The Top 4 2020 Presidential Candidate Student Loan Proposals | Student Loan Planner


Here are the top four student loan
proposals from 2020 presidential candidates ranked from least generous to
most generous. Number four is the Trump proposal. Trump would like to have a 12.5% of your income payment plan for 30 years for graduate
students, and 15 years for undergrads. This would actually be more generous for
those pursuing forgiveness as undergrads that only have undergrad sized debt of,
say, $30,000 to $50,000. However, it would be significantly less
generous with the plans available right now, with PAYE and REPAYE that’ll allow you to
pay 10% of your income for only 20 years under the PAYE plan, for example.
That 12.5% for 30-year requirement if the Trump plan were to
pass would really push a lot of people in the grad school world towards
refinancing their loans and paying them off, because nobody wants to have a
30-year mortgage on their brain. Number 3 is Senator Kirsten Gillibrand’s plan called the “What You Can Do For Your Country Act”. This was
co-sponsored by a whole bunch of other Democratic senators, including some of
the presidential candidates, but she was one of the ones that came up with the
idea along with Senator Kaine, and this proposal would expand Public Service
Loan Forgiveness drastically. It would allow any federal repayment plan to
count towards the 10 years of service. It would also allow any federal loan to
qualify for PSLF. So, a lot of the problems surrounding the current
iteration of PSLF that exists is a lot of the loans were taken out from before
2010 and just didn’t count, because, you know, direct loans are the
only kind of loans that qualify according to the written rule of the law. So Senator
Gillibrand wanted to change this to make it a lot more accessible for people
applying for PSLF, and also to forgive half of someone’s loans after five years
instead of all of them after ten, to try to get people to commit to five years of
service instead of ten years of service. So this would drastically increase the
number of people getting Public Service Loan Forgiveness. It’s been estimated
that 25% of the American workforce couldn’t qualify for PSLF, but a lot of
the bureaucratic hurdles and the difficulties in implementing the program
are preventing people from applying for it. So Senator Gillibrand’s plan would
really try to address this and it is really quite generous.
Number two of the most generous student loan proposals from major presidential
candidates in 2020 is Senator Elizabeth Warren’s plan. This plan would forgive
$50,000 of federal or private student loans for households
making less than $100,000 per year. Now, this would address
the majority of student loan borrowers in America because it would forgive
their debt and it would reset the clock, which would be a huge boost
psychologically and emotionally and financially to all of these people who
borrowed all this money. Now, there are definitely legitimate questions about “What about all the people that paid off their debt?” and “Is
this really a fair use of resources?” I mean, these are the legitimate political
discussions to have. But Elizabeth Warren’s plan is very well thought out
in terms of unintended consequences, because it does try to avoid paying off
the highest debt borrower’s income of debts, and also it prevents people from
very high incomes receiving loan forgiveness. So it is less regressive
than just paying off everyone’s student loans and not worrying about the, you
know, situation behind it. So Elizabeth Warren really thought through this
policy the most carefully of any presidential candidate, but it is not the
most generous, which is why number one and the most generous forgiveness plans
and student loan proposals from presidential candidates in 2020 is, of
course, Bernie Sanders plan to forgive all student loan debt. This would be paid
for by a tax on stocks and bonds. The tax would be approximately 0.5% for
stocks and 0.1% for bonds. This seems like it would not have a big, you know, cost on
the average American and it would fall greater on households that have assets,
however, it would hit average household families that have things like pensions
for example, because pension funds when they buy and sell stocks wouldn’t
theoretically incur this transaction tax, and they would lose half a percent on
every time they buy and sell, which would add up over time. So this would not be a
“free” thing to provide. It would be extraordinarily expensive. But the idea
of getting $1.6 trillion of student loans wiped away would have enormous positive
benefits for a lot of people as well. So these are the proposals that have been
put forward by the major presidential candidates.
I am sure that we will see more from now until when we have the general election
in November of 2020, but there clearly is a lot of noise in this issue. It seems
like in the past several years, we haven’t been able to move the dial a lot
on reform proposals, but we’ll see what happens because the field is wide open.
President Trump’s approval rating is below 50%, so there’s a lot of
uncertainty about the future of student loan proposals. If you want to share your
opinion, visit our post linked to in the section below or leave your comments
here on YouTube or on our blog post about what you think about the presidential
candidate’s 2020 plans for student loans.

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