Donald Trump is promising the most liberal student loan repayment plan since the inception of the federal financial aid program, in a clear effort to court the millions of Americans struggling with the high cost of college.
“We would cap repayment for an affordable portion of the borrower’s income, 12.5 percent, we’d cap it. That gives you a lot to play with and a lot to do,” Trump said at a rally in Columbus, Ohio, on Thursday. “And if borrowers work hard and make their full payments for 15 years, we’ll let them get on with their lives. They just go ahead and they get on with their lives.”
The terms proposed by the Republican nominee are more generous than all of the existing government programs that let borrowers cap their monthly student loan payments to a percentage of their earnings. Even the latest income-driven plan, known as Revised Pay as You Earn (REPAYE), forgives remaining debt after 20 years of payment, though it caps borrowers’ monthly bills to 10 percent of their income.
“Students should not be asked to pay more on the debt than they can afford,” Trump said. “And the debt should not be an albatross around their necks for the rest of their lives.”
What’s remarkable about Trump’s proposal is it flies in the face of the fiscal conservatism that’s supposed to define the Republican Party. Republicans have railed against the Obama administration’s expansion of income-driven repayment programs as fiscally irresponsible, yet the party’s nominee wants to lower the period of repayment, which is sure to cost the government quite a bit of money.
“They are way off on their numbers,” said Jason Delisle, a resident fellow at the American Enterprise Institute, a conservative think tank. “If you were going to give loan forgiveness in 15 years, you’re going to forgive a lot more debt than you’re going to make up for in the form of the higher payments they’re proposing, by a lot. I don’t even need to run the numbers. It’s so...read more at Washington Post