Strapped families hope Trump’s speech will tackle student loans

Personal Finance

President Donald Trump is widely expected to hit on the economy, immigration and infrastructure in his first State of the Union speech on Tuesday. One issue that seems to be on the back burner is the ever-increasing cost of college.

A college degree is now the second-largest expense an individual is likely to make in a lifetime — right after purchasing a home.

Tuition has historically risen about 3 percent to 5 percent a year, according to the College Board. During the recession, declining public funds caused tuition to spike. At private four-year schools, average tuition and fees rose 54 percent in the last decade. Tuition plus fees at four-year public schools, which were harder hit, jumped 71 percent over the same time period.

Families with students in four-year private colleges spent almost $47,000 in 2017-18, up 3.5 percent from the year earlier. At in-state, four-year public colleges, it was more than $20,000, according to the College Board.

As a result, families are relying on loans and aid more than ever before to make a degree more affordable. Ninety-eight percent of college applicants and their parents said financial aid would be necessary to pay for college, according to The Princeton Review’s 2017 College Hopes & Worries survey.

“These worries are understandable and they can be exasperated if the current administration moves to cut back on the student loan forgiveness program and any other federal support including Pell grants and subsidized loans for low-income students,” said Robert Franek, The Princeton Review’s editor-in-chief.

In the past, Trump has called for shortening the federal student loan forgiveness period (while increasing the monthly payments) and eliminating the Public Service Loan Forgiveness Program completely for borrowers who take out loans after July 1, 2018.

The president has also advocated for reeling in subsidized Stafford loans and promoted alternatives to college altogether, including career and technical training and, of course, apprenticeships.

“I applaud the idea of giving students more options but not at the sake of taking dollars away from students who want to go to school,” Franek said.

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