US President Donald Trump and Democratic presidential candidate Joe Biden speaking during the first debate of the 2020 presidential campaign.
Brian Snyder | Reuters
Whether Donald Trump or Joe Biden wins the presidency can have a significant impact on the country’s 42 million student loan borrowers.
Student loans have overtaken credit cards and auto debt as a burden on Americans, and each year 70% of college graduates start their lives in the red. The average balance is around $ 30,000, up from $ 10,000 in the early 1990s, and many borrowers owe $ 100,000 or more. The typical monthly payment is $ 400.
There is a clear desire for change: More than half of Americans say student debt is “a major problem” for the country, according to a Politico / Morning Consult poll.
Here’s what the different perspectives of applicants can mean for borrowers.
Trump proposed monthly payments for student loan borrowers that would represent 12.5% of their discretionary income. Undergraduates would pay for 15 years and graduate students for 30 years.
Meanwhile, Biden called for setting monthly loan bills at 5% of borrowers’ discretionary income and they would be on the plan for 20 years.
Cancellation of public service loan
Biden would keep the program but make changes to it. Instead of canceling borrowers’ remaining debt after a decade, it would write off $ 10,000 per year of their debt for up to five years.
Student loan forgiveness
As president, Biden said he would forgive the tuition-related federal student loan debts accumulated at public colleges and historically black colleges and universities for those earning less than $ 125,000 a year.
It would also write off $ 10,000 in student debt for all borrowers.
Trump has not said anything about the drastic cancellation of student loans.