WEST PALM BEACH, Fla. — U.S. President Donald Trump is proposing changes that could impact those with student loans.
"Student loans are a burden," said Melenie Ramos, a freshman at Palm Beach State College in Florida.
Ramos comes from a family that knows the effects of student loan debt firsthand.
"I would say avoid it because I actually have a brother and a sister-in-law that took out student loans when they went to school and they’re still trying to pay it off," Ramos said. "They’re living with us now to save up and to pay it off."
It’s a cautionary tale for students preparing to take on debt.
"I may have to potentially take out $10,000 per year," said Gina Vallarella, a junior at Florida Atlantic University.
In an effort to hold colleges and universities more accountable, Trump has a list of reforms to student loan programs inside his proposed $4.7 trillion fiscal 2020 budget. The proposal would eliminate subsidized loans, meaning the loan would accrue interest while a student is still in school.
The Public Service Loan Forgiveness Program would also end. This program forgives federal student loans for borrowers who are employed full-time in an eligible federal, state or local public service job or nonprofit job who make 120 on-time payments over ten years. The potential elimination of this program already concerns some students.
"When I graduate, I'm going to have to pay my loans back. And if the interest is higher, it’s more money I’m going to have to pay back," Vallarella said. "And if I don’t have a job it’s just going to add up until I eventually get a job and pay the student loans back."
But opinions aside, financial experts said there’s a reason why the Trump administration would be for it.
"If you think about it from a total cost stand point, eliminating the subsidized loans will hurt borrowers in so much as it will cost them more over the time of the loan," said Tom Essaye, president of Sevens Report Research . "Now somebody with the Trump administration is probably going to say true. But we’re going to make them think more about how they spend those dollars, and we’re going to make them spend those dollars more responsibly."
If Trump's student loan proposal is approved, it would apply to loans originating on or after July 1, 2020.
To read the President's full budget, click here.
