Financial Helpers has been covering the story regarding President Trump and his views towards student loan debt. He wants to strike a compromise that helps students without burdening taxpayers. Currently, 44 million Americans owe $1.53 trillion worth of student loan debt to the federal government. One way might be to put some of the burdens back on public institutions.
Last Thursday, Trump signed an executive order that did exactly that. Not only that, but the executive order looks to protect the first amendment free speech rights of students. In the past few years, we’ve seen colleges ban speakers and cancel appearances. Usually, those guest speakers are of the conservative variety, of which very liberal universities are hostile towards.
According to the president, despite accepting “billions and billions of dollars from taxpayers, many universities have become increasingly hostile to free speech. Taxpayer dollars should not subsidize anti-First Amendment institutions,” he added. “Universities that want taxpayer dollars should promote free speech, not silence free speech.”
Free Speech and Student Loan Debt
Trump’s new executive order is simple. If you, as a college or university violate free speech, you can lose your funding. That’s a major boon for colleges, many of whom receive billions of dollars in subsidies. “If a college or university does not allow you to speak, we will not give them money. It is very simple,” said Trump.
The order also asks agencies to start rating colleges and the output they provide. That gives students the opportunity to see how much student loan debt they might accumulate. It also looks at their prospective earnings. It’s all a bid to see exactly how good the schools are you might want to attend.
Still, these schools are great at bragging about themselves, but you might not see the full picture. Many such colleges and universities advertised great job placement rates. It was all a lie to get desperate people to go to their school during the recession. Those lies are the bulk reason why we have a student loan debt crisis today.
Shifting Blame
Currently, it’s the federal government’s job to back up students when they can’t afford their student loan debt. These loans are guaranteed, so colleges have no problem upping the cost of tuition and books. They know that money is coming no matter what. Yet, if a student cannot pay his debt, it ultimately falls on the backs of taxpayers.
With this executive order, Trump is attempting to shift some of the blame. Students are required to pay back their hefty student loan debt regardless of the quality of the education they received. For example, the lack of a good education, while expensive, can prevent a student from finding a great job.
https://financialhelpers.com/how-to-teach-your-children-about-spending-and-saving-money/
In the end, Trump is looking to shift some of the student loan debt burden back onto schools. He wants them to have “skin the game” by creating a loan risk-sharing program. This order goes along with his proposition to cap student loan debt borrowing. That cap would be 12% of the person’s income. That prevents them from borrowing more than they can afford to pay back.
