Trump may end a student loan forgiveness program - and people are furious
- President Trump released a proposed budget Monday that would axe certain student loan forgiveness programs.
- These programs were developed to help borrowers struggling under insurmountable debt and to incentivize individuals to enter into low-paying, but essential jobs.
- The budget plan drew ire from some student loan borrowers.
President Donald Trump unveiled a budget plan Monday that appears to put a slew of loan forgiveness programs in peril.
The proposed budget would dismantle the Public Service Loan Forgiveness Program, a plan which helps individuals with jobs in government or for a tax-exempt nonprofit organization pay off their loans, and would change the number of years and amount that students must pay back loans under loan forgiveness programs, which are set up to help individuals whose loan payments are more than 10% of their discretionary income.
The programs in question were developed to help borrowers struggling under insurmountable debt and to incentivize individuals to enter into low-paying, but essential jobs.
Upon learning of the proposed changes to borrowing plans, some students expressed outrage.
Proponents of Trump's plan argue it actually benefits undergraduate students by decreasing the amount of time needed to pay off loans, but increasing the percentage of discretionary income they must pay.
"The net effect is a significant reduction in a borrower's total payments over the life of the loan, which is why the president would limit this new benefit to undergraduates," The National Review's Jason Delisle wrote.
But that leaves graduate students on the hook to make up some of the savings. "To offset the cost of this more generous program, graduate students would also have to make the higher monthly payments and would not qualify for loan forgiveness until they had reached 30 years of payments, up from 20," he wrote.
The proposed budget requires Congressional approval and will likely receive scrutiny before its passage.