HOW YOUR VOTE WILL AFFECT YOUR STUDENT LOAN
US student loan debt now runs to over 1.3 trillion dollars ($1,300,000,000,000.00) and includes around 43 million borrowers. Those are the type of mind boggling numbers that are hard for us normal folk to comprehend, and that get politicians worked up into a sweat.
It’s no wonder that the student loan debt crisis is becoming a major power chip in the upcoming presidential elections. President Obama’s Student Loan Forgiveness Act of 2012 goes some way to addressing many of the key issues of the loans crisis, but the problem continues to grow, and indeed worsen. According to MarketWatch, student debt is increasing by $2,726 every second.
The presidential elections have become a two horse race, and whoever is going to win will inherit one hell of a student loans headache. Before withdrawing himself as a candidate, Bernie Sanders had made the loan crisis a central part of his manifesto, and it’s no exaggeration to say that the problem will be a central issue in deciding who will become the next president.
So if your student loan could cast a vote where would its allegiance lie? Here we look at the probable impact on your student loan of a Clinton or Trump win.
Hillary Clinton on the student loan crisis:
“Education is the key to our young people achieving their dreams. It’s how we develop our talents and imagine different futures for ourselves. So any serious plan for America’s future must include a bold plan to put quality education – including college – within everyone’s reach, no matter how much money they have.” So states Hillary Clinton on her campaign website.
Clinton is placing college affordability at the forefront of her campaign. She traded political punches with her Democratic rival, Bernie Sanders early in the campaign, claiming that his plan to provide free public college to every American “doesn’t add up.”
And indeed, Clinton is not claiming to have a magical solution, there will be no such thing as a ‘free education’. She would introduce state controls with an obligation to keep tuition costs as low as possible while maintaining and improving college performance. She also advocates students working for ten hours per week to help finance their education.
She also plans to encourage those with student debt to refinance their loans at a lower rate of interest. In tandem with this measure, she will aim to to reduce general interest rates and give borrowers a three month moratorium on their federal student loan repayments. Clinton has also introduced a plan that supports ex-students in business start up ventures, allowing entrepreneurs a three year freeze on payments, without any interest being added.
Donald Trump on the student loan crisis:
Trump has been quoted as showing great empathy with American student borrowers, saying: “They can’t breathe, they’re scared, they’re so scared they have leveraged their entire life. One of the saddest things I see are college students that work so hard, that go to good colleges, they’re good students.”
Trump has been less specific on how he plans to come to the aid the growing number of student loan recipients. The Republican candidate plans to reveal more details later this month, but here is what we have been told so far.
Trump has called the present student loans framework ‘unfair’ through his Twitter account. He has accused the present government of profiting from student loan debt and promised, “we’re going to make it really good for the student”.
The Republican campaign team have hinted at limiting the government’s role in student lending, making colleges themselves take more responsibility and giving private banks a bigger role to play – in stark contrast to Obama’s original overhaul of the system in 2010. Republicans claim that Obama’s amendments have actually increased college costs while decreasing competition.
What it means for student borrowers:
Nothing is crystal clear yet, with Trump quoted as saying “everything is on the table” but there are certainly big differences in the likely strategies the Democrats or Republicans will employ. Trump would reduce the governmental role whereas Clinton would increase it. Clinton would look for more state investment whereas Trump would look for more involvement from the private banks.
Clinton plans to allow students from families earning $125,000 or less to attend a public university tuition-free and provide borrowers with a three-month moratorium on their student loans, allowing them to spend the time finding a manageable repayment program. Trump hasn’t matched that yet, but whatever his next move is later this month could prove to be crucial. One thing is for certain, whatever happens next, Aidnest will be bringing you all the news as it happens.
You can be sure that whoever becomes the next US President, we’ll continue helping borrowers find their best possible debt solutions.
Author: Jim Davies
Image courtesy of DonkeyHotey / Flickr