Officials consider lowering interest rates, relief in bankruptcies but rule out large-scale debt forgiveness
WASHINGTON—The Trump administration is considering ways to help Americans with their student-loan debt, according to senior administration officials, including by refinancing loans at lower interest rates and eliminating debt in bankruptcy.
President Trump has asked advisers for a plan that would rely on policy changes at the Education Department, which oversees federal student-loan lending, and possibly Congress. It would counter student-debt-forgiveness proposals by some Democratic presidential contenders. Sen. Bernie Sanders has called for canceling all student loan debt, and Sen. Elizabeth Warren has proposed canceling up to $50,000 in debt for anyone earning under $100,000 a year, with lower amounts for those making between $100,000 and $250,000.
About 42 million Americans owe $1.5 trillion in student debt, the second-highest form of consumer debt after mortgages. Student debt soared during the recession and in the expansion, driven by escalating tuition costs and a surge in college and graduate-school enrollments.
White House and Education Department advisers think a program to cancel a large portion of student debt would be unfair to taxpayers and unpopular among Republican voters, senior administration officials said. Instead, officials are looking at ways to help borrowers lower their debt. The proposals are in flux and would likely require approval by Congress, aides said. One senior official said a plan probably wouldn’t be completed until next year but the administration believes it can gain bipartisan support.