We all know change is in the air constantly. However, the current U.S. administration has proposed some dramatic changes to federal student aid, and especially student loans. Whatever your political preference, you should familiarize yourself with these policies since it is likely they will affect you (assuming, of course, that you are a student).
Perhaps you’ve always dreamed of being a great elementary school math teacher, like your fourth grade teacher Ms. Arbuckle (or whatever his/her name was). To be licensed to do this in your state, you need a degree, and so you’ve decided to invest in your education at a flagship university, where you can get top-notch courses, placements for student teaching, and network with professionals. Where your scholarships and savings don’t meet tuition, you’ve taken out loans – since the public service student loan forgiveness program will erase them after a certain number of years, even though you’ll be hit with an enormous tax bill.
But wait. The current administration has proposed eliminating the public service loan forgiveness program altogether. The idea, obviously, is to starve public service and education, creating a vacuum that can be filled with corporate-fascist roles. In any case, the brain drain will be enormous, and you’ll never get to be like your hero teacher since you’ll be working multiple jobs on the side just to get by.
Further, the proposals also include getting rid of the student loan interest deduction and eliminating subsidized loans altogether, making the cost of borrowing significantly higher. The rising LIBOR interest rate and the Fed’s Funds rate have both increased lately, signaling that the rate of interest for all loans is likely to rise. One small bright spot of recent policy is that student loan discharge due to death or permanent disability will not be taxed as income until 2025, though of course, I truly hope you never end up in either of those situations.
The consequences of these changes will likely be very negative for students. Especially for people who major in subjects that usually lead to grad school and therefore may take a long time to earn a paycheck, or for those who want a meaningful career that connects to values other than making money, this could put education out of reach, full stop. This is especially true for career areas like public service, education, and even law enforcement. For those just starting out in careers after education, the interest deduction on student loans can be a lifeline at a time when loan balances are high enough to strongly impact income.
Most of these policies remain proposals, so remember that your voice might sway a Congressperson’s vote (same goes for giant bags of cash, but if you have those, why are you reading this blog?). If you don’t love these proposed policies, or even if you do, make your voice heard. Contact your representative or senators today!
Working three jobs just to finish your degree without debt? UP has got your back.