Trump and DeVos Plan To Reshape Higher Education Finance. Here’s What It Might Mean For You.
"Budget documents obtained by The Washington Post show President Trump’s administration is proposing a raft of changes that could have significant impact on college students and graduates," The Washington Post reports
"One of the most striking higher education proposals calls for replacing the five income-driven student loan repayment plans with a single plan to the benefit of undergraduate borrowers. As Trump promised last year on the campaign trail, the new plan would cap repayment to 12.5 percent of the borrower’s income and forgive the balance of the loan after 15 years. That would apply if the loans were taken out for an undergraduate degree. Anyone with graduate loans would expect to pay the same percentage of their income, but would receive forgiveness only after 30 years.
By comparison, the current income-driven plan, known as Revised Pay as You Earn (REPAYE), forgives outstanding debt after 20 years of payment for people with bachelor’s degrees and 25 years for those with advanced degrees, but in both cases the monthly bill is capped at 10 percent of discretionary income. That means people with graduate degrees would expect larger monthly payments for a longer period of time, under Trump’s new plan. ...
The spending plan would uphold a key provision in the recent congressional budget deal by providing continued support for Pell Grant recipients to use their award for as many as three semesters of college, instead of two. That way, students can take a full load of courses year-round, earn a degree faster and avoid taking on a lot of student debt. The Trump administration would increase available funds for year-round Pell by $16.3 billion over 10 years.
Still, the plan calls for pulling $3.9 billion out of the Pell program’s reserves. The maximum award would also remain flat at $5,920. And without any directive to continue indexing the award to inflation, that ceiling might remain in place for the foreseeable future."
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Publication Date: 5/19/2017