The average student loan balance climbs higher with each year’s graduating class. The current combined outstanding U.S. student debt at $1.3 trillion. It’s no wonder student debt was a key issue in the 2016 presidential election and will likely continue to be throughout Trump’s presidency.
What are student loan borrowers expecting during a Trump presidency? Our latest survey reveals what student loan borrowers hope for and expect from President Donald Trump over the next four years.
The student loan debt struggle
All the respondents in our survey had outstanding student loans — here’s how their balances broke down:
- 26 percent owe less than $10,000
- 19 percent owe $10,001 to $20,000
- 12 percent owe $20,001 to $30,000
- 10 percent owe $30,001 to $40,000
- 6 percent owe $40,001 to $50,000
- 19 percent owe more than $50,000
- 8 percent don’t know their student loan balance
Borrowers want student loan forgiveness after 15 years
The most popular student policy that borrowers hope to see implemented under Trump’s administration was “Federal loan forgiveness after 15 years.” Under this policy, borrowers would be forgiven any remaining balance after making 15 years’ worth of payments on their federal loans.
Presently, only borrowers on income-driven repayment plans are eligible for forgiveness after 20-25 years. Student loans may also be discharged after 10 years of qualifying payments under the Public Service Loan Forgiveness program. However, no national forgiveness program exists for all federal borrowers.
Respondents had the ability to select multiple policy changes; a federal program to refinance student loans was the second most popular choice, with nearly a third of respondents in support of this policy.
Borrowers responded similarly when asked to choose the single student loan policy they most hoped to see implemented. A third selected 15-year student loan forgiveness, making it the most popular student loan policy by 60 percent.
Bankruptcy discharge was the least-popular policy option in either question. But borrowers with higher balances were four times more likely to view this change more favorably, with 37 percent choosing it as their top student loan policy change.
Will Trump deliver what student loan borrowers are demanding?
If Trump follows through with the student loan policy he campaigned on, borrowers are likely to be happy.
Trump’s student loan plan has two parts. The first is a repayment plan with monthly payments capped at 12.5 percent of the borrower’s income. Additionally, Trump would apply this repayment schedule to both federal and private student loans. The survey findings show that a quarter (26 percent) of student loan borrowers support a new income-driven repayment option.
The second part includes the most popular policy. After 15 years of payments, the government would forgive the remaining balance on federal student loans. This is a policy that nearly half (44 percent) of respondents support.
By combining these popular policies, Trump’s plan touches on the most important student loan policies for nearly half of voters (52 percent). And it might provide relief when compared to current income-driven repayment plans, which promise forgiveness after 20-25 years of repayment.
Student loan borrowers pessimistic about a Trump administration
Trump’s initial plans might align with the student loan policies borrowers hope to see implemented, but not all borrowers are convinced a Trump administration will be good news for their debt.
For instance, 41 percent of respondents don’t think that the Trump administration will have a positive or negative effect on their student loans. An almost equal amount stated they believe the Trump administration would have either a “somewhat negative” or “very negative” effect on their student loans. Just 20 percent expect a positive effect on their student loans over the next four years.
Survey was conducted via Google Consumer Surveys on behalf of Student Loan Hero on January 6-9, 2017, with a nationally representative sample of 1,001 adults living in the United States and margin of error of 5.5%. “Do you have student loans?” was used as a screening question (with a target answer of “yes”).