On Monday (February 10), President Donald Trump released a budget proposal for 2021 that would cost $4.8 trillion. His aims? Increase funding for the southern border wall and cut programs like Medicaid, housing assistance, and student loan forgiveness programs, the New York Times reported.
The budget, which is Trump’s fourth and final budget proposal of this term, was submitted to Congress on Monday (February 10), but still has to make its way through lawmakers and is subject to change. According to the Times, Trump is asking Congress to approve $4.4 trillion in spending cuts over the next 10 years, including about $170 billion from student loan debt initiatives.
The student loan debt initiative cuts include “sensible annual and lifetime loan limits” for graduate students and parents and would signal the end to subsidized loans if it’s passed, according to CNBC. The plan, titled “A Budget for America’s Future,” would also eliminate subsidized student loans, in which the federal government pays for the loan interest while a student is enrolled in college; cancel $3.9 billion from the Pell Grant Surplus; and streamline student loan repayment plans, according to Forbes.
It could also eliminate the public loan forgiveness program signed into law by President George W. Bush in 2007, according to CNBC. That program allows the government to cancel the student loan debt of any person who works for a not-for-profit or the government for 10 years if they make on-time payments during that decade, CNBC reports. (This isn’t the first time the Trump administration has come under fire for their treatment of students who were promised loan forgiveness for working in public service — a 2019 report found that a recent expansion of the program turned away 99 percent of applicants between May 2018 and May 2019, largely due to a paperwork technicality.)
According to the new budget proposal, undergraduates would be able to apply for federal student loan forgiveness after 15 years. The proposal also includes the expansion of Pell grants for short-term programs and makes them available to certain incarcerated students.
It’s unclear if anything this stark will actually pass through the same House of Representatives that recently voted to impeach the President, but it will likely be part of the conversation as the 2020 presidential race rages on.
In comparison to Trump’s current take on student loans, all four of the top Democratic candidates are vying to increase access to student loan debt forgiveness. Former Vice President Joe Biden promises to increase access to Pell grants for community college classes for high schoolers and revamp the Public Service Loan Forgiveness Program to support public school teachers, government employees and those who work for certain not-for-profit organizations. Former Mayor Pete Buttigieg — who has a combined $130,000 of student loan debt with his husband Chasten — also advocates for Pell grants and government partnerships to lower tuition costs. Sen. Elizabeth Warren would forgive up to $50,000 in student loan debt for people who make less than $100,000 a year, which means the majority of people with student loan debt would benefit from her plan. (A two-cent tax on ultra-millionaires would end up paying the difference in forgiven debt.) Sen. Bernie Sanders easily has the most aggressive student loan debt plan: He wants to cancel all of it.