Leaked Education Budget Would Explode The Student Debt Crisis
New details of the Trump Administration’s proposed education cuts came to light late Wednesday and the so-called skinny budget would be devastating to Virginia families. Documents leaked to The Washington Post reveal the administration is proposing eliminating the Perkins Loan program, which provides subsidized college loans to disadvantaged students (the program is currently up for renewal).
The administration is also proposing to end the Public Service Loan Forgiveness program that forgives the federal student loans of undergraduate borrowers who spend 10 years in public service while making qualified payments. Over 550,000 people are currently enrolled in the program, which is slated to begin forgiving the first wave of loans this October. The documents leave in limbo the future of current enrollees in the program.
“Hundreds of thousands of Virginia families are struggling every month to pay off crushing student debt,” said Progress Virginia executive director Anna Scholl. “Thousands more are trying to find a way to pay for skyrocketing college tuition for their children. The Trump administration’s proposal to scrap programs that help Virginians attend and pay for college isn’t just irresponsible—it’s cruel. Their proposals would make higher education more expensive for the student least able to pay while eliminating repayment options for dedicated public servants like teachers, social workers, and nurses. We need solutions to reduce the growing student debt crisis—not explode it into a full blown catastrophe. What on earth is this administration thinking?”
Over 1 million Virginians owe over $30 billion in student debt. The average Virginia college graduate leaves school with over $26,000 in debt. Student debt is the second largest consumer debt in the nation and quickly growing. It’s financial obligations threaten not only consumer spending, but also saving for homes, cars, and retirement.
In 2017, the Virginia State Senate approved SB1053 to create a Borrowers’ Bill of Rights for Virginia student loan borrowers while requiring servicers to obtain a license from the State Corporation Commission. The House Commerce & Labor Committee on a party line vote rejected the bill. Both the House and Senate again deferred action on proposals from Delegates Marcus Simon and Marcia Price as well as Senator Janet Howell to assist Virginia borrowers in refinancing their student loans. Virginia’s student loan authority was created in 1972 and eliminated in 1997. The loan portfolio was sold to Sallie Mae, which later became Navient.