Trump’s Budget is bad news for people taking out student loans.
For one, it eliminates the Public Service Loan Forgiveness Program, where loans were forgiven after 10 years, for those who work for the government or at nonprofits.
It also reduces income-driven repayment plans, from five plans to a single plan. People typically pay 10% of their incomes, but with the proposed budget, they would have to pay 12.5%.
It removes subsidized loans. Most students borrow subsidized loans, meaning they don’t get interest on loans while still in school. The new changes will only apply to those borrowing after July 1, 2019. It also plans to cut federal work study funding — the government has contributed just under $1 billion in the past, to this program, now it will provide $300 million in aid.
The Department of Education says the new student loan policies will save taxpayers $203 billion in the next 10 years and the Congressional Budget Office says savings will amount to $100 billion in the next ten years. But this is obviously at the expense of many programs that help eliminate student debt. The downgrading and slashes may be saving the government money, but at what overall cost?