Trump wants colleges to have ‘skin’ in student loan debt game
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The Trump administration, seeking to tackle the mounting student loan debtOpens a New Window. issue, is weighing the possibility of requiring collegesOpens a New Window. to share some of the financial burden.
Officials outlined a proposal to require colleges that accept taxpayer funds to “have skin in the game through a loan risk-sharing program,” in the president’s proposed fiscal 2020 budget outline – released on Monday.
Students are required to pay back their loans regardless of the “quality” of education received, which may directly affect their ability to fulfill obligations as a borrower. Unfulfilled obligations bear no consequence on the college.
In response to the proposal, House Budget Committee Chair Rep. John Yarmouth’s office said that Democrats support reducing student loan debt, but Trump’s budget “included no policy details.”
Outstanding student loan debt surpassed $1.5 trillion in 2018, doubling over the past decade.
The government is responsible for backing up what students cannot repay – meaning the onus ultimately falls on taxpayers. The current administration’s proposal indicates it is looking to shift some of that burden, and risk, back onto the schools.
The White House is considering issuing an executive order regarding higher education, which could include risk-sharing for student loans, sources told FOX Business.
During a speech made earlier this month at the Conservative Political Action Conference (CPAC), Trump referenced a possible order, suggesting it could pertain to institutions that … (continue reading)