While Trump has been very quiet about student affairs during his campaign, he did mention that he had something in the works concerning student loan debt in the country. While he only brushed on the subject, significant changes are to be expected in the student loans system, some of which could have direct repercussions on the debt burden of new graduate and postgraduate students. Here are four things that might change with student debt in the coming years.


A Switch from Public to Private

As we already know, Donald Trump is a staunch supporter of private enterprise and he announced his plans for making student loans completely private. Under his presidency, only private banks would be allowed to issue loans and the federal government will be forbidden from originating loans. For anyone with an online masters in political science, this will seem right in line with the policies of the Republican Party.

Obama’s administration allowed for more federal loans to be issued under its direct loan program, gradually pushing out private banks while substituting with a large number of Pell Grants for lower income students.

Loans Might be Affected by Future Projected Income

Trump’s administration has the intention of letting colleges have a say about who will get loans and how much money they will be entitled to. Factors such as employability, which college the student is enrolled to, and the student's major, may have a direct effect on student loans.

Reduction of College costs by Restricting Administrative Bloat

Trump made it very clear that he wants college costs to be reduced. However, he doesn't want to do it by using public funds. And for anybody who completed an online masters degree in political science, this will seem perfectly understandable. Trump's rationale is that since colleges are subsidized by the federal government, they need to reinvest some of that endowment money to their students and be completely accountable for it.

Another point he mentioned is his intention to reduce the amount of administrative bloat colleges administrations have to suffer. He says that the relaxing of federal regulations and the need for compliance will reduce the burden on the shoulders of college administrators.

Income Driven Repayment Plans

Trump announced his intentions of slightly raising the cap on the amount students have to pay annually on their student loans based on their income. The proposed cap hike will be set at 12.5% of a borrower’s income. Under REPAYE, the most widely used income driven repayment plan for federal student loan borrowers, the cap was at 10%.

However, it is still unclear whether this will be applicable to all federal loan applicants, or only those who apply for an income driven repayment plan. He also announced plans to include a debt forgiveness clause for students who make regular payment for a period of 15 years, which is five years sooner than under the REPAYE system.

All of these changes will have profound effects on how student loans work in this country. However, the shift from federal to a more private student loan system could allow college administrations more leeway and allow them to pass some of their benefits to their students.