Trump’s student debt plan offers hope
Despite decrying universities as echo chambers, President-elect Donald Trump has retreated to his own self-reinforcing machine: his Twitter account. Tweeting on a daily basis, in the midst of criticism coming from across the spectrum and the world, Trump can immerse himself in social media, where thousands of likes and retweets comfort him but only perpetuate confirmation bias. Indulging in his inflated popularity only deludes Trump and distracts him from harsh truths, such as the fact that only 37 percent of millennials voted for him. Despite sharing a common love of Twitter, millennials and Trump have sharp differences, not only in terms of priorities, but also in terms of policy positions. Perhaps the sole exception is the student debt crisis, which Trump has promised to tackle. His stance and action on student loans will determine whether or not Trump runs the risk of further alienating what will soon be the largest voting bloc in the country. Trump needs to take action on student debt in order to demonstrate to millennials that he has their interests in mind.
Though Trump received a million-dollar loan from his father decades ago, today, millions of students take out loans to put themselves through college — and accrue thousands of dollars in debt in the process. Collectively, this debt adds up to a whopping $1.3 trillion, preventing graduates from getting married or buying a house, which imposes a massive drag on the economy and social mobility. In a surprise move to many, including those in the Republican Party, Trump released his ambitious student debt plan this past October.
Trump’s initial plan looks remarkably similar to President Barack Obama’s latest income-driven Revised Pay as You Earn plan, which limits borrower’s monthly payments to 10 percent of their income while forgiving remaining debt after 20 years of payment. Trump’s proposed legislation tweaks these figures by capping income payments at 12.5 percent and forgiving debt after 15 years. This means that borrowers will be sacrificing more of their paycheck per month but do so for fewer months. Trump hopes that lower government spending, coupled with fewer students defaulting on loans, will cover the cost of this remarkably generous and ambitious plan; but forgiving debt after fewer years comes with a large price tag, especially considering that doctors and lawyers with six-figure debt will be the largest beneficiaries.
In addition to these economic hurdles, several questions linger. First, Trump needs to clarify whether these revised figures would apply only to income-based loans or for all federal loans. Second, Trump must clarify the role of the federal government in the loan process. Trump’s overarching economic goals rely on the private sector’s cooperation, but in 2017 less than 10 percent of new student debt will be from private sector sources.
Even if Trump can flesh out and improve his ideas, because of his own fickle policy positions and Republican fiscal conservatism, many millennials are still left in this election’s aftermath worrying about the future of their education and economic well-being.
Actions speak louder than words, and concern about the student debt crisis was absent not only during most of Trump’s campaign, but also in his 100 day plan. Moreover, though Trump’s Republican Party controls both the House and Senate, which would facilitate the passage of a potential bill, student loans have never been a priority for Republicans. Republicans have made it clear that their immediate agenda centers on scrapping Obamacare and various regulations while implementing their own fiscally conservative economic plan. While these factors potentially spell stagnation on the front of student debt, there might be hope that Democrats will partner with the President-elect to move student debt reform plans forward.
If Trump truly considers himself the champion of American workers, then he should do everything he can to free the millions of workers struggling under mountains of debt and to help students looking to enter the workforce. This election wasn’t just about pitting liberals against conservatives or the heartland of America against the coasts — it was about whether the true needs of millennials would be heard over the clamor of tweets, culture wars and allegations. The millennials’ favorite for office may have lost the election, but if Trump answers their calls, then four years of waiting for relief and ultimate prosperity might not be lost.