Student Loan Debt – Presidential Candidates Plans

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College affordability and how the next president will handle current student loan debt is a very important issue for me.  It’s because I, like many other law school graduates, come out of school with at least $100K in student loans! So to educate myself and others who chose to read this, here are what the presidential candidates have proposed for these issues…

Disclaimer: I am not a Donald Trump supporter.

Hillary Clinton

KEY HIGHLIGHTS

  • Debt free colleges or community colleges
  • Expansion of repayment options – refinance, simplify & automate student loans.
  • Three month moratorium of payments
  • Encourage employers to pay down student loan debt.
  • Expand Pell Grants
  • Hold states accountable for offsetting growing cost of attendance.

Probable one of the most revolutionary plan Hillary Clinton has is the debt free colleges or community colleges.  This portion of her plan was famously taken from Bernie Sanders when he did not win the Democratic nomination.  The implementation of the plan will occur in stages.  First, families making $85K will get free tuition.  This number will go up by $10K every year until it hits $125K so that by 2021, all families making $125K will get free education.  This would cover 80% of all families.

She also specifically address the issues that current student loan debtors have.  She will institute a three month moratorium of all student loan payments.  This allows borrowers to get all the information on new ways of reducing payments, consolidate, and refinance. She also wants to expand Pell Grants and shift responsibility of keeping attendance costs down onto school, such as requiring the students to work 10 hours a week to reduce costs.

Hillary Clinton’s plan is quiet detailed compared to the others and I would encourage you to go to her website and check it out.  https://www.hillaryclinton.com/

I would also like the time to shout out to Bernie Sanders for shaping Hillary Clintons plan to help the students!

Donald Trump

KEY HIGHLIGHTS

  • Take the Federal Government Out of Student Loans
  • Get rid of Department of Education – get rid of Pell Grants
  • No debt free colleges or community colleges

Donald Trump’s policies will essentially limit low income families education options and hurt the liberal arts majors.  He wants to take the Federal Government out of education by first removing them out of the student loan process.  This is a partial restoration to the student loan system prior to 2010 where student loans where issued by private banks and guaranteed by the Federal Government.  The difference is he doesn’t say the Federal Government will back the loans.  Rather, he wants the schools to take on more of the risk of the loans.  In order for students to be able to pay back the loans, the idea is that admitted students will get a good education and then also be able to get a job after graduation.  Arguably this will cause schools to be more inclined to admit science based majors over liberal arts; as our attorney Michael Runkle says, he’s a philosopher major so he’s qualified to bag groceries and ask why.  The theory of holding schools accountable is a bipartisan policy given recent revelations of schools skewing their graduate employment statistics.  (Note: In 2010, President Barack Obama took private banks out of the lending process and gave that responsibility to the banks.  As a borrower who received loans prior to 2010 and am now suffering from crushing debt, I’m not quiet sure going back to the same plan is the best idea.)

The other thing he wants to do is to get rid of is the Department of Education, which is what gives out federal aid and Pell Grants.  He does not support debt-free colleges or community college plans because as his surrogate Sam Clovis stated “community colleges are damn near free now and almost anyone can afford community college”.  Right now on average the cost of  attendance at a community college is $15K and a four year institution is $23K.

That is all I could really find on his plan.  I searched the internet and I even went to his website.  One last thing we can’t forget is the Trump University lawsuits.  Not just one, like the one in San Diego, but several.  Most of the lawsuits allege that the Trump University used aggressive recruiting tactics to scam and trick students into paying for class’.  In one example, I read on the internet, the University was able to get a homeless man to sign up for classes.

Sources

http://www.cbsnews.com/news/donald-trumps-college-plan-needs-to-go-back-to-school/

http://www.huffingtonpost.com/entry/trump-student-loans_us_578d1905e4b0c53d5cfa6531

http://college.usatoday.com/2016/06/22/this-is-trumps-stance-on-student-loans-and-it-could-hurt-poor-students/

Gary Johnson

KEY HIGHLIGHTS

  • Consider reducing student loan interest.
  • Get rid of the Department of Education

While I understand he looks good to those who dislike Donald Trump and Hillary Clinton, his plan seems to be the last clear and actually confused.  First off, Gary Johnson does not mention his plan on his website.  Gary Johnson believes that “guaranteed government student loans” are the cause of the rise of education.  As I stated above though, since 2010, the government doesn’t guarantee loans anymore, they issue them.  He also wants to get rid of the Department of Education, the institution that gives out federal aid and Pell Grants.

Source: http://washingtonmonthly.com/2016/08/03/libertarian-gary-johnson-is-very-confused-about-student-loans/

Student Loans in Bankruptcy

Noticeable missing is any mention in anyone’s plans of student loans and how they are handled in Bankruptcy. Personally I believe the way the law is now is far too strict.  The law right now is that you cannot get rid of the student loans unless you can show that repaying would cause an undue hardship.  Undue hardship is very vague and the way courts have ruled has set the bar very high.  As an example, you would essentially have to prove you suffer some sort of debilitating disability that would prevent you from making even enough money to survive much less pay student loans. My hope was that this strict interpretation would change given the continuing rise of student loan debts across the country.

*Disclaimer: All comments and ideas stated in this Blog are the writers own opinions and in no way reflects a view point of everyone at Seneca Law Group.

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