With college costs spiraling out of control and Americans owing more student loans than ever before, college affordability and student loan debt reform are one of the hot-button topics among the 2020 presidential candidates.
There is a wide field of presidential candidates and a similarly wide variety of proposals, from tuition-free colleges to student loan forgiveness en masse. To keep track of it all, here’s our guide to the 2020 candidates and what they’re saying about the student debt crisis. Note that Donald Trump will be the Republican candidate, while Joe Biden and Bernie Sanders are competing for the Democratic Party’s nomination.
In a response to the coronavirus outbreak, the Trump administration announced a temporary freeze on federal student loan interest as of March 13. While borrowers must keep making payments, those payments would entirely go toward their principal balance. It’s not yet clear, however, whether the suspended student loan interest would be tacked onto borrowers’ balances at a later date.
Prior to that, the administration — including its leadership at the Department of Education, headed by Secretary of Education Betsy DeVos — had proposed various changes to student loan repayment and forgiveness, although most of these have failed to pass Congress.
Here’s what Republican standard bearer President Trump and his Cabinet did in addressing college costs and student loan debt reform prior to the coronavirus update, along with his proposals on the issue.
- Renewed the Carl D. Perkins Career and Technical Education Act, the main federal funding source for career and technical programs for high school and high school grads. By signing this bipartisan legislation, Trump allowed $1.2 billion per year to go to states in support of these programs.
- Called for more vocational schools in his 2018 State of the Union, along with increased investment in workforce development and job training.
- Eased student loan forgiveness for disabled veterans and removed tax liability on those discharged loans. Trump also called for states to waive state taxes on loans forgiven through “total and permanent disability discharge.”
- Eased regulations for for-profit colleges and challenged the borrower defense to repayment program, which cancels loans for students who were defrauded by for-profit colleges. After months of delay, a judge ruled that standing in the way of borrower defense was illegal and allowed the program to resume. Even after the ruling, however, the New York Times reported that the Department of Education had yet to approve any loan relief applications in the second half of 2018.
- Discussed a single income-driven repayment plan to replace the current plans, such as Income-Based Repayment and Pay As You Earn. Trump’s proposed plan would cap monthly payments at 12.5% of a borrower’s income and offer student loan forgiveness after 15 years for undergraduates and after 30 years for graduate students.
- Proposed repealing the Public Service Loan Forgiveness program. Trump’s 2017 and 2020 budget proposals both called for eliminating this loan forgiveness program, but this has yet to be taken up by Congress.
- Proposed eliminating subsidized loans, which don’t accrue interest during a grace period and are offered to low-income students.
- Outlined a funding cut of 10% to the Department of Education in the 2020 budget plan.
Joe Biden’s plan for higher education, which involves a $750 billion investment over 10 years. Here are some of his major proposals:
- Offer two years of tuition-free community college to students, both full-time and part-time, including DREAMers
- Supports making public colleges and universities tuition-free for students from families who make under $125,000
- Create a grant program that will help community colleges provide better outcomes for their students
- Support community college students by allowing them to use Pell Grants and other aid to cover living expenses, as well as incentivize community colleges to partner with local organizations to provide support services for students
- Invest $50 billion into workforce training, such as apprenticeships and community college business partnerships
- Channel $8 billion into community colleges to improve their facilities
- Double the value of Pell Grants and make them accessible to more Americans
- Simplify income-driven repayment plans, and allow student loan borrowers who make less than $25,000 to reduce their payments to $0 without accruing interest on their debt. Borrowers who make more than $25,000 annually would pay just 5% of their discretionary income (the current plans cap payments at 10% or more) and be eligible for forgiveness after 20 years.
- Simplify the Public Service Loan Forgiveness program and allow eligible borrowers to get $10,000 in forgiveness annually for up to five years
- Crack down on predatory for-profit schools and require that all institutions prove their value before accessing federal financial aid
- Increase investments in Historically Black Colleges and Universities and Minority-Serving Institutions
- Endorsed Sen. Elizabeth Warren’s proposal to bring back protections for student loan borrowers which would allow them to discharge student loan debt in bankruptcy.
After making waves in the 2016 election, Sen. Bernie Sanders, an independent running as a Democrat, is doing it again, proposing a total cancellation of student loan debt. And just as he did four years ago, Sanders is also calling attention to the need for college tuition reform, which he says can be solved with tuition-free public colleges and trade schools.
On his campaign website, Sanders says: “Today, we say to our young people that we want you to get the best education that you can, regardless of the income of your family. Good jobs require a good education. That is why we are going to make public colleges and universities tuition-free, and substantially lower the outrageous level of student debt that currently exists.”
To achieve this, he wants to:
- Cancel all outstanding U.S. student loans, totaling $1.56 trillion, regardless of borrowers’ income levels, a move which Sanders says would boost the economy by about $1 trillion over the next 10 years and create 1.6 million new jobs annually. He also says canceling student debt would give millions of Americans the resources they need to buy a home, purchase a car or start a small business.
- Eliminate tuition at public colleges, universities and trade schools
- Make college debt-free for all by expanding Pell Grants and requiring participating states and tribes to cover the cost of a degree for low-income students
- Cap student loan interest rates at 1.88%
- Increase funding for Historically Black Colleges and Universities (HBCUs).
- Provide three times as much funding for the federal work-study program
Sanders has a record of supporting the free college movement. In 2016, he proposed tuition-free college, which he said could be achieved through funding on both the federal and state level, as well as through a tax on investment houses, hedge funds and others involved in stock trades.
Previously, Sanders backed Hillary Clinton’s proposal to make college tuition-free for middle-class students and debt-free for all after she became the Democratic nominee. But Sanders’ College for All Act goes even further, covering the tuition for all students at public universities or community colleges.
Student Loan Hero will update this post as the candidates make new statements on student loan debt and related issues.