Student loans may not have been a topic that was discussed in huge detail in the campaigns for Clinton and eventual winner Donald Trump in the 2016 presidential election, but there is no doubt that they are a very important issue – and not just with young adults who are wondering whether getting a degree is worth the debt. Economists have been concerned for years that the student debt situation – which at present means $1.4 trillion in loans – may be the cause of the next major economic crisis to hit America.
Following the election, with Trump now as president-elect, students or people who are about to become students may well be concerned about what he may do regarding debt. Trump was – according to exit polls – not the favored candidate for the majority of younger voters, who listed education as one of their main priorities. So where does he stand on student loans, and what policies may he be likely to put in place?
Trump and Student Debt
Strangely, student debt was one of the few areas where Trump’s stance during campaigning was uncharacteristically liberal. He stated that he didn’t think student loans should be used as a source of profit for the government. This is interesting, when you consider Trump’s business background. However he feels about other issues, he has most likely experienced first-hand the importance of having well educated, well trained people in his own workforce, and would therefore be supportive of people seeking to get things like business degrees.
Potential Policies under Trump
Trump suggested during the campaign period that he would like to cap student loan repayments at 12.5% of the holder’s income, and reduce the maximum length of repayment time to 15 years. This could result in lots of people paying back less than they owe by the end of the repayment period. It does also seem that Trump would prefer people to have access to better student loan products from private lenders, rather than federal loans – though how this may work with other plans he has hinted at, which include encouraging banks to ‘lend again’, remains to be seen.
What if You Still Want to Avoid Debt?
While Trump’s plans actually sound quite friendly toward students, there is no way of knowing yet when or if they will be implemented, and while they may reduce the debt burden on individuals somewhat, going to college will still result in years of fairly hefty repayments. Students today do have other options. For instance, if you want to get a business degree, you can look at an online business administration degree with a university that has an online campus. Online business programs are very popular these days, and can reduce the cost of your degree by a huge margin.
Students, parents and analysts will be watching with interest to see how Donald Trump ultimately deals with student loans and education as a whole during his upcoming term as president.