TAMPA, Fla. — President Donald Trump has released a 10-point plan to reform the Higher Education Act. While it focuses on multiple aspects of higher education, a key issue targeted is the national problem of growing student debt.

Civil engineer Anthony Deabreu is struggling under the weight of his debt. “In student loan debt, I’m at $105,000 that I owe," he said.

Deabreu took out a combination of government and private loans for his education at the Florida Institute of Technology. And he is not alone. Right now, nearly 40 million Americans owe a collective $1.5 trillion. 

Experts say that number is expected to grow to $2 trillion by 2022 if we continue down the same path.

Trump’s new proposal promises to tackle the issues surrounding higher education, with a direct focus on student loans. One goal is to increase education around borrowing.

"When they offered the loans, they just kind of like, 'Oh yeah, in the end you can consolidate, your payments will be lower, and then you can afford it with your job you’re going to be doing which is some big high-end job,'" said Deabreu. "But in reality, it’s different afterwards.”

 Credit professionals are frustrated by graduates' lack of education and understanding around student loans. 

“We were taught in the old days that the purpose of college was to maximize your return on the education," said Harold Stephenson, a director at Credit Care Counseling in Tampa. "A person with a college education would have 4 to 5 times more available income than a person who did not. Well, now, if before you even get the degree, you owe $80,000 to $100,000. They’re not calculating that figure. OK, so yes, there is a huge disconnect between the cost of education and how much are you going to earn, because of that cost."

Graduates are struggling to keep up with the debt. According to the Brookings Institute, approximately 40 percent of student borrowers will default on their loans at some point by 2023. And this creates even more problems. 

“Student loans do not go away. Student loans cannot be bankrupted. And the longer you do not pay, you develop negative amortization, which means your balance gets larger and larger. And the payment requirements get larger and larger," said Stephenson.   

The president's new proposal aims to stop the trend of increasing student loan debt in two real ways.

First, consolidating the way students pay off their loan with one, income-driven payment plan. This plan would cap monthly contributions at 12.5 percent of your discretionary income.

And two, after 15 years of making monthly payments, the rest of a student’s loan would be forgiven.

At this point, the proposal still leaves it up to borrowers to pay their bills regularly. And this only tackles federal loans, not private ones.

At this point, this is just a proposal. Congress still needs to go to work on it before anything becomes law.


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