President Donald Trump and Education Secretary Betsy DeVos released a budget Monday for fiscal year 2019, which includes a proposed cut of nearly $4 billion in annual funding for student aid programs. Here’s what you need to know:
The plan could bring changes to your student loan repayment plans
The proposed 2019 fiscal budget proposes changes to the terms of student loan repayment, including how interest is paid on low-income students’ loans while they are still going to school, according to The Washington Post.
Borrowers' monthly loan bills could cost more
If the budget passed with the proposed changes, the cost of higher education could increase for borrowers by more than $200 billion throughout the next 10 years.
Trump’s proposed plan would shorten the payment period for undergraduate students with loans to 15 years, but it would raise the bill each month by just more than 12 percent of income for both undergraduate and graduate students.
Public servants may not receive loan forgiveness
The budget also proposes the elimination of the loan forgiveness plan for public servants.
“Future borrowers would no longer have the option of working as teachers or social workers to receive debt forgiveness after 10 years of loan payments,” The Washington Post reported.
The Institute for College Access & Success estimates that teachers who took out loans for graduate school would pay more than three times the “amount required than if they had access to loan forgiveness.”
Work study programs could see some cuts
Trump proposes slashing nearly $790 million from federal work-study programs, and the administration wants to change the formula used for allocating money for work-study programs away from basing it on a college’s enrollment of students who receive Pell Grants.
