Roger Yu

USA TODAY

President Trump is proposing to cut back student loan programs aimed at borrowers who need the most help.

Outlined in his 2018 budget that was released Tuesday, his proposals reflect Trump’s priorities in streamlining federal programs and reducing government involvement in the loans business.

It’s unlikely that all of Trump’s proposals will be enacted as Congress will need to sign off on the budget. But student advocates criticized the proposals' details and said eliminating the targeted federal aid options would contribute to rising defaults and mounting loan balances.

The budget contains three main proposals – cutting back on the number of loan repayment options; eliminating the program that allows some former students who took jobs in public service to have their debts waived; and changes to Pell Grants, federal grants issued to students based on financial need.

These proposals would apply to loans that were issued on or after July 1, 2018. They would not apply to loans issued after July 1, 2018, if those loans are used to finish the borrowers' current course of study. In other words, a college junior seeking a loan on July 1, 2018, to finish her bachelor’s would not be subject to these potential changes.

Here are some questions to consider:

Q: Trump wants to make changes to repayment plans. What would the changes be and how would they affect borrowers?

Of the $1.4 trillion in student loans outstanding, more than $1 trillion are federal ones issued by the Education Department. The rest are from private banks.

Borrowers of those federal loans who have difficulty coming up with the monthly payment – due to low income, a growing family or financial hardship --- can apply for at least one of four options in income-driven repayment (IDR) plans. These plans allow you to adjust your monthly payment based on your income, and your debt can be forgiven if you make payments consistently for a required number of years.

The terms of the four plans — such as the payment rates and the number of years you must pay to have your debt forgiven — vary. But generally, the lower the income, the lower the monthly amount that's owed.

Student advocates have argued that having four different options is confusing. And Trump apparently agrees.

“It becomes really overwhelming for consumers to feel like they've picked the right plans for themselves,” said Betsy Mayotte, director of consumer outreach and compliance for American Student Assistance, a nonprofit advocacy group. “Just simplifying (the program) is a must-have.”

Trump’s income-based repayment plan would cap a borrower’s monthly payment at 12.5% of their income. For undergraduate borrowers, any debt balance remaining after 15 years would be forgiven. For graduate school debt, any balance after 30 years would be forgiven.

Whether borrowers ultimately pay less under the proposal largely depends on the type of income-based plans they’re currently enrolled in. But generally, graduate students will pay more than undergraduates since they have to pay for 30 years before their debt is forgiven, Mayotte said.

The budget also calls for eliminating a need-based federal loan that doesn't accrue interest while the borrower is in school. "Eliminating subsidized loans would increase the cost of college by thousands of dollars for many of the six million undergraduates who receive those loans each year," wrote the Institute For College Access and Success (TICAS), an advocacy group, in its blog.

Q: Trump wants to eliminate a program for public service workers. What would this mean?

One of the programs targeted in Trump’s budget is the Public Service Loan Forgiveness program, which is administered by the Department of Education.

If you have student debt, but have a job with a qualifying employer in public service, your debt is forgiven after 10 years of payments.

Some borrowers who are in the program were worried that Trump might eliminate their eligibility for forgiveness. But the budget states that the proposal would apply only to loans issued after July 1, 2018.

Mayotte thinks Congress will refuse to eliminate the program entirely, given the shortages in certain job categories, such as public defenders. But other changes that would limit the program are likely, she said.

The definition of “qualifying employer” may be changed to limit eligible employers. Or the program could cap the total amount of loans that are forgiven.

Q: What changes are proposed for Pell Grants? What would this mean for my studies?

Pell Grants are popular and given by the federal government to students who demonstrate financial need.

The budget proposes cutting $3.9 billion from the Pell Grants reserve, according to an analysis by TICAS. The government spent $28.2 billion on Pell Grants in 2015-2016.

Earlier this year, Congress approved a change in Pell Grants so that they could be year-round. Traditionally, the grants have been used only for nine months of study, or two semesters per year – typically spring and fall.

Pell Grants usually cover only a small portion of the total cost of education. But by allowing students to apply their Pell Grants to summer school, they could finish school early and earn degrees faster, Mayotte said.

While making grants available year-round would mean summer school students would have greater access, cutting the program's funds from its reserves would mean "the administration's budget undermines Pell Grants," TICAS says in a statement.

"The budget increases the cost of borrowing for millions of students," it said.

Follow USA TODAY reporter Roger Yu on Twitter @ByRogerYu.