There have been several recent developments in regards to the Hillary Clinton Presidential campaign. Some of these developments were just rumors such as the idea that Hillary Clinton was going to offer full student loan forgiveness, but the Clinton campaign is announcing a new plan that may interest student loan borrowers.
There are a couple of promises made by Hillary Clinton that focus on student loans in general as well as specific borrowers.
One of the specific promises pertains to public service workers with student loan debt. Clinton essentially guarantees that people in public services (especially teachers) can qualify for federal loan refinancing . After ten years of refinanced interest rates and payments, the remainder of the debt will be forgiven completely.
This is a common idea that many student loan reformers throw around. Many public service workers have trouble with their loans due to lack of compensation in comparison to their outstanding debt. This plan also attracts up and coming students to choose a job in the public service field.
Another aspect of this plan pertains to graduates in general; basically, a new deferral period of three months is to be implemented under this plan. Today, there is already a six month loan deferment period, but interest accrues during this period with limited refinancing and consolidation options. This plan aims to provide better consolidation options after three months pass with help from the federal government.
While there is no specific mention to deferral of interest accrual, this new proposal is projected to cost the government roughly $1 billion. This leads one to believe that interest may be suspended during this three month hiatus. A more likely scenario alludes to lost interest after refinancing. During that period, financial advisory resources are to be provided to borrowers about saving money and what not.
Clinton claims that the overall expense to the government will be offset by the economic contributions by borrowers during their new three month deferral period. This economic contribution includes starting businesses or purchasing new homes which was a key point in one of Clinton’s recent initiatives.
These new ideas are not actually new, but they are bound to have a sweeping effect on borrowers and overall debt due to the gravity of the student loan issue. It complies with a general trend towards refinancing options which are gaining prominence with borrowers. At any rate, politicians and others are seeking ways to alleviate the alarming increase in student loan debt; for many politicians, these promises serve as helpful tools in the election process.