Students around the country are missing their loan payments so frequently that it is being compared to the subprime mortgage crisis of 2007.
Eleven percent of students have currently defaulted on their loan payments, while back in 2010 about 11.5 percent of Americans affected by the mortgage crisis did the same, according to a recent Citi report.
With Trump promising to significantly scale back funding for the Department of Education, many Americans are worried he will cut Public Service Loan Forgiveness completely. On the other hand, there are business professionals who believe the president has a plan that will help students in debt.
Let’s hear from some of these financial experts who weighed in on the situation. Do they believe Trump will make a difference in the current student loan crisis or not?
Stance: Trump will not help students
“The main problem is the fact that the Department of Education itself doesn’t want the problem to be solved since it is reaping $50 billion in profit annually from its student loan program. Making matters worse is the fact that there is no bankruptcy protection when it comes to student loan debt which means the department’s profits actually increase the more student loans get defaulted.”
On Trump: The student loan crisis was a significant part of Trump’s platform during the elections. But since he’s won, he hasn’t shown any inkling about doing anything about it. The best way to ease the crisis is to bring back bankruptcy protection for student loans which in turn will force the Department of Education to mediate school tuition rates.
Carmen Dellutri, founder and bankruptcy lawyer of Dellutri Law Group
Stance: Trump is already helping students
“Student loans are there to help those individuals who truly believe in themselves, their country, and their futures. They are willing to leverage their future economic opportunities along with the need for a quality education. This is what America is all about. I fully believe that if we can create economic opportunities for all Americans, there is not one person who calls himself an American who would not be willing to work hard and pay back each and every penny of his or her student loans.”
On Trump: President Trump is already helping borrowers by stimulating the economy and creating jobs. Whether you love him or you hate him, if you have a 401(k) or an IRA, you have seen value created since he took office. Value has been created in all Americans retirement plans, not just Republicans’. There is no denying that.
Stance: Trump will not help students
“The whole reason I started my website was to help millennials budget their money so they can make their student loan payments. With the average grad looking at $37,000 in debt and the average salary at $49,000 there is a big problem we are facing. Based on my experience I have seen my peers decide not to pay back their loans and go into default because they can’t make the payments.”
On Trump: I do not think that Trump will help borrowers. Trump said it himself in a Twitter rant back in 2015. The government makes money on student loans. He said he would fix that, with no action plan. $100 billion of the $1 trillion dollars of student loan debt is in default.
James Pollard, financial marketing consultant for TheAdvisorCoach.com
Stance: Trump should help students
“The student loan crisis wouldn’t be such a bad thing if college graduates were actually able to secure decent paying jobs and build wealth fast enough to pay off the debt and pay off their opportunity cost, but that’s not the case. It’s heartbreaking to see someone $100,000 in debt working as a barista at Starbucks. I can definitely see how that person feels deceived, lied to, and cheated.”
On Trump: I don’t have a crystal ball, but I think it is in his best interest and the country’s best interest to put together a plan that either limits the amount people can borrow for college, lowers tuition costs at colleges, or redirects funds to help people secure an education. I think the most important of those three is to limit or lower tuition costs.
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