President Donald Trump addressed the nation Tuesday evening in his highly anticipated first State of the Union.
The speech is an important time for the president to highlight the progress and successes of the past year, and outline top priorities moving forward. For Trump’s State of the Union, 23.1 million Americans tuned in, reported Variety.
Overall, Trump highlighted the strength of the U.S. economy and markets. But the president only touched on policies related to education, and didn’t mention student debt. Here’s exactly what the President said about educational policy in the State of the Union address — and what it could mean for American families and students.
Trump pointed to stock market growth as a boost to college savings
Trump’s State of the Union address touted the strength of the economy, pointing to key indicators like wages, employment rates, and stock market performance.
Specifically, the State of the Union pointed to the success of the business sector, and connected it to a greater ability for families to pay for college.
“The stock market has smashed one record after another, gaining $8 trillion in value,” Trump said. “That is great news for Americans’ 401(k), retirement, pension, and college savings accounts.”
The state of college savings and 529 accounts
Growing college funds are good news for students with parents saving up for higher education costs using 529 plans. Forty-one percent of U.S. families have 529 plans, according to a college savings survey from Fidelity Investments.
However, these funds will only grow if they are invested and given time to do so. But changes to 529 college accounts under the Tax Cuts and Jobs Act passed by Congress in December 2017 will make it easier for parents to pull out funds early.
Account holders can now withdraw up to $10,000 a year from 529 plans penalty free to pay for tuition and educational costs for students from kindergarten through 12th grade.
Secretary of Education Betsy DeVos spoke positively of the 529 changes in a December educational summit, according to nonprofit Education Week, while acknowledging the limitations of 529s:
“Anything that empowers parents and gives them more opportunities for their students is a good thing,” she said. “But it doesn’t address the needs of the parents who are from lower income [communities] and does not empower them in significant ways. So that has to continue to be an important consideration on our radar screen.”
Trump called for investments in vocational training
Trump’s State of the Union pointed to the recent tax reform as a major win of his first year in office. The president called for Congress and the nation to use these cuts to build a stronger workforce with trade schools and similar training programs.
“As tax cuts create new jobs, let us invest in workforce development and job training,” Trump said. “Let us open great vocational schools so our future workers can learn a craft and realize their full potential.”
DeVos issued her own statement Tuesday night in support of Trump’s State of the Union address.
“America must do better to prepare our students for success in the 21st century economy,” she said. “I join the president in calling on Congress to act in the best interest of students and expand access to more education pathways.”
The state of vocational and job training legislation
Trump has pushed for vocational programs in the past, signing an executive order in June 2017 to increase spending on apprenticeship programs to $200 million, according to the Associated Press.
And there are at least two bills that Congress worked on in 2017 that sought to boost job creation and training. One proposed a tax credit that would allow companies to write off the costs of on-the-job training, for example.
But it’s unclear what the results of the order or these proposals will be. And some Democratic leaders were critical of Trump’s push for vocational programs:
“Build new vocational schools?” tweeted House Democratic Leader Nancy Pelosi. “With what? Your FY18 budget cuts these programs and career technician education.”
Trump’s speech didn’t mention current college students or student debt
Overall, Trump’s speech didn’t focus much on educational policy or related issues. Viewers concerned about the burden of high college costs and student debt likely noted that the president failed to even mention them.
The lack of mention of student debt or college costs in Trump’s State of the Union is not a new trend, however.
His campaign platform included a call for student loan reform, including shortening the period to earn forgiveness. In practice, however, the Trump administration has done little to focus on student debt and help students pay for college.
Don’t hold your breath for Trump (or any politician) to help out with your student loans. Instead, take advantage of programs that already exist, such as income-driven repayment plans, to help ease the pressure of student debt.
Today’s students can also learn about federal student aid and choose from affordable colleges to keep up with costs, no matter whether they have a funded 529.
Lastly, concerned citizens can reach out to legislators about these issues, and track legislation surrounding the student loan debt crisis.
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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 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% 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.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
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.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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