Trump student loan in 2019
The policy of ex-US president aimed at easing the credit burden for students was perceived positively in American society. There were good reasons for this – the amount of Trump student loan debt to educational institutions has already exceeded $ 1.3 trillion. However, on the initiative of Devos from July 1, interest on student loans will be increased.
US Secretary of Education Betsy Devos has promised to cancel the orders of Barack Obama to ban interest on loans for education. Despite the fact that educational loans are one of the most acute problems of American youth, the head of the department intends to defend the banks.
From July 1, interest on student loans will increase from 16% to 18%. Thus, students taking a loan of $ 25 thousand this year will have to pay the full amount plus interest, that is, about $ 4.5 thousand more.
Today, the Trump student loan of 43 million Americans to educational institutions is more than $ 1.3 trillion and every second it grows by $ 2 thousand. The average borrower owes to the state about $ 28 thousand. It is becoming increasingly difficult to pay a loan to many young Americans, and in 2016 the American media wrote about those who escaped debt to Europe or Canada.
In 2015, Barack Obama imposed a ban on additional interest at a rate of 16% for borrowers who defaulted on payments of loans made before 2010. It was this order that Devos canceled. Of the more than $ 1.3 trillion total student loans, $ 137 billion is currently in default.
The Obama administration has set a limit on the size of payments – a maximum of 10% of wages. According to the program of the former president, if borrowers who faithfully paid a loan failed to repay it within 20 years, the remaining amount of debt burns out.
During the election campaign, the President promised to change the Trump student loan program. According to his plan, students were supposed to deduct 12.5% of their salary, and the remaining debt could be canceled after 15 years. So far, Devos has not commented on such an initiative.
Following the order of Devos, Navient, the largest student loan lender, announced plans to acquire Trump student loan worth $ 6.9 billion from JP Morgan Chase. Navient did not even interfere with the lawsuit filed by the Consumer Financial Protection Bureau: the lender has been accused of deceiving borrowers for years in a desperate situation, taking advantage of gaps in the law and financial illiteracy of students.