Donald Trump has recently spoken about his position on the student loan crisis, and his opinion might surprise many. In an interview with thehill.com, Trump slammed the federal government for profiting on federal student loans. “That’s probably one of the only things the government shouldn’t make money off. I think it’s terrible that one of the only profit centers we have is student loans,” said Trump. As we have reported in the past, the Federal Student Loan programs turned a profit of $41.3 billion in 2013 while many borrowers were struggling to make their financial ends meet.
Trump also discussed how he would help solve the student loan problem by creating jobs in the private sector. “I don’t want to raise the minimum wage. I want to create jobs so people can get much more than that, so they can get five times what the minimum wage is,” said Trump. While this is a long-term solution, Trump offered no information on what he would do immediately to help reduce the burden of student loans for millions of borrowers. Specifically, he has not given any information on what will happen with the Student Loan Forgiveness programs that are currently offered by the Department of Education.
Student Loan Forgiveness Programs
With the popularity of the Student Loan Forgiveness programs and enrollment into these programs skyrocketing, Trump could find it very hard to be vocal against these programs or face losing the student vote. Though Trump is a conservative, his position on student loans seems to be somewhat liberal, and we expect that, if elected, he will continue to promote the loan forgiveness programs.
By improving the job market borrowers will be able to make their payment rather than using their deferment and forbearance. If Trump really feels that the government should not be profiting on student loans, then there is a possibility that he will elect to use the profits to expand the loan forgiveness programs as well as offering relief to borrowers who need immediate relief.
Trump’s Position on Student Loans
While Trump has been extremely vague about his plans for student loans if elected, here’s what we do know so far:
- Trump has stated that he does not want the federal government profiting off of student loans any longer (and blames government for driving up tuition costs)
- He thinks the Department of Education could “largely be eliminated,” but did not elaborate on how the $28 billion spent on Pell Grants for students would be affected
- He wants to restructure student loans but says government “can’t forgive these loans” outright…
- He wants to return student lending to private banks and away from the federal government (in order to improve salary data and allow students to make more informed decisions about whether the tuition costs are worth it)
- Proposed tying student loan decisions to the borrower’s future job prospects, an assessment likely based on the student’s major
- He wants to punish schools financially when their students fail to repay their loans, adding that he wants colleges themselves to have “skin in the game” and would be on the hook if too many of their former students defaulted on their loans
- He wants colleges to set more stringent standards for who is admitted, denying access to those it deems unlikely to succeed
As Trump continues to discuss his “plan” to fix the student loan crisis, we will continue to update this page with additional information to keep you informed.
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.