Winners and losers in President Trumps student loan plan
Alexander Holt
President Trump proposed major changes to the federal student loan program in his first budget request to Congress. These include reforms to the Income-Based Repayment (IBR) program and the interest-free benefit on some loans for undergraduates. This paper offers a first look at the likely net effect of these changes proposed for undergraduate and graduate students (excluding the effects of eliminating the Public Service Loan Forgiveness program). We use hypothetical borrower scenarios to compare how much borrowers with different loan balances would pay under the Trump proposal as compared to the existing program. Generally, we show that undergraduate students payday loans New Mexico would receive a net increase in benefits relative to the current program due to earlier loan forgiveness. Those benefits are largest for borrowers with above-average debts and relatively higher incomes in repayment. Read more