NICHOLAS KAMM
As student debt continues to climb, President Donald Trump released a budget for 2021 on Monday that would slash many of the programs aimed at helping borrowers.
Student loan spending would be cut by $170 billion in Trump’s plan, titled “A Budget for America’s Future.” The cuts include “sensible annual and lifetime loan limits” for graduate students and parents and the end to subsidized loans, in which the government covers the interest for borrowers who are still in school or experiencing economic hardship.
It would also reduce the number of repayment options for borrowers and nix the popular, if challenged, public service loan forgiveness program.
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That program, signed into law by President George W. Bush in 2007, allows not-for-profit and government employees to have their federal student loans canceled after 10 years of on-time payments. The Consumer Financial Protection Bureau estimates that up to one-quarter of American workers are eligible.
“The Trump Administration already has a reputation of being anti-borrower,” said Mark Kantrowitz, a higher education policy expert. “This just takes it further.”
In all, Trump’s proposal would request $66.6 billion for the U.S. Department of Education, trimming the budget by $5.6 billion, or nearly 8%. The proposed cut is less steep than last year, when he called for a nearly 10% reduction in spending for the department.
Still, any cuts to student loan relief programs are unlikely to sit well with many voters.