Budget seeks end to subsidized student loans, forgiveness
WASHINGTON (AP) — The Trump administration is proposing to eliminate subsidized student loans and end student debt forgiveness for those who enter public service, according to a budget document released late Monday.
The proposals are likely to face criticism amid calls to make college more affordable and as millions are struggling to pay off student loans.
In a budget document made public Monday night, the administration seeks to save just over $1 billion by doing away with the subsidized student loan program. For undergraduate students who qualify, the government pays the interest while they remain in college. Students can borrow up to $23,000 during their four years in college. The current interest rate is 3.76 percent.
The document also calls for eliminating the Public Service Loan Forgiveness program with the aim of saving $859 million. That program was launched in 2007 with the idea to motivate university graduates to take government and teaching jobs in remote rural areas. Under the program, the remainder of a student’s debt is forgiven after he or she makes 120 qualifying payments, or typically after 10 years.
Student Debt Crisis, an advocacy group, says on its web site that over 550,000 people are on track to receive the benefit with the first wave of forgiveness set for October. The document did not provide any details on how that group might be affected.