For 43 million student loan borrowers in the U.S., how they cast their votes on November 8 may depend on each presidential candidate’s stance on one of the nation’s most sensitive topics: the massive $1.3 trillion student debt crisis.
Hillary Clinton and Donald Trump take a number of radically different appraoches on the matter. And whoever ends up in the White House could create a seismic shift in the future of student lending. Especially for borrowers.
Here’s how both candidates propose to handle the student loan debt crisis (and make higher education more affordable) if they become the next President of the United States.
Where does Hillary Clinton stand on student loan debt?
Former First Lady, Secretary of State, and now Democratic nominee Hillary Clinton is advocating for free education, federal loan refinancing, and debt forgiveness options for Americans pursuing higher education.
She supports tuition-free college education for qualified students.
Some student loan borrowers may already qualify for subsidized federal loans if their financial needs are great.
But Clinton proposes to take that a step further. According to her campaign, families with a household income up to $125,000 will pay no tuition at in-state four-year public colleges and universities by 2021.
What’s more, under her administration, all community colleges in the U.S. will offer free tuition.
Clinton promises a low-interest refinancing policy for more borrowers.
The Democratic presidential candidate wants to offer borrowers the ability to refinance their student loan debt with current low-interest rates.
Clinton estimates this could offer debt relief to more than 25 million borrowers, according to her campaign website.
She’s a big advocate of income-based repayment and debt forgiveness.
Under Clinton’s proposed plan, nobody would have to put more than 10 percent of their monthly income towards their student loan debt.
Additionally, college debt will be forgiven after 20 years. Or, 10 years if a borrower works in the public interest.
Clinton says she’ll push to simplify, expand, and develop options for automatic enrollment in income-based repayment programs.
Check out Student Loan Hero’s income-based repayment calculator to see how enrollment could affect you.
Clinton looks to increase Pell Grant funding for students.
Pell Grants are currently used to help low- and middle-income students pay non-tuition expenses.
Clinton is offering to restore year-round Pell Grant funding. Students will have the financial support they need to take summer classes and complete their degree (without having to take out additional loans).
What are Donald Trump’s student loan debt proposals?
Republican presidential candidate and business mogul Donald Trump wants a near-complete privatization of student lending. Trump wants to remove the U.S. government from the equation and link loan eligibility to job prospects.
He wants to marginalize the government’s involvement in student lending.
In a FOX News town hall in Wisconsin earlier this year, Trump talked about reducing, if not eliminating, the Department of Education altogether.
“The Department of Education is massive and it can be largely eliminated,” Trump said. “Now you maybe want to have a little bit of, you know, tentacles out there, make sure everything — but largely we can eliminate the Department of Education.”
However, this U.S. government agency is currently in charge of handling all federal student loans for borrowers. Trump hasn’t said specifically what will happen to federal student loans if he becomes president.
Trump seeks a big shift towards total privatization of student loans.
With less federal government involvement in student lending, Trump is looking to make it a complete private enterprise.
Ultimately, they would restore that role to private banks.
“We think it should be marketplace and market driven,” Clovis said.
He’s looking to link student loan eligibility to borrowers’ earning potential.
Clovis also told Inside Higher Ed that once the federal government is no longer associated with student lending, it frees up banks and colleges to distribute loans to students based on their majors and future careers.
While this could help students who choose potentially high-earning professions, it could leave students pursuing other majors out in the cold.
Essentially, low-income borrowers with low future earning potential could be denied a student loan with the assumption that they might not be able to pay it back.
This could turn the current federal lending program — where all students are granted loans regardless of income or creditworthiness — completely upside-down.
How will you vote this November?
The average student loan debt owed by a graduate of the class of 2016 was $37,172.
While both candidates have stated they want to see the federal government profit less off student loans, they have vastly different strategies they wish to implement.
If Clinton becomes president, we could see a shift in federal student loans that further prioritizes helping borrowers who are financially strapped.
However, if Trump wins, the Department of Education’s relationship with lending would be minimized. What’s more, he wants to prioritize lending to borrowers who are likely to earn more money in the future.
How will you cast your vote in this election? What’s your take on how student loans are being addressed during this presidential race? Let us know your thoughts in the comments section below.
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