How Trump's presidency might change student loans

Whether you were a Trump supporter or not, the $1.3 billion student debt issue is one that needs to be tackled. Trump called student debt an 'albatross' around the necks of borrowers. While he didn't spend a lot of his election talking about student loans, he did offer several plans to solve the debt problem.

All of the President-Elect's student loan plans are still just that — plans. However, here is how Trump's presidency might affect your current or future student loan (or your children's loans).

Cap on Maximum Repayment Amount

Trump addressed the ever-growing student loan debt dilemma in his rally in Columbus, Ohio, on October 13. One of his proposed solutions was to cap how much a borrower would have to repay. He said, "We would cap repayment for an affordable portion of the borrower's income, 12.5%, we'd cap it. That gives you a lot to play with and a lot to do."

Currently, the Revised Pay As You Earn, or REPAYE, plan allows borrower's to cap their monthly payments at 10% of their discretionary income. However, this is only applicable for federal loans, and the plan requires borrowers to extend the length of their loan, meaning they will pay for their debt longer.

Trump's plan to cap loan repayment at 12.5% might look higher initially, but depending on how he enforces the plan, it could save a lot of money for borrowers. If Trump allows the monthly cap to be applied to private loans, then this plan will benefit many borrowers.

Trump's official picks for cabinet and administration positions:

Student Loan Forgiveness After 15 Years

Trump added to his speech in Columbus, Ohio, "And if borrowers work hard and make their full payments for 15 years, we'll let them get on with their lives. They just go ahead and they get on with their lives."

Currently loan forgiveness is available through special forgiveness programs, such as the public service loan forgiveness plan and the teacher loan forgiveness plan. The income-driven repayment plan will also forgive student loan debt after 20 or 25 years of payments, depending on which plan you qualify for.

Trump's 15-year forgiveness plan would drastically cut the length of loan repayment and finally offer solutions for individuals weighed down with private loan debt. Trump did not give exact numbers to how much this plan would cost or save Americans, but it was said that it would be paid for through reduced federal spending overall. Also, it is believed that this plan would save the government money through fewer defaulted loans. (See also: How to Stop Student Loans From Ruining Your Life)

Cut College Costs

Trump also addresses the root of the student loan dilemma — costs set by colleges. On his site, Trump wrote that he plans to, "work with Congress on reforms to ensure universities are making a good-faith effort to reduce the cost of college and student debt in exchange for the federal tax breaks and tax dollars."

Colleges have no incentives to lower costs, so why should they? If Trump were to offer significant tax breaks, then students might see lower tuition bills, too.

Aid for Non-Traditional Schools

Right now, federal aid is for students attending schools that are accredited through the Department of Education. This means that if a vocational school or nontraditional school program is not accredited, students cannot receive federal aid to help them attend. Trump said on his campaign website that he would help make it possible for any student to attend and complete whatever school or program they wanted.

According to his website, he wants to "ensure that the opportunity to attend a two- or four-year college, or to pursue a trade or a skill set through vocational and technical education, will be easier to access, pay for, and finish." (See also: What Is Student Loan Forbearance, Anyway?)

So What Does Trump's Plans Mean for You?

If you are already paying student loan debt, then there is a possibility that the plans will not fully be developed and implemented for another year or two. Taking on something as big as student debt and bloated college costs is not an overnight job.

However, if you are currently in college or are a parent with a child attending college in the next three years, then there is a possibility that Trump's plan will benefit you. For the rest of America, it is hard to determine just how much Trump's plans will cost.

More From Wise Bread:
How to Stop Student Loans From Ruining Your Life
Don't Get Trapped by These Higher Education Scams
8 Ways to Get Student Loan Debt Forgiveness