Earlier this year, the Student Loan Forgiveness Program got a shot in the arm after President Trump signed the $3.1 trillion compromise spending bill. The bill includes an additional $350 million to help struggling college grads pay off some of their student debt.
This additional benefit is a one-time offer to those who might have thought they missed the chance to get help under the expiring program. Student loan debt can severely cripple one’s credit, making it impossible for them to buy a house or car until after the debt is paid.
Democratic Senator Elizabeth Warren loved the move, saying, “I’m very glad that, for the first time, we got some money to help students unfairly trapped under a mountain of debt.”
Still, this one-time reprieve is small potatoes compared to the estimated $1.5 trillion that’s still owed. Politicians like Senator Warren understand the need for a full-time fix to help students out from under this extreme burden.
In 2007, the Student Loan Forgiveness Program was born, designed to allow students the option to opt out of their remaining balance if they make 120 on-time payments. They must also work for a qualifying employer.
Trump Wanted to Cut the Student Loan Forgiveness Program
For students who decide to enter graduate school, student loans can easily pile up to the tune of $100,000 or more. That’s a massive debt for anyone to have after they graduate, so the program hoped to encourage students to make their payments while helping to get them out from under it.
The $350 million deal exists on a first come, first serve basis. If you’ve been told you don’t qualify or you missed the deadline the first time around, you should act right now to take advantage of this renewal before it’s gone. Call Financial Helpers today to see if you qualify! You can reach us at:
Before signing the bill that expanded student loan forgiveness, the Trump administration was on track to cancel it altogether. In fact, the government was emboldened to go after students who owned federal loans and cut income-driven plans. They hoped to change the whole structure of loans.
To do this, the administration wanted repayment to increase from 10% of their income to 12.5%. This effort is to hopefully allow students to pay back their loans quicker. Trump’s proposed budget also looked to remove any student loan forgiveness applications for service workers. To many, this would signal a drop in the number of people looking for service work.
“You may have fewer people pursuing degrees in areas that will lead to public service occupations. There won’t have as many prosecutors and public defenders. You won’t have as many people pursuing law enforcement or becoming EMTs, firemen, and members of the military,” said Mark Kantrowitz, an expert in student loans.
Other Grants and Resources to Lose Out
According to Trump’s previous budget, 30 other programs were slated for removal. The 21st Century Community Learning Center grant, the Federal Supplemental Educational Opportunity Grant, and several others were on the list. Money across the board was looking to be cut to save money.
The Trump administration is not wanting to help students overcome this massive problem of student loan debt. Instead, his interests have been in appeasing the banks and major for-profit schools. Many of these schools are capitalizing on predatory marketing techniques to scam desperate students.
So, it’s a great thing that President Trump decided to compromise with Democrats. Extending student loan forgiveness protections for students. Sadly, these protections may not last. We’re only a few months away from the 2019 budget. If Trump removes protections, then students are out of luck. Call Financial Helpers today to see if you qualify.