With a $66.6 billion funding request for the Department of Education, which is a 7.8% decrease in current funding, President Donald Trump’s proposed budget is looking to eliminate popular public service loan forgiveness programs.
The new proposals, which came last Monday, could also see the elimination of interest payment in federal student loans by the Federal Government. Among other initiatives, the budget includes several proposals which could impact student loans and student loan repayment strategy. Trump’s plan, titled “A Budget for America’s Future,” would cut student loan spending by $170 billion, and also place limits on borrowing, according to USA Today.
Johan Tejada, a 2015 political science University of Connecticut alumni, said paying student loans won’t end anytime soon.
“I still owe and will continue to owe for the next few years,” Tejada said. “From what I heard about that program is that they’ve already made it so difficult to qualify and to actually receive the forgiveness that I question if that program is actually doing anything”
Scrapping a program that forgives the remaining debt of teachers, firefighters and others in public service who have made on-time loan payments for 10 years could lead to an additional $70 billion in costs to loan borrowers over 10 years, as estimated by The Center for American Progress.
“I have a couple of friends that are planning to apply for loan forgiveness after they meet their time. To me those programs barely serve any purpose, except for being there as a buffer for when people talk about the student loan crisis that we are in today” Tejada said.
With the Free Application for Federal Student Aid (FAFSA) deadline passing this weekend, some UConn students have expressed that President Trump’s plan could have a greater impact on some students over others.
Sixth-semester sport management major Patrick Gately expressed worry for students who are already benefiting from the program.
“I don’t know much about those programs, but I bet it will hurt students from low income families that probably benefit from them.”
The cancellation of the Student Loan Forgiveness Program, enacted by President George W. Bush in 2007, allows borrowers who work in certain non-profit or public sector jobs to have their federal student loan debt erased, could also have effects on those the current proposals do not affect.
Jamie Lee Chin, a UConn class of 2012 graduate, said students may think the cuts don’t apply to them, but may soon realize they do.
“I can easily think that doesn’t apply to me or it’s only a matter of time that it does or even the possible effects of it on me who it’s not directly impacting,” she said.
Chin also shared the possibility of earnings if the new proposals are not approved.
“I’m wondering if he realised how much money they could make without cancelling it. Because if people wouldn’t start getting cancellations til 2017, it’s only been two years. Only 1% of the people that applied saw the relief … in September,” she said.
Some borrowers may even be faced with the reality of having to rethink life goals, in the event of the program’s demise.
“I feel strongly about the career I went into, ” said Jade Gory, a UConn graduate who works as a judicial director. Having paid 53 of the 120 qualifying payments toward forgiveness, she hopes to be granted forgiveness in Sept. 2025.
“But I would have to make serious life changes and not be able to save up for a house,” she said.
The 2021 budget would also implement some positive changes, including career and technical education funding by $900 million, and also the reinstatement of federal Pell Grant eligibility for short-term education programs and for some currently incarcerated students being released within five years.
Sixth-semester management and engineering for manufacturing major Gleimy Rodriguez said while the proposals may push students into the technology field, the negatives still outweigh this positive.
“I think that tech fields are the future, so this definitely drives people in that direc1tion. However it does limit people who dream of careers outside of tech who may not have the money needed to fund their education without the government’s help,” she said.
Nicholas Martin is a campus correspondent for The Daily Campus. He can be reached via email at email@example.com.