St. Cloud State, State/Region — March 25, 2019 at 8:59 pm

Capping Student Loans: Trumps Proposal to Battle Debt Crisis

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The Trump Administration is proposing a new bill that would hopefully start decreasing the national student debt crisis. As of now the national debt crisis is at an all time high of 1.5 trillion dollars, and that number is on the rise.The White House released proposals to reform higher education in the United States, including limits on grad student and parent loans meant to encourage universities to lower their tuition.In a list of education priorities targeting reforms to the Higher Education Act, the White House said Congress should “institute Parent and Grad PLUS loan limits” to “encourage responsible borrowing.”

The Trump administration’s proposal also suggests consolidating repayment options so that the government would offer just two plans: one standard 10-year fixed plan and one income-based repayment plan. The latter would limit monthly payments to 12.5 percent of a borrower’s discretionary income and offer loan forgiveness after 15 years. As of now the national debt crisis is at an all time high of 1.5 trillion dollars, and that number is on the rise. The administration did not elaborate on what limit should be set on graduate student and parent borrowers, but the programs currently allow for borrowing up to the cost of attendance.

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