Highs and Lows of Trump’s Student-Loan Repayment Options

President-elect Donald Trump didn’t say much about improving college affordability during his campaign, but he has addressed repayment plans for the millions of graduates saddled with mounting student loan debt.

In an Oct. 13 speech in Columbus, Ohio, Trump spoke briefly about income-based repayment and loan forgiveness.

“Students should not be asked to pay more on their loans than they can afford,” Trump said. “The debt should not be an albatross around their necks for the rest of their lives.”

Here are the highlights of Trump’s campaign proposals related to student loan debt:

  • Borrowers would contribute 12.5 percent of their income if they opt for a repayment plan, instead of 10 percent required under current repayment plans. The downside: higher monthly payments. The upside: the loan is paid off sooner.
  • After 15 years under’s Trump’s proposed repayment plan, borrowers could have their debt forgiven. Currently, borrowers in repayment plans have to wait 20 years or 25 years to have their loans canceled.

Income-based repayment plans are only available with federal student loans. Student loans from private lenders are not included.

The rising student loan debt across the nation has helped swell enrollment in the government’s income-based repayment plans. The number of borrowers taking part has quadrupled over the past four years from 5 percent in 2012 to nearly 20 percent in 2016.

The Department of Education currently offers four “income-driven repayment plans” which set monthly student loan payments at an amount that is intended to be affordable based on income and family size. They include the following:

  • Revised Pay As You Earn Repayment Plan (REPAYE Plan)
  • Pay As You Earn Repayment Plan (PAYE Plan)
  • Income-Based Repayment Plan (IBR Plan)
  • Income-Contingent Repayment Plan (ICR Plan)

J. Lipsky

Hello, I am John, born in Cedar Rapids, but lived a lot of years in Latin America. I am an economist and have specialized in credit and debt. Originally sovereign debt, but later on, in credit score management and debt consolidation. I write for many publications. Here in eCreditDaily, I write about credit, second chance banking, and debt. I also write for other websites and bulletins about inflation and country risk.

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