With a new administration in the White House comes the potential for big changes to federal student loan policy. While Trump hasn't unveiled any plans yet, he did make big promises on the campaign trail.
But do borrowers want what Trump is offering? And do they expect any change to actually happen over the next four years? A new survey from Student Loan Hero brings light to some of these questions.
President Trump's Plans for Dealing With the Student Loan Crisis
During his presidential campaign, Trump proposed major changes to student loans. One of the biggest shifts he suggested was changing the rules surrounding student loan repayment.
Currently, borrowers who qualify for federal income-driven repayment (IDR) plans such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE) can have their monthly payments capped at 10 to 20% of their discretionary income. After 20 to 25 years, depending on the specific plan, any remaining student loan debt is discharged (borrowers must still pay taxes on the forgiven debt).
Trump proposed capping student loan payments at 12.5% of discretionary income for all student loan borrowers, including those with private loans. The government would also forgive student loan debt for all borrowers after 15 years of consistent repayment. This would not only make income-driven repayment a possibility for all student loan borrowers, but also result in significant interest savings thanks to a shorter forgiveness timeline.
President Trump has also stated an interest in minimizing the government's role in student lending and shifting toward greater privatization. Private banks would step in as the primary lenders of student loans, rather than the federal government. To qualify for a loan, students would have to prove they have high future earning potential.