's another 5 years over IBR, 10 years over PAYE, and 20 years over PSLF.

Thank you!

[DougEvans789]

Realistically speaking, they have to grandfather in people currently relying on PSLF, right? Regardless of the program's merits, it seems really unfair to let people incur debt assuming it will be there and then get rid of the program before they can use it.

[Johann]

Realistically speaking, they have to grandfather in people currently relying on PSLF, right? Regardless of the program's merits, it seems really unfair to let people incur debt assuming it will be there and then get rid of the program before they can use it.

yeah, most likely. these bills likely arent going to gain traction. the reason the current ones were put in place is because people were just defaulting on their loans and daring the govt to come after them. the same thing will happen again. this is the most profitable route for the govt.

[Nebby]

Thankfully PSLF is statutory. The two largest professions benefitting from it are lawyers and doctors, and LJL at the thought of Congress ever passing something that royally fucks those two groups.

[Nebby]

Realistically speaking, they have to grandfather in people currently relying on PSLF, right? Regardless of the program's merits, it seems really unfair to let people incur debt assuming it will be there and then get rid of the program before they can use it.

Yes. Our promissory notes contain a term outlining PSLF. It's a condition subsequent and since the govt is acting in a commercial capacity by providing loans a court would likely find that the promissory note controls and the US would have to abide by its terms, which includes PSLF. That's my opinion.

[Impressionist]

People out of law school started on this are likely fine. Those in school now or who just accepted an offer believing this would be in place may be fucked if anything comes of this.

Obviously there are other long term plans to make PI feasible, but ofc 10y is the quickest and comes without the tax bomb at the end.

[encore1101]

Hurrah. More damage to the higher education system here in the US. What could go wrong?

Well, we could always resort to coal mining since that industry is apparently making a comeback.