Student loan debt is a hot button issue that’s playing a prominent role in the 2016 presidential campaign. Current presidential candidates nearly all have a position on student loan debt and student loan reform.
But where do they stand? How will your vote make an impact? Learn more about how 2016 presidential candidates plan to address growing student loan debt in the United States.
Hillary Clinton (D) – New College Compact
(Photo credit: Keith Kissel via Flickr Creative Commons)
Hillary Clinton is passionate about making education more affordable. Her student loan reform campaign, a $350 billion plan to make college cheaper called the New College Compact, clearly targets millennials and social media users.
How does your student loan debt make you feel? Tell us in 3 emojis or less.
— Hillary Clinton (@HillaryClinton) August 12, 2015
Clinton also posted an article on Medium, a popular publishing platform, outlining her student loan plan in detail. She writes, “College is supposed to help people achieve their dreams. But more and more, paying for college is actually pushing people’s dreams further out of reach.”
The primary tenets of Hillary Clinton’s student loan plan state:
- No student should have to borrow money for tuition to pay for public college.
- Schools will be more accountable to their students and control their costs.
- The federal government will not profit off of student loans and will increase its investment in higher education.
- States will also invest in higher education.
- Student loan borrowers will be able to refinance their debt at lower rates.
- Wants to make community college free.
Clinton plans to reach these goals through a variety of measures, working with local and federal governments to support students. Funds will come from capping deductions for top wage earners in the country.
Marco Rubio (R) – The Dynamic Repayment Act
(Photo credit: Gage Skidmore via Flickr Creative Commons)
Republican candidate Marco Rubio is no stranger to student loan debt. He borrowed — and paid off — $150,000 in student loans.
Rubio recently introduced a bipartisan bill to help with the current student loan debt crisis. He proposes federal loan borrowers be automatically enrolled in a repayment plan based on income. Borrowers would pay 10 percent of their earnings toward student loans each month, with payments taken directly from their paychecks. Payments would be capped at $10,000 annually. Those who opt out to prepay their loans could do so at no penalty.
Additionally, up to $57,500 in student loans would be eligible for forgiveness after 20 years. Loan balances exceeding that number would be forgiven after 30 years.
Bernie Sanders (D) – College for All Act
(Photo credit: Phil Roeder via Flickr Creative Commons)
Bernie Sanders hopes to eliminate tuition for four-year public colleges and universities completely. Currently, tuition at these schools amounts to $70 billion per year. Under Bernie Sanders’ student loan reform plan, the College for All Act, the federal government would cover 67 percent of this cost. States would be responsible for the remaining 33 percent.
A few more key points from the College for All Act in include:
- Student loan interest rates would be reduced to 2.32 percent.
- Borrowers would be able to refinance their loans based on current interest rates for students.
- Expand the work-study program for students.
- Impose a Robin Hood tax on Wall Street.
Sanders is looking to take money from Wall Street and put it back into education to help fund his tuition-free college plan.
Martin O’Malley (D) – Making College Debt Free For All Americans
(Photo credit: Karen Murphy via Flickr Creative Commons)
Martin O’Malley has plenty of experience with student loan debt as well. A few months ago, he shared the shocking admission that he and his wife borrowed a whopping $339,200 to pay for their children’s college tuition.
O’Malley’s student loan reform plan — Making College Debt Free For All Americans — will accomplish the following:
- Within five years, students will be able to attend public universities debt-free.
- Students will be able to refinance their student loans and base payments on income.
- Low- and middle-income borrowers enrolled in Income-Based Repayment would cap their payments at 10 percent of take-home pay.
- Put a freeze on tuition rates.
- Expand Pell Grants and the work-study program.
- Make childcare affordable on campus for students that need it.
What Other Presidential Candidates Say About Student Loan Debt
Donald Trump (R): It seems Donald Trump has no firm policy regarding student loan reform, though he has been outspoken about the burden of student loans. Trump has openly criticized the federal government for profiting off student loans, stating, “I think it’s terrible that one of the only profit centers we [the government] have is student loans.”
Ben Carson (R): Ben Carson’s views on student loan debt are a bit vague as well. His official website doesn’t provide any specific statements on student loans, though comments he’s made in the past shed some light on his beliefs.
In a February interview on Fox News, Carson insinuated that he’s against the free community college proposals. Instead, he spoke about the availability of Pell Grants for the poor to attend college, adding, “For those who are not poor, there is a four letter word that works extremely well, it’s called w-o-r-k, work.”
In another recent interview, Carson explained he believes high student loan interest rates are a problem. He proposed shifting the burden of paying interest charges to schools.
Jeb Bush (R): Jeb Bush wants to ease the student loan debt crisis by helping students access alternative methods of education that don’t require taking out massive student loans. He defends for-profit institutions as viable options, as well as promotes using technology to offer online degrees and classes.
Ted Cruz (R): Ted Cruz is an interesting case. He’s empathized with today’s student loan borrowers, sharing that he only recently paid off his $100,000 student loan bill, yet he voted last year to block a bill that would help student loan borrowers refinance their loans at a lower rate.
It’s unclear how Cruz would deal with the student loan crisis if he were in office, but history may offer a clue. In 2012, when Cruz was campaigning for a seat in the Senate, he proposed getting rid of the Department of Education altogether and having states deal with the funds instead.
Rand Paul (R): Rand Paul isn’t in favor of free education, but has made the controversial proposal that students be able to deduct the cost of their education over their working careers. Additionally, Paul proposed policy in 2012 that called for the elimination of the Department of Education and preserving Pell Grants at 2008 levels.
As the presidential race continues, more candidates will likely make statements regarding student loan debt and their plans for student loan reform. As a student loan borrower, you should keep tabs on what candidates are proposing so you can understand how future legislation will affect you and your debt.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.97%1||Undergrad & Graduate|
|2.47% – 6.99%3||Undergrad & Graduate|
|2.68% – 8.77%4||Undergrad & Graduate|
|3.24% – 6.66%2||Undergrad & Graduate|
|2.61% – 7.35%5||Undergrad & Graduate|
|3.01% – 9.75%6||Undergrad & Graduate|