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.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 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 2.50% APR (with Auto Pay) to 7.27% 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 April 17, 2019, 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.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed 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.
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.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
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 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|