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    The Massive Importance Of The 2020 Elections For Student Loan Borrowers

    The 2020 elections may have greater implications than many young voters would give credit to. Among all that is at stake, theories have increasingly begun to circle regarding the future and sustenance of federal student loan programs. Many believe the essential debate is around continuing such programs or defunding them. 

    There’s also some evidence pointing towards possible reformation, including the widely-talked-about student loan forgiveness program. Here are the most common questions around this.  

    Will The Public Service Loan Program Cease To Exist? 

    While it’s too soon to give a final verdict on the possible termination of public service loan programs, the debate is underway. The program allowed the wavering of loans to students after ten years, provided the borrower has been employed in a non-profit organization. 

    The program has served as a critical financial aid to millions of student loan borrowers employed in under-paying fields who have had the solace of knowing that the loans would eventually waver. The program, however, has remained at the receiving end of widespread criticism from many republicans. 

    The House Republicans have often pushed for the program's repeal. The most recent proposition favoring the repeal was brought to the desk in the form of the Prosper Act. Although the proposition was eventually rejected, it planted a very palpable fear amongst loan borrowers at the time and rumors began to circulate. 

    Twice, the Trump administration pushed to defund the program albeit unsuccessfully. Although it failed to pass Congress both in 2017 and 2019, the 2020 elections will most likely decide the fate of the program. 

    The Problem With Income-Driven Repayment Plans

    Millions of borrowers, including student loan debtors, rely massively on income-driven repayment plans. These are loan repayment plans that workout a monthly reimbursement amount calculated from assessing the borrowers' monthly income, family size, and similar financial conditions. In case of an income increase, the amount will automatically get adjusted for quicker repayment. 

    Many such plans allow wavering of any remaining balance after a period of 20-25 years. Since the plan takes into account the borrowers’ current financial status in setting a repayment amount, debtors increasingly flock towards this program for loan repayment.  

    The significant caveat here concerns itself with how the plan has been framed. There are various loopholes pointed out by financial analysts. Moreover, the program seems to be a somewhat vague combination of different plans, contrasting sets of stipulations, and eligibility criteria. 

    Even the formulas used to calculate the threshold amount varies depending on the plan used within the program. Now, there’s a general agreement that the program is patchy and flawed. Despite this, there’s still no unanimously endorsed solution or alternative to the program.

    The Fate Of The Borrower Defense To Repayment Program

    The Obama administration brought to the table the Borrower Defense to Repayment program, which looked like a promising resolution to the financial troubles of countless student loan borrowers. According to the program, repayment concessions would be granted to those loan borrowers who were swindled into borrowing loans on account of fraudulent college and university schemes. 

    However, with Betsy DeVos’ advancement to the Department of Education, the program has been thrown into legal and political limbo. For this reason, thousands of applications from borrowers have failed to process and these applicants are left stranded in the middle of both legal and political battles that have ensued over the program’s sustenance. 

    Challenging the protection that the program offers loan borrowers, DeVos and her team have even attempted to rewrite the rules pertaining to the program’s functionality. President Trump recently vetoed a bipartisan legislation that promised to return the former protection rights to borrowers. Once again, the fate of the program appears to be on shaky ground leading up to the upcoming elections. 

    Current Proposals For Broad Student Loan Forgiveness 

    At least five broad student loan forgiveness proposals are currently under the spotlight. 

    • The biggest proposal among the loan forgiveness plans is the Opportunities for Heroes Act that aims to forgive incumbent repayment to critical workers
    • Another popular proposal promising relief to healthcare workers is termed the Student Loan Forgiveness for Healthcare Workers Act 
    • $10,000 has been proposed by Democratic members of the Senate to help student loan borrowers across the board
    • House Democrats have proposed the Student Debt Emergency Relief Act, offering $30,000 in widespread student loan forgiveness. 
    • For undergraduates from public schools, Joe Biden came up with the proposal of offering widespread student loan forgiveness

    Bottom Line

    There’s an exceedingly growing concern over the impact of the 2020 elections on student loan borrowers.  While the opinions may be many, it can’t be denied that the fates of borrowers are highly contingent on the senate’s plan that’ll follow the elections.