When President Donald J. Trump unmasked his federal spending plan for 2019, unveiling a number of budget changes on Feb. 12, a notable provision emerged for current and aspiring college students. Trump is proposing changes to the way student loan debt is handled in the United States. Students in the U.S. currently hold about $1.3 trillion in college debt, and debt restructuring is one of the primary debates for politicians and a major concern for future and current college graduates. Under Trump’s proposed budget, important tax breaks and loan stipulations would be revoked, potentially increasing the cost of higher education for millions of aspiring college students.
That spending change would terminate the Public Service Loan Forgiveness (PSLF) Program. The program allows individuals that have worked in public service for at least 10 years to qualify for student loan forgiveness. PSLF most directly affects teachers, police officers, social workers, public defenders and anyone else who works for government organizations.
Implemented in 2007 as a attempt to reduce college debt in America, PSLF also incentivizes talented, educated individuals to take lower-paying jobs in the public sector that they otherwise might not have taken. For example, according to the National Association for Law Placement (NALP), public defenders in the state of Georgia with 10 years of experience make approximately $64,000 a year, whereas the average salary for a lawyer in the private sector is $135,000 a year. That $70,000 difference makes it exceedingly difficult for the government to attract skilled lawyers to defend some of the most in-need citizens. The same goes for teachers. The PSLF program attracts some to public instead of private schools and colleges, increasing the quantity and quality of public educators. PSLF has a literal cost, as individual debt is taken on by the federal government. But a restructure of the program is far more desirable than the complete termination of a program that helps to absolve a portion of the ever-increasing student debt in the U.S.
Additionally, Trump’s proposal would eliminate federal subsidized loans and change the interest rates and tax deductions that are aimed specifically at lower income households. Subsidized loans allow students to take out loans which only begin accruing interest once the student has graduated — the government pays all interest that accrues while students are pursuing their degrees.
The proposal would also eliminate tax deductions for earners in certain tax brackets. Currently, certain deductions apply to single filers who make under $65,000 and filers in joint households which make up to $130,000. Both subsidized loans and income deductions have stipulations that require benefiters to be in lower income tax brackets. Essentially, Trump’s proposed changes in spending on student loan relief would adversely affect lower income brackets. This budget is a change that would cut spending without upsetting the many wealthy companies and individuals who helped finance Trump’s 2016 campaign and would offer valuable financial support in 2020.
The spending changes would lower the required time for more universal loan forgiveness from 20 years to 15 years for undergraduate loans. But in order to compensate for that change, income-based interest rates would rise from 10 to 12.5 percent. Trump’s budget could lead to lower spending on student loans overall by granting forgiveness sooner with higher monthly payments. But an increase in monthly payments for student loans could disadvantage lower-income recipients by making them potentially unable to pay the individual monthly payments, regardless of the lower overall amount they would have to pay before loan forgiveness kicked in.
Budget documents highlight the proposed expansion of Pell Grants to career technical training, claiming that expansion would incentivize prospective students to take part in non-four-year programs such as community college and two-year colleges. That would increase the amount of students pursuing careers in sectors of the economy that are important but under-acknowledged as a means of post-secondary education such as plumbers and technicians. While this may be true, Trump’s plan fails to address the tens of thousands of dollars in loans per person that the other cut provisions were created to address. Essentially, Trump’s plan cuts off your foot and bandages the scrape on your finger as compensation — and lower-income individuals will bear the brunt of the damage.
The problem with Trump’s spending cuts isn’t just the cuts themselves, but it’s what the cuts reveal about the administration’s priorities. The Trump administration is far more concerned with cutting costs than with addressing problems that affect the average American, the very demographic that Trump’s 2016 presidential campaign once swore to help. Cuts to the PSLF program would disadvantage teachers, police officers and other public servants. Trump’s proposed tax deductions and cuts to subsidized loans would almost exclusively affect middle- and lower-class Americans who aspired toward higher education. In 2014, students from the top-quarter of U.S. households (by income) make up more than half of degree earners while students from households that earn less than $35,000 a year make up only 10 percent of degree earners. Yet again, Trump’s administration has failed to prioritize the middle-class American voters who put them in office.
Alexandra Grouzis is a College freshman from Franklin, Tenn.
