When President-elect Donald Trump assumes office on Jan. 20, 2017, many college students, alumni and faculty across the United States will pay close attention to how his administration handles the nation’s student debt crisis, which now stands at roughly $1.3 trillion, according to U.S. News & World Report.
Trump’s proposals include capping student loan repayments at 12.5 percent of discretionary income, with student loans being forgiven after 15 years of repayment. Existing programs cap student loan repayment at 10 to 15 percent of discretionary income with loan forgiveness after 20 years of repayment, according to Forbes.com.
What is unclear about this portion of his proposal is whether it is meant only for existing borrowers, since Trump’s campaign had said he wanted to drastically reduce the federal government’s involvement in student lending, according to U.S. News & World Report.
Trump also plans to hold colleges financially accountable if graduates are unable to pay their loans, and to remove the tax-exempt statuses of higher institutions of education if they don’t use their endowment funds to keep student costs down, according to InsideHigherEd.com.
However, these proposals are currently campaign promises with no legislation to back them up, though they do offer insight into what the President-elect could potentially do to change the way higher education is financed in America.
At the University of Connecticut, in-state students face a 31 percent tuition hike over the next four years, according the Hartford Courant. In response, the university will spend $161.6 million in financial aid this year, along with $95.9 million in university-funded grants and scholarships. This represents a $19.6 million and $21.5 million increase, respectively, compared to 2014, UConn Spokesperson Stephanie Reitz said.
University-funded support will become increasingly important within the coming years as the state continues to face massive budget deficits, Connecticut State Rep. Whit Betts (R-78) said.
“Given the projected state budget deficit of more than $2.5 billion over the next two years, I don’t believe state government has the financial resources to increase funding for student scholarships or its financial support to UConn,” Betts said. “However, the state legislature could help drive down the costs of education by voting to eliminate expensive, unfunded state mandates imposed on UConn. It is important to also recognize that the President and the Board of Trustees at UConn also have the ability to reduce the cost of education, and I anticipate they will take steps to achieve this goal.”
Connecticut Rep. Joe Courtney (D-2) has taken strong steps toward passing legislation titled “The Bank on Students Emergency Loan Refinancing Act,” in cooperation with Sen. Elizabeth Warren of Massachusetts.
If passed, this act “will allow graduates to refinance student loans to new lower interest rates – just like they can with home loans, car loans or credit card loans,” Courtney said.
UConn Law Alumnus and Connecticut Sen. Chris Murphy said he recognizes the importance of reducing the burden of student loan debt, noting that the real solution to the debt crisis lies in decreasing the up-front cost of tuition.
“Donald Trump says he wants to reduce the burden of student loan debt. That’s important, but it’s more important to actually force colleges to lower the cost of tuition,” Murphy said. “Until we make college radically cheaper, we’ll never solve the problem.”
In order to become a self-sustaining university, UConn President Susan Herbst has set a long term goal of growing the university’s endowment to at least $1 billion, according to the Hartford Courant.
Jeffrey Levins is a campus correspondent for The Daily Campus. He can be reached via email at email@example.com.