Yes you should be worried…but its not all bad. There are a many things that President-Elect Donald Trump wants to change with regards to the programs Obama put in place while he was in office. Many graduates and soon to be graduates will see many of these changes come about over the next few years or sooner.
Here is a break down of the main changes expected:
- Payment cap of 12.5% (under the PAYE and REPAYE the cap is 10%) This means the payment amount each month will be higher than required under two of the current income driven plans
- Forgiveness after 15 years. We aren’t sure if this is under the income driven plan or for all loans. We also don’t know if this includes public service borrowers who expect to begin receiving forgiveness in Oct. 2017. However, this is 5 years sooner than forgiveness under PAYE.
- Colleges to share the risk of lending funds by looking at different factors like major, college itself, and ability to find a job in the field.
- Cost to tuition cuts. He believes the cut to compliance costs will trickle down to tuition. Although we aren’t sure how he will ensure that happens.
- Use federal funding for non-traditional programs like vocational and technical schools.
- Restore private banks the ability to issue federal loans. This would give the opportunity for competition again allowing for reduced rates and payments for borrowers.