Clinton Will Introduce New Proposal To Help Students Pay Their Loans

Hillary Rodham Clinton participates in a roundtable discussion with students and educators during a campaign event at the Kirkwood Community College April 13, 2015 in Monticello, Iowa. Hillary Clinton announced her candidacy for the United States presidency on April 12, 2015 and is expected to be the frontrunner for the Democratic Party nomination. AFP PHOTO / MICHAEL B. THOMAS (Photo credit should read Michael B. Thomas/AFP/Getty Images)

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Hillary Clinton will propose a 3-month hiatus on student loans

Hillary Clinton will introduce a new proposal on Wednesday to allow the deferment of federal student loan payments for three months so students can restructure or refinance their debt,according to information obtained by the Washington Post. If Clinton becomes president, she plans to make this change unilaterally.

Implementing a 3-month hiatus would cost the government an estimated $1 billion in lost interest. The Clinton campaign argues that facilitating borrowers’ ability to make other financial choices — like buying a home or starting a business — would make up for that loss.

The proposal may help grab borrowers’ attention as they struggle to figure out how to navigate their options. Although the Department of Education has recently made steps to streamline the loan repayment process for borrowers and emphasize income-based repayment plans, borrowers are still having difficulty communicating with student loan servicers, such as Navient and Great Lakes. Many of these servicers don’t tell the borrowers the full-range of options available to them or give them the incorrect advice for their particular situation.

Clinton’s rhetoric on student loans has heated up recently — especially as she compares herself to Donald Trump, who is in the midst of dealing with multiple lawsuits against the now defunct Trump University, an unaccredited “university” under which students bought expensive CDs and enrolled in seminars to learn more about investing in real estate. In addition to facing lawsuits from former students who say they were scammed, Trump University is being sued for fraud by the New York Attorney General’s office.

During a speech at the National Education Association’s annual Representative Assembly on Tuesday, for example, she took several shots at Trump.

“If you want to know how Donald Trump approaches education ,look at his so-called Trump University. It’s hard to believe but they took advantage of vulnerable Americans and encouraged them to max out their credit cards, empty their retirement savings, and destroy their financial futures,” she told the room of educators. “No wonder Donald Trump is being sued for fraud. Someone like Donald Trump shouldn’t have his finger on the button or his hands on the economy and he should not have anything to do with our children’s education and our public schools.”

Under Clinton’s college affordability plan, which she introduced last summer, students would not have to take out loans for tuition at a public university. Through grants, states would be encouraged spend more on public colleges to make them more affordable for students, since states’ spending on public colleges has mostly stagnated or fallen in recent years.


Clinton’s plan would also allow families with income up to $125,000 to pay no tuition at in-state public colleges by 2021, her campaign revealed later on Wednesday. The plan would first go into effect for families earning up to $85,000 a year or less. The income threshold would rise $10,000 a year over four years.

Bernie Sanders released a statement praising the proposal. “I want to take this opportunity to applaud Secretary Clinton for the very bold initiative she has just brought forth today for the financing of higher education,” he stated. “This proposal combines some of the strongest ideas she fought for during the campaign with some of the principles that I fought for. The final product is a result of the work of both campaigns.”


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