By LOUIS DENICOLA
Hillary Clinton and Donald Trump have officially received and accepted their respective party's presidential nominations, and the general election is underway.
While higher education and student loans may not be the most important issues for everyone, over 40 million people have student loan debt, and millions more must figure out how to afford higher education in the coming years.
Here's an overview of each candidate's ideas for changing the higher education and student loan systems, and a response from three student loan experts.
Hillary Clinton's proposals
Democratic nominee Clinton outlines her proposed changes to higher education and student loans, collectively referred to as the New College Compact, on her campaign website. Several changes could affect future students, including:
- Free in-state tuition at four-year public colleges and universities for students of families making $85,000 or less, starting in 2017. The income limit will increase by $10,000 each year until it reaches $125,000 in 2021.
- Tuition-free community college for working families.
- Students will be required to work 10 hours per week to help chip in for the cost of attendance. To help with this, Clinton says she will expand work opportunities to build career skills.
She also proposes extra federal funding for universities and student assistance programs, along with buy-in from states and higher education institutions:
- A $25 billion fund for historically black colleges and universities, Hispanic-service institutions and minority-serving institutions.
- A 15-fold increase in funding for on-campus child care.
- Maintain or increase state funding for higher education.
- Accountability for colleges and universities that don't keep tuition costs down or help their students succeed.
- Penalties for colleges and universities if their graduates default on loan payments.
If she becomes president, Clinton proposes an immediate executive action for a three-month freeze on federal student loan payments. Current student loan borrowers can use this time to consolidate their loans, switch to a different repayment plan, and rehabilitate their delinquent or defaulted loans.
In addition to the moratorium on payments, Clinton calls for the following changes for current -- and future -- borrowers.
- Borrowers can refinance their student loans at today's interest rates.
- Borrowers can simplify or receive automatic enrollment in income-driven repayment plans.
- Resources to help borrowers who have defaulted on their loans get into good standing and rebuild their credit.
- Lower interest rates on future federal student loans so the government won't make money on the loans.
- Payroll deductions for employers, allowing borrowers to make automatic student loan payments from their paycheck.
- Entrepreneurs can defer loan payments, with no interest for up to three years. Entrepreneurs in underserved communities or fields may be eligible for up to $17,500 in loan forgiveness.
- AmeriCorps members that complete two years of national service, plus an additional year of public service, will have their federal loans forgiven.
Clinton says all her proposals will be paid for by closing loopholes and limiting some tax expenditures for high-income taxpayers.
Trump's potential proposals
Republican nominee Donald Trump's campaign website doesn't have a comprehensive overview of his plans for higher education or student loans. However, Trump and Sam Clovis, Trump's campaign policy director and national co-chair, have hinted at potential proposals during various interviews:
- Overhauling the federal student loan program and removing the government from the lending process in favor of private banks.
- Requiring universities and colleges to weigh in on the lending decisions and share in the risk of student loans.
- Student loan awards possibly depending on your major and job prospects after graduation.
- Eliminating profits from federal student loans.
- Closing parts of the U.S. Department of Education.
Clovis also expects the campaign to come forward with more specifics during the fall campaign.
Three student loan experts discuss the proposals
We asked three student loan experts to weigh in on each candidate's proposals and to share what reforms they'd like to see.
Removing government profits from student loans
Both candidates said that the government shouldn't profit from student loans, but Jan Miller, a student loan consultant in Ashland, Oregon, thinks it's actually OK that the government makes a little money on some student loans.
"The government already gives away billions in loan forgiveness. There's [typically] no credit check, so your interest should be a bit higher," Miller says.
Miller feels that the current system is good for the most part and that the problems come from a lack of administrative execution and borrower education.
He thinks the schools often don't have enough information to help students -- "they know how to get students into debt, not out of it" -- and financial planners rarely understand how student loans work.
He's even had clients receive misinformation from student loan servicers, or get information that applies to that servicer but doesn't address the borrower's overall situation.
Similar to statements made by both Clinton and Trump, Miller thinks schools should be more accountable for their students' debt load. He thinks this is especially important when students enroll in majors with low earning potential.
Privatizing the lending
Miller disagrees with Trump's proposal to privatize the student loan industry. He reasons, "The people who need student loans the most may have the worst credit; they're often the poorest people ... They may not be able to get [loans from private lenders]."
Like Miller, Jay S. Fleischman thinks Trump's plan to privatize student loans could be a problem because it removes the guarantee of availability for borrowers with poor credit or low income.
Fleischman warns that privatization "removes critical borrower protections such as income-dependent repayment options and the ability to have student loans forgiven or canceled in situations arising from college wrongdoing or borrower disability."
Offering tuition-free college
Fleischman addressed Clinton's proposal for tuition-free college and refinancing student loans. He says that while it may make higher education more affordable and accessible, it's important to consider the added strain to the system.
Fleischman says more college-bound students could mean more competition, which would put pressure on high schools to produce high-quality candidates. The increase in undergraduate students could also strain universities' infrastructure and staff and affect the quality of the education.
Mark Kantrowitz is a publisher at Cappex.com, a site that helps prospective college students find financial aid and additional college choices. He thinks Clinton's plan for free college tuition would help many students in the future, but says it's unlikely to pass a Republican-controlled Congress due to the tax increases she's proposing to pay for it.
Letting borrowers refinance their federal loans
As for refinancing current loans, Fleischman points out that Clinton hasn't defined which loans will be eligible. He thinks it could be a significant aid to borrowers, especially if they'll be able to refinance private loans with the government's money, but he questions how the government will fund the program.
Trump and Clinton agree on a few ideas when it comes to higher education and student loans, but overall they take a very different stance on several important points.
It's hard, if not impossible, to predict which proposals would become law if one of them wins the election. However, these stated proposals can give you an idea of potential policy changes for student loans.
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