The 2020 presidential race is heating up.
Here’s what some candidates are saying about your student loans.
Student Loan Debt Statistics
According to the latest student loan debt statistics, there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt. Today, according to personal finance site Make Lemonade, student loan debt is now the second highest consumer debt category – second only to mortgages and higher than credit card debt and auto loans. By 2023, 40% of student loan borrowers may default on their student loans.
Some of the 2020 presidential candidates have weighed in on the future of higher education, student loans and how to manage growing student loan debt. While this list does not include all candidates for president or all aspects of a candidate’s position on student loans, expect each of the candidates to release more in-depth policy proposals regarding student loans as the campaign progresses.
Pete Buttigieg (D-IN)
Pete Buttigieg is the mayor of South Bend, Indiana.
Buttigieg believes that:
- The cost of college should be lowered, but he does not believe in free college.
- States should play a more active role in covering tuition costs for students.
- There should not be widespread student loan debt cancellation, given the cost.
- There should be more discussion regarding student loan debt forgiveness, student loan refinancing and income-driven repayment.
Kamala Harris (D-CA)
Kamala Harris is a U.S. Senator from California.
Harris believes that:
- College should be student loan debt-free and supports The Debt-Free College Act.
- Student loan refinancing should be discussed more for student loan borrowers.
- Students should be protected from for-profit colleges that engage in predatory practices.
Kirsten Gillibrand is a U.S. Senator from New York.
Gillibrand believes that:
- Borrowers should be able to refinance their student loans through the federal government to a 4% interest rate.
- The Public Service Loan Forgiveness program should be accessible to more borrowers and less administratively burdensome.
- Borrowers should be able to auto-enroll in income-driven repayment plans.
Bernie Sanders (I-VT)
Bernie Sanders is a U.S. Senator from Vermont.
Sanders believes that:
- College should be free for certain families earning below $125,000 (College For All Act).
- Community college should be free for all students.
- Federal student loan interest rates should be lower, and the federal government should not make a profit on student loans.
- Student loan refinancing should be revamped to help save money for more borrowers.
Elizabeth Warren (D-MA)
Elizabeth Warren is a U.S. Senator from Massachusetts.
Warren believes that:
- Student loan refinancing should be provided by the federal government.
- Public service loan forgiveness should expand to all federal student loans, not only Direct Loans.
- The federal government should not make money on student loans.
- Taxes on the wealthy could be used toward student loan debt relief.
Amy Klobuchar (D-NJ)
Amy Klobuchar is a U.S. Senator from Minnesota.
Klobuchar believes that:
- Pell Grants should be expanded.
- Community college should be free.
- Borrowers should be able to refinance student loans through the federal government and receive a lower interest rate.
- Students should not have “college for free” for four-year degrees.
Cory Booker (D-NJ)
Cory Booker is a U.S. Senator from New Jersey.
Booker believes that:
- A debt-free college degree and greater access to college for low-income students are important goals for a revamped higher education system.
- Predatory lending of student loans must be stopped.
- The Free Application for Federal Student Aid (FAFSA) form should be made simpler.
- Public service loan forgiveness, as well as student loan refinancing, should be expanded to more borrowers.
Beto O’Rourke (D-TX)
Beto O’Rourke is a former U.S. congressman from Texas.
O’Rourke believes that:
- Public service loan forgiveness should be expanded, and those who serve their community after college should have access to student loan forgiveness and perhaps should not have to borrow student loan debt.
- At a minimum, the first two years of a state or community college should be free to students.
- Interest rates for federal student loans – and the cost of college – should be more affordable.
Andrew Wang is an entrepreneur from New York.
Wang believes that:
- A 10×10 Student Loan Emancipation Plan should provide student loan forgiveness for anyone who dedicates 10% of their salary for 10 years to repayment.
- Vocational training should be expanded and destigmatized.
- Universities should implement an administrator to student ratio.
President Donald Trump
President Trump released his 2020 budget and vision for higher education. In his proposal, Trump called for several goals, including:
- strike a balance between students’ needs and taxpayer interests
- ensure fiscal discipline in discretionary spending
- reduce the role for the federal government in education
- reduce student loan debt
- increase accountability for institutions of higher education
- make higher education more affordable
- invest in technical and career education
Specifically, Trump proposed that:
- The Public Service Loan Forgiveness program should be eliminated, which would impact borrowers who borrow a new student loan after July 1, 2020.
- There should be only one income-driven student loan repayment plan.
- Student loan forgiveness should be made available to all borrowers for undergraduate and graduate student loans who participate in the single income-driven repayment plan. Borrowers would pay 12.5% of their discretionary income, and would receive student loan forgiveness on their federal undergraduate student loans after 15 years and receive student loan forgiveness on their federal graduate student loans after 25 years.
There are several key questions that candidates, legislators, policymakers, voters and political watchdogs should consider as these proposals for student loans become more fully baked:
- What is the proper role of the federal government when it comes to issuing student loans?
- What is the role of the private sector, including banks and other financial institutions, in issuing federal student loans?
- Given the amount of student loan default, will the federal government begin to underwrite federal student loans?
- How will the federal government afford to refinance student loans?
- Should federal taxpayers pay for federal student loan forgiveness through Public Service Loan Forgiveness program, income-driven repayment programs and similar programs?
- Should college be student loan “debt-free” and how would the cost be funded?
- Should college be free and how would the cost be funded?
- What is the proper balance between the interests of students and taxpayers when it comes to student loans?
Much more to come as new proposals are announced and debated, so stay tuned.