Photo by Sarah Grace Taylor / Sidelines Archive
Story by Jaime Minor / Contributing Writer
The Trump administration released its proposed budget for the 2018 fiscal year on Tuesday, and, if passed by Congress, many MTSU student loan borrowers may be affected. The budget proposes changes to the student federal aid program and will affect subsidized loans, Pell Grants, Income-Driven Repayment Plans and other programs geared toward making college more affordable.
The budget proposes to eliminate the subsidized loan program, which is a program for students where the government pays the interest on the borrower’s loans as long as they are enrolled in classes at a part-time status. On certain plans, the government pays interest during deferment and forbearance periods. This program also allows students to defer payment for the first six months after graduation. The proposed program elimination seeks to save taxpayers up to $1 billion annually.
The budget also seeks to eliminate the Public Service Loan Forgiveness (PSLF) Program, which is a program that forgives the remaining balance on direct student loans after 120 payments for borrowers employed for government organizations or tax-exempt, not-for-profit organizations. This cut is expected to save an additional $859 million. Borrowers already enrolled in the PSLF program will not be affected.
April Prather, a junior majoring in education, weighed in on this issue.
“Teachers don’t make a lot of money, and I have a real fear of paying back my loans,” Prather said. “This new budget makes me nervous for all of the future teachers who will be drowning in loans and won’t have many options to help repay them.”
The new budget seeks to streamline Income-Driven Repayment (IDR) plans by creating one single IDR plan that would cap the borrower’s monthly payment at 12.5 percent of their discretionary income, with any balance remaining forgiven after 15 years of payments for undergraduate students and 30 years of payments for graduate students. Currently, there are multiple IDR plans, with some plans allowing borrowers to make payments of 10 percent of their discretionary income for 20 years and then having the remaining balance of their loans forgiven after 20 years.
The budget has received bipartisan support for the expanded access to Pell Grants for eligible recipients. Currently, Pell Grant recipients can only receive aid for the Fall and Spring semesters. Under the new budget, eligible Pell Grant recipients have the opportunity to receive Pell Grants for a third semester during an academic year, allowing the student to complete coursework faster.
In addition to the budget’s proposed reform of the federal aid program, the budget also recommends a $490 million reduction to the Federal Work Study Program. This program employs nearly 670,000 college students in the United States.
Mina Burnside, a senior majoring in exercise science, explained his opinion on the proposed reduction.
“I have used the work-study program the past few years to make college more affordable, and I hate that less people will be able to utilize such an awesome program,” Burnside said.
“This is just a continuation of the hostility that Trump and his administration have shown to public education. Hopefully, this budget will die and the Senate’s version will be a little more sane,” said Tyler Reed, a junior majoring in history
Numerous Republican and Democratic senators have said that the budget is “dead on arrival.” If this portion of the budget should pass, it applies to all loans originated on or after July 1, 2018. It does not apply to borrowers who are finishing their current coursework.
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