TRUMP TO ELIMINATE SUBSIDIZED STUDENT LOANS?!?!?
The Trump administration is proposing to end student debt forgiveness for those who enter public service, according to a budget document released late Monday. Students would still be eligible for the same dollar amount of loans, but all would be unsubsidized. This change would save taxpayers nearly $40 billion over a decade. Since eligibility for subsidized loans is based on income before college, two individuals with the same income after college may end up paying different amounts.
The main difference between the two programs is that interest accrues on unsubsized loans while the borrower is still in school. For subsidized loans, interest does not accrue until the borrower leaves school. With over six million borrowers using subsidized loans every year that interest free benefit adds up.
The subsidized loan program costs billions and drives up the price of college and fails to realize how progressively it was designed to achieve. Congress recognized that subsidized loans for graduate students were more trouble than they were worth and eliminated them. It should finish what it started and abolish subsidized loans once and for all.