Trump has recently taken a new stance on the student loan debt issue that directly contradicts his previous viewpoint on the topic. This time around he is offering more specific details though the official detailed policy is still in the works.
In a nut shell, Trump is alluding towards eliminating federal funding towards higher education and placing more responsibility on banks that offer student loans. Presidential candidate Trump claims that the government does not profit from federally funding higher education which explains the movement towards eliminating that government responsibility.
First, he wants to downgrade the influence of the Department of Education which means less federal funding towards education and the elimination of Pell Grants. De-emphasizing the Executive Branch’s educational office is one of the first steps towards eliminating federal government accountability and influence.
Second, Trump wants colleges to take on more responsibility when it comes to student admission and aid. In other words, this means colleges need to use more discretion when deciding to fund or admit certain students. One effect this may have is a greater emphasis on funding majors in science, technology, engineering, and mathematics as opposed to liberal arts. This places an emphasis on projected future earnings in determining eligibility for student loans.
This new stance directly conflicts with current Democratic policies that were proposed by President Obama and current presidential candidate Hillary Clinton. In general, these plans call for increased federal involvement.
President Obama’s plan calls for looser restrictions on student loan forgiveness, for an increase in federal funding for lower income students, and for a stop to subsidies towards private lenders for federally backed loans.
Under Hillary Clinton’s solution, borrowers would be able to refinance their federal loans with the government with new low interest rates. Additionally, this proposal calls for states to increase funding for higher education while also calling for colleges to decrease tuition costs.
The contradiction between Trump’s potential plan and the current Democratic proposals is the influence of the federal government. The Democrats seem to want to provide federal services similar to private lenders (maybe due to the growing popularity of private loan refinancing) while Trump may want to take the success of these private lenders and utilize it full sail in their market.