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What the Presidential Candidates are Saying About Student Loans

Article

With the amount of the country’s student loan debt continuing to grow and the presidential elections just around the corner, it’s important to hear what each of the 2016 presidential candidates have to say about student loans, and what they’re going to do about college tuition and student loan debt, especially for physicians, dentists, and other medical professionals.

Disclosure: this article is not intended to take a position for or against a particular presidential candidate but instead offer a summary of a candidate’s public statements on student loan debt and student loan forgiveness in the United States. For this purpose, we’ve included sources at the end of this article for additional reading.

$1.2 trillion - that’s the current running total for student loan debt in the United States. Recent figures show that $3,000 in student loan debt is accrued every second, and the average student loan debt figure for graduating students is around $33,000. And according to the Association of American Medical College, medical school graduates are accruing around $183,000 in debt, on average.

With the amount of the country’s student loan debt continuing to grow and the presidential elections just around the corner, it’s important to hear what each of the 2016 presidential candidates have to say about student loans, and what they’re going to do about college tuition and student loan debt, especially for physicians, dentists, and other medical professionals.

Hillary Clinton (Democrat)

While her position has evolved over the past several months, former Secretary of State Hillary Clinton has stated that within her plan by 2021, families with an income at $125,000 per year or below will have access to in-state public colleges and universities, tuition-free. This would apply to many individuals that plan to go to medical school, as the income is determined by their parents, when they enroll in a college or university.

In her immediate plans, Clinton also stated that all families making $85,000 a year or less will be able to attend public colleges and universities tuition free, and that all community colleges will offer free tuition. This would also apply to future physicians and dentists, as the income is calculated based on a student’s parent’s earning.

In terms of Clinton’s stance on the student loan debt crisis, one of her plans is to allow borrowers to refinance their student loan interest rates, and to cut interest rates on government student loans for all future students. This is great for medical professionals, as student loans can come with steep interest rates, depending on the type of loan, and any time you can refinance and reduce your interest rate you’re going to be saving money on the total overall you’ll owe for your student loans.

Under Clinton’s plan, she has asserted that graduates will never have to pay back more than 10% of their income in student loan payments, and that college debt-forgiveness will kick in after 20 years.

This percentage will obviously impact some medical professionals more than others, but especially for those that work in non-profit or public service areas of medicine, this can save you from crippling monthly payments, depending on your income and total debt.

Clinton has also specifically outlined what she would do to handle student loan debt for entrepreneurs; allowing these entrepreneurs to defer their loans with no accruing interest or payments for up to a three-year period. For social entrepreneurs that work in communities of need, Clinton is offering up to $17,500 in student loan debt-forgiveness. This would apply to medical professionals in some cases, particularly if you’re planning to start up your own firm or company, and intend to become a job creator.

Donald Trump (Republican)

Business owner and entrepreneur Donald Trump has made some statements in regards to college tuition and student loan debt, but the reports on what he intends to do if he is elected president have been vague thus far. When it comes to student tuition, Trump has stated that the federal government has been profiting off of student loans and driving up tuition costs, which he intends to work on. This could mean lower interest rates for medical students.

Trump also wants to modify the admissions process for colleges and universities in relation to student loans, and would ask that these institutions set more rigorous admissions standards, to block students from attending schools if they seem unlikely to succeed in completing their degree. For many medical students this probably wouldn’t be a concern, but it’s important to note. In his comments,

Trump has also stated that colleges need to take on more responsibility and risk when it comes to student loans and who they give these loans out to, and provide loans to students that are likely to be able to repay their loans after finishing their degree.

When it comes to student loan debt, Trump has called for restructuring of student loans, but has come out against full loan forgiveness. For student borrowing, Trump has proposed tying student loan offers for university students to their future job prospects and ability to pay the loans, based on a student’s college major. In this case, students intending to study medicine or dentistry would likely maintain current loan offerings, or receive even more support for student loans, as the medical field is a lucrative and rewarding industry.

He has also recommended that the federal government move away from providing as many student loans, instead moving students to private lenders for their student loan needs. This could have a negative impact on medical students that need to take on a lot of debt in order to complete medical schools, as often times private lenders have different requirements and higher interest rates than government lenders.

Another important position Trump has advocated for, in relation to student loan debt, is to punish colleges and universities financially if too many of their former students have defaulted on student loan debt, to have these institutions feel that they have “skin in the game.” He has stated he is opening to extending loan terms, lowering interest rates, and focusing on job creation, to ensure that students have jobs that will allow them to pay back their student loans. Extending loan terms could help ease the monthly payment burden, and lowering interest rates would save future medical students on the amount they’ll owe.

Gary Johnson (Libertarian)

Gary Johnson’s comments about student loans and student loan debt have been limited. In the comments Johnson has made, he stated that the federal government is primarily responsible for the large amount of student loan debt by offering interest rates on student loans that were artificially low, but said he would consider lowering interest rates on these loans even further. Lower interest rates wouldn’t help medical students on the on-set, but it would save them when it comes to the total amount they’d pay during the repayment of their student loans.

Johnson has also said that guaranteed government loans have cause colleges and universities to charge students twice as much, and has suggested a free market approach to the education industry and student loans. If education institutions were competitively priced, this would also save medical students on tuition costs, but could impede their ability to get loans for medical school.

Jill Stein (Green)

Of the four presidential candidates, Jill Stein’s plan for the student loan debt crisis is considered to be the most radical. In comments that she has made throughout her appearances, Stein has stated that she intended to erase the $1.2 trillion in student loan debt that individuals in the United States currently hold. This could be a huge opportunity to help millions of individuals, including physicians and dentists, in debt, but it could hurt the economy overall.

As a stop-gap measure to handle student loan debt, Stein has asserted that she would allow students to take almost 0% interest loans for their education, comparing it with the decision the United States government made to “bailout” several financial institutions with very low interest loans. Lower interest rates will be good for incoming medical students.

Stein has proposed doing quantitative easing on all existing student loan debt, where the Federal Reserve Bank would “create” electronic money to eliminate the debt. In Stein’s comments she did say that it would be different than when the Federal Reserve bought debt from financial companies in 2008, and that it would entail having the Federal Reserve expand the money supply, so they could cancel out the student loans. This has the possibility of devaluing the American dollar, and disrupting the economy, but does pose a unique opportunity to help several medical professionals become debt-free.

LeverageRx is an online financial help desk for physicians, dentists and other medical professionals looking for personal financial and legal assistance. The platform offers unbiased reviews and comparisons of products and services relevant to medical professionals including physician mortgage loans, physician contract review, disability insurance for physicians, life insurance for physicians, student loan refinancing for physicians, relocation services for physicians and practice loans for physicians. To ask a financial question and get qualified advice from experts across the country, visit LeverageRx.

Sources

https://www.aamc.org/download/447254/data/debtfactcard.pdf

https://www.debt.org/students/

https://www.hillaryclinton.com/issues/college/

http://www.studentdebtrelief.us/news/donald-trump-on-the-student-loan-crisis/

http://college.usatoday.com/2016/06/22/this-is-trumps-stance-on-student-loans-and-it-could-hurt-poor-students/

http://www.cnsnews.com/news/article/susan-jones/green-partys-jill-stein-cancel-student-debt-bail-out-young-people

http://www.ontheissues.org/2012/Gary_Johnson_Education.htm

http://www.mrctv.org/blog/gary-johnson-will-consider-lowering-student-loan-interest-rates-if-elected-president

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