What a Clinton or Trump Presidency Could Mean for the Student Debt Crisis

Nov. 6, 2016 / By

The student debt crisis will be one of the most important issues facing the next President, no matter who is elected Tuesday.

Student debt has tripled in the past decade to almost $1.3 trillion, with more than 25 percent of borrowers either delinquent in paying off their loans or in default, according to a 2015 Consumer Financial Protection Bureau report.

There are now 43 million Americans who carry student loan debt, with the class of 2016 owing an average of over $37,000 in student loans, up from six percent from the class of 2015, according to StudentLoanHero.com, a loan assistance site.

Both the Hillary Clinton and Donald Trump presidential campaigns have released proposals to deal with the issue. After defeating Vermont Senator Bernie Sanders in the primaries, Clinton worked with Sanders to build off his higher education plan that would guarantee free in-state tuition at public colleges and universities for students from families that make less than $85,000 a year. Under her plan, students from families with incomes up to $125,000 would be eligible in 2021.

Clinton has also promised that community college would be free for all students, according to her campaign website.

While Trump’s campaign website does not provide many details about higher education policies, the platform focuses on shifting student loans to private banks instead of the federal government, a Trump policy director told Inside Higher Ed.

Trump has also said he’d “largely eliminate” the Department of Education. Though the Republican nominee for President hasn’t said how he would pay for his college education plan, he has said that as President institutions with large endowments would risk losing their tax-exempt status if they do not spend more of their money on students, according to Inside Higher Ed.

With the election near, many Long Beach college students had long made up their minds on which candidate is better positioned to mitigate the student debt crisis.

David Ochata, a freshman at California State University, Long Beach (CSULB) who has accumulated $5,000 in student debt during his first year of college, says he favors Clinton’s plan since it would help him have more money in his pocket.

“I feel like this debt is going to prevent me from being able to pay for things that I might want or need later in life,” says Ochata.

Another CSULB student, sophomore Daniel Huynh, says Clinton’s plan is preferable to Trump’s, but he has reservations.

“It’s a step in the right direction, but it doesn’t go far enough,” says Huynh, who believes that public colleges should be free regardless of family income. “Student debt scares me a lot. It’s like a cloud over my head.”

In addition to free community college, Clinton’s plan would also allow college graduates to cap their monthly student loan payments at 10 percent of income, with the loans forgiven after 20 years. In a stance that aligns him more with Democrats, Trump has said he also favors income-based repayment plans and student loan forgiveness after 15 years.

“I agree with it wholeheartedly because I know that even with financial aid, there are still many who can’t afford to attend a public college or university,” said Allen Gonzales-Willert, a 22-year old student at CSULB.

The Clinton campaign says that closing tax loopholes that benefit the wealthy will pay for the plan, which is projected to cost $500 billion over 10 years. Students are expected to contribute by working 10 hours a week, according to her plan as issued last year.

Clia Zwilling, a 27-year old recent graduate of Whittier Law School and president of Long Beach Young Republicans, is against Clinton’s college plans. She says it would be too costly.

“Closing loopholes would not be enough,” said Zwilling via email. “The reality is we could pay off our own student loan debt individually or we could have to live with paying for everyone else’s student loan debt through taxes for the rest of our life.”

While the Clinton campaign says that colleges would be held accountable for reining in tuition costs, they have not provided specific details how they would do so.

The Federal Reserve Bank of New York and other experts have noted that as some colleges receive more government subsidies, they often continue to raise tuition and pocket the aid. Zwilling worries that Clinton’s approach would enable public colleges and universities to get away with this pattern.

“Hillary’s proposed policy would only make colleges more expensive,” wrote Zwilling. “Once we see public colleges increase their tuition, then private colleges will start to increase their costs, and the students who belong to households above $125,000 will also have increased debt.”

She believes Trump’s plan to have private banks, not the federal government, lend money to students might lead to more competitive interest rates.

“Before Trump was even running for President, different think tanks believed that this [approach] could help the crisis since the government has its hands too meddled with public institutions,” wrote Zwilling.

Others don’t like the idea of doing away with federal loans like the Pell Grant program, which help low-income students.

“It’s totally backwards and dangerous,” says Montoya of Trump’s plan to privatize student loans. “Non-federally backed loans are more expensive than federally backed loans.”

Despite the ballooning student loan crisis, young people say focus on the issue had lost traction. The issue never came up at any of the three debates.

“I think it was neglected,” says CSULB student Keelin Dunn, who says when Sanders was running for President, the issue was front and center. “There hasn’t been much focus on youth issues, and a lot of the major things that affect us are being ignored.”

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Ben Novotny

Ben Novotny

Ben Novotny is an alumnus of California State University, Long Beach where he majored in Journalism and minored in American Studies. At CSULB Ben was a staff writer for The Union Weekly, the student-run campus newspaper and was actively involved with the school's TV production studio. Ben was a Contributing Writer for The Long Beach Post and the Long Beach Business Journal and has been a Youth Reporter at VoiceWaves for four years.