The rate at which students are able to pay off their student loans could be altered under the Trump administration’s 2020 budget plan, which includes a proposal to eliminate the Public Service Loan Forgiveness (PSLF) program.
The proposal, titled “A Budget for a Better America: Promises Kept. Taxpayers First,” includes $64 billion in funding for the U.S. Department of Education, which represents a $7.1 billion decrease compared to the 2019 funding.
Under the plan, the PSLF program -- which forgives student loans for borrowers who are employed full-time in government and some nonprofit positions who make 120 eligible on-time payments over ten years -- would be cut.
The elimination of the program would affect borrowers who take out a new student loan starting July 1, 2020. It would exclude borrowers who are currently completing their education.
The proposed plan aims to balance taxpayer interests with students’ needs. The White House said it would save an estimated $53 billion over nine years by cutting the PSLF program.
The budget plan might also make colleges share some of the responsibility for student loans. It includes a “request to create an educational finance system that requires postsecondary institutions that accept taxpayer funds to have skin in the game through a student loan risk-sharing program.”
American Council on Education President Ted Mitchell called the cuts "draconian.”
“This is the third year in a row that the Trump administration has proposed to walk away from adequately investing in student financial aid and incredibly important, life-saving biomedical research,” Mitchell said in a statement.
“If enacted, the president’s proposal would cut over $200 billion in federal student aid and also cut billions more in funding for the National Institutes of Health and the National Science Foundation, threatening the well-being of our nation’s students and citizenry.”
James Kvaal, president of The Institute for College Access and Success (TICAS), also criticized the proposed budget cuts.
"These deep cuts overshadow otherwise worthwhile changes, such as automatically enrolling distressed borrowers in income-driven repayment, automating the annual income recertification process, and modernizing student loan servicing," Kvall said in a statement.
The proposal hasn’t been finalized yet, and it will likely be altered before taking effect. On Monday, Presidential adviser Ivanka Trump is expected to appear at an event that will discuss college affordability and reauthorization of the Higher Education Act.