As President Trump officially announced his candidacy for re-election, many 2020 presidential candidates are making waves with their proposals to write off student loan debt and make college free.
Here is what you need to know.
Student loans: 2020 applicants
Some 2020 presidential candidates, including Trump, propose how to handle student loan debt, whether college should be free, and how pay off student loans faster. While this list does not include all presidential candidates, here is how some top candidates approach key issues related to higher education.
Elizabeth Warren (D-MA)
Elizabeth Warren is a United States Senator from Massachusetts.
Warren asked student loan debt to be canceled and for the college to be tuition-free:
Warren plans to introduce a law that would cancel student debt:
- Write off $ 50,000 in student loan debt for each person whose household income is less than $ 100,000.
- Offer substantial debt relief to every person with a household income between $ 100,000 and $ 250,000.
- No tax as income from student loan debt that has been written off.
- Also make private student loan debts eligible for cancellation.
- Streamline the student loan debt cancellation process by using data and income information already available to the federal government.
Warren also believes in a universal tuition-free university. Specifically, Warren’s plan for a universal free university would be: “Give every American the opportunity to attend a two or four year public college without paying a dime in tuition.” Warren proposes that the federal government and states divide tuition and fees, without impacting “financial aid or academic education as needed.”
Bernie Sanders (I-VT)
Bernie Sanders is a United States Senator from Vermont.
During his 2016 presidential campaign, Sanders proposed to make colleges tuition-free and debt-free. In 2016, he introduced a law – the College for All Act – that would make public colleges free for students.
Sanders thinks that:
- University should be free for some families earning less than $ 125,000 (University for All Act).
- Community college should be free for all students.
- Federal student loan interest rates should be lower and the federal government should not make a profit on student loans.
- Student loan refinancing should be revamped to help save money for more borrowers.
Pete Buttigieg (D-IN)
Pete Buttigieg is the mayor of South Bend, Indiana.
Buttigieg, who owes $ 130,000 in student loans, believes that:
- The cost of university should be lowered, but he does not believe in free university.
- Low-income families should attend “debt-free” public colleges (no student loan debt).
- The civil service loan exemption program should be improved, in particular by increasing the exemption limit for student loans for teachers.
- States should take a more active role in covering student tuition fees.
- There shouldn’t be blanket student loan debt forgiveness, given the cost.
- There should be more talk about canceling student debt, student loan refinancing and income-based reimbursement.
Kamala Harris (D-CA)
Kamala Harris is a United States Senator from California.
Harris thinks that:
- College is a fundamental right.
- The college should be debt free for the students.
- Harris supports the Debt Free Colleges Act.
Tulsi Gabbard (D-HI)
Tulsi Gabbard is a member of the United States Congress from Hawaii.
- Tuition fees should be eliminated at public four-year colleges and universities.
- The community college should also be tuition free.
Kirsten Gillibrand (D-NY)
Kirsten Gillibrand is an American senator from New York.
Gillibrand believes that:
Cory Booker (D-NJ)
Cory Booker is a United States Senator from New Jersey.
Booker thinks that:
- The university should be debt free for the students.
- The cancellation of public service loans, as well as the refinancing of student loans, should be extended to more borrowers.
- “Baby bonds” can serve as a college savings tool and help close the wealth gap in higher education.
Julián Castro (D-TX)
Julián Castro is the former Secretary of Housing and Urban Development (HUD).
- Public colleges, community colleges, technical schools, and vocational training programs should be tuition-free.
- Student loan borrowers should not make any monthly payments until they earn more than 2.5 times the federal poverty level, which is $ 64,375 for a household of four.
- Then, monthly student loan payments would be capped at 10% of a student borrower’s income above 2.5 times the poverty line. After 240 payments, including monthly payments of $ 0, the borrower would receive a student loan discount on the remaining balance, which would not be taxable to the borrower.
Amy Klobuchar (D-MN)
Amy Klobuchar is a United States Senator from Minnesota.
Klobuchar thinks that:
- Four-year colleges shouldn’t be free.
- However, the community college should be free.
- Borrowers should be able to refinance their student loans through the federal government and benefit from a lower interest rate.
Beto O’Rourke (D-TX)
Beto O’Rourke is a former member of the United States Congress from Texas.
O’Rourke thinks that:
- At least the first two years of state or community college should be free for students.
- The civil service loan exemption should be expanded, and those who serve their community after college should have access to the student loan exemption and perhaps should not have to borrow student debt.
Andrew Yang (D-NY)
Andrew Yang is an entrepreneur from New York.
Yang thinks that:
- A 10×10 student loan emancipation plan should provide student loan forgiveness to anyone who spends 10% of their salary for 10 years on repayment.
President Donald Trump
President Trump does not believe in canceling tuition-free or full-scale student loan debt, as Senator Warren is proposing. In his Budget 2020, Trump called for several goals, including:
- strike a balance between the needs of students and the interests of taxpayers
- ensure budgetary discipline in expenses
- reduce the federal government’s role in education
- reduce student loan debt
- increase the accountability of higher education institutions
- make higher education more affordable
- invest in technical and vocational training
Specifically, Trump believes that:
- Student loan exemption should be available to all borrowers for undergraduates and graduate student loans who participate in a single income-based repayment plan.
- Borrowers would pay 12.5% of their discretionary income and receive a student loan forgiveness on their federal student loans after 15 years and receive a student loan forgiveness on their federal graduate student loans after 25 years.
- The civil service loan forgiveness program is expected to be phased out, impacting borrowers who borrow a new student loan after July 1, 2020.
There are several key questions that candidates, lawmakers, policymakers, voters and political observers should consider as these student loan proposals become more comprehensive:
- Should the college be a “debt free” student loan and how would the cost be funded?
- Should college be free and how would the cost be funded?
- What is the right balance between the interests of students and taxpayers when it comes to student loans?
- Should Taxpayers Be Financially Responsible for Large-Scale Student Debt Cancellation?
- What is the right role for the federal government when it comes to providing student loans?
- What is the role of banks and financial services companies in providing federal student loans?
- Given the amount of overdue student loans, will the federal government begin to issue federal student loans?
- How will the federal government afford to refinance student loans?
- Should Federal Taxpayers Pay For Federal Student Loan Cancellations Through The Civil Service Loan Cancellation Program, Income-Based Payments And Similar Programs?
- Should colleges and universities be held financially responsible for the unpaid student loans of their graduates?
Student loan debt statistics
According to the latest student loan debt statistics, there are over 44 million borrowers who collectively owe $ 1.5 trillion in student debt. Today, according to personal finance site Make Lemonade, student loan debt is now the second highest category of consumer debt – just behind mortgages and higher than credit card debt and auto loans. . By 2023, 40% of student borrowers may default on their student loans.