Trump’s budget would end student loan forgiveness program

Personal Finance

“Graduate students would be paying significantly more,” Kantrowitz said.

Pell Grants would be expanded to cover short-term, training programs.

The Public Service Loan Forgiveness Program is eliminated in the proposed budget. This program allows former students who fulfill certain public service positions — such as public school teachers or health researchers — to have their loans erased after 10 years of on-time payments. Nearly two-thirds of student loan borrowers who’ve shown interest in the Public Service Loan Forgiveness earn less than $50,000 a year.

“You may have fewer people pursuing degrees in areas that will lead to public service occupations,” said Kantrowitz. “You won’t have as many prosecutors and public defenders. You won’t have as many people pursuing law enforcement or becoming EMTs, firemen and members of the military.”

People whose loans fall into delinquency would be subject to more stringent enforcement as the proposal also calls to “streamline the Department of Education’s ability to verify applicants’ income data held by the Internal Revenue Service.”

Some 30 programs would also lose funding, including the Supporting Effective Instruction State Grants, 21st Century Community Learning Centers and Federal Supplemental Educational Opportunity Grant programs.

The president’s proposal is subject to approval by Congress and is likely to be modified by legislators.

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