Lyle Daly

The Motley Fool

There’s a diverse range of views about student loans among the 2020 presidential candidates. Here’s how the next president of the United States could affect how you pay for school.

With the total amount of student loan debt surpassing $1.5 trillion, student loans have become a hot-button political issue that figures to play a major role in the 2020 presidential election.

Although some candidates have more thorough plans than others for student loan reform, they’ve all given at least some indication of how they feel on the subject. If you’re wondering how things could change depending on who’s in office, let’s take an in-depth look at the views all the major 2020 presidential candidates have regarding student loans.

Crushed by student loans? Here’s how to spend less and save more

Drowning in loan debt? You may have to ditch your dream job

President Donald Trump

We’ll start with President Donald Trump, who as the incumbent will almost assuredly be the Republican candidate.

Based on what Trump and his administration have said and his proposed 2020 budgets, two of his primary student loan objectives are:

To simplify repayment plan options on federal student loans

To save money for the federal government

To accomplish the former, the Trump administration has proposed cutting the many federal loan repayment plan options to just two: a standard plan and an income-based plan.

The standard plan would be the same 10-year repayment plan option that’s currently available. The graduated repayment plan and the extended 30-year repayment plan would both be eliminated.

The income-based repayment plan would be at most 12.5% of the borrower’s income. Undergraduate students would receive loan forgiveness on any remaining balance after 15 years of payments, which is five years sooner than when they’d receive loan forgiveness on the current repayment plans. Graduate students would receive loan forgiveness after 30 years of payments, which is five years later than what the current plans offer.

The 2020 budget proposal aims to terminate Public Service Loan Forgiveness to cut costs for the federal government. Another cost-cutting measure in this proposal is ending subsidized student loans, which are federal loans where the federal government pays the interest during the following time periods: while the student is in school, for the first six months after graduation, and in periods of deferment or forbearance.

Student loans:How they can fatten or shrink your tax refund

Senator Bernie Sanders

Sanders ran a campaign in 2016 based on proposals that were considered far to the left, even for the Democrats, although they have since become much more widely accepted. One such proposal was that all students be able to attend public colleges without paying any tuition.

His plan to fund this was to have the federal government pay for two-thirds of the costs and the state where the college was located to pay for one-third.

The senator created the College for All Act in 2017, which aims to:

Offer tuition-free college at four-year public colleges to students from working and middle-class families (those earning $125,000 or less)

Offer tuition-free community college to all students

Joe Biden, former vice president

In 2015, when Biden publicly announced that he would not be running for president in the upcoming election, he stated that he supported offering students four years at public colleges tuition-free. He expanded on this during a 2018 speech, saying that the government could finance this plan by getting rid of the stepped-up basis loophole that heirs use to pay smaller capital gains taxes on their inheritances.

He was also part of an Obama administration that supported legislation in 2015 to simplify discharging student loan debt during bankruptcy.

Biden has, however, faced criticism for his previous track record as a senator. He was part of a 2005 legislation that prevented people from discharging or renegotiating their student loan debt in bankruptcy court.

Senator Elizabeth Warren

Warren has released one of the more detailed plans to address student loan debt and make college more affordable. The plan includes at least partial student loan forgiveness for 95% of debtors, with the amount forgiven being based on income. Here are the specifics on this:

Households with incomes under $100,000 would have $50,000 in student loan debt canceled.

For households with incomes between $100,000 and $250,000, the debt cancellation amount would decrease by $1 for every $3 in income above $100,000. So a household with an income of $160,000 would receive $30,000 in debt cancellation.

Households with incomes of $250,000 or above would receive no debt cancellation.

Her plan also includes expanding the Pell Grant program by investing an additional $100 billion over 10 years and expanding eligibility for the program.

To fund this plan, Warren has proposed an Ultra-Millionaire Tax. This would be a 2% annual tax on all the families with $50 million or more.

Senator Kamala Harris

Harris has pledged her support for students to get a debt-free college education and said that this would be one of her priorities if she becomes president. She has supported Sander’s College for All Act as well as the Debt-Free College Act of 2018 authored by Democrat Senator Brian Schatz.

The Debt-Free College Act stipulates that the federal government would match each state’s higher education funding, and then those funds would be used to cover any sort of college costs a student has that exceed their expected family contribution.

During a CNN town hall, Harris also mentioned that a focus of hers would be getting rid of for-profit colleges that prey on students. She has experience fighting these colleges in the past during her time as the California attorney general, notably winning a $1 billion judgment against Corinthian Colleges.

Beto O’Rourke, former congressman

O’Rourke has publicly stated that he doesn’t support the idea of free college for all, but that he does support free community college and debt-free college for students who attend four-year public universities.

He has also stated that more student loans should be refinanced at lower interest rates and that the Public Service Loan Forgiveness program should be expanded.

Senator Cory Booker

Booker is a supporter of Schatz’s Debt-Free College Act. Other than that, he hasn’t gone into his opinions about student loans yet, but he did author a bill focused on bridging the wealth gap.

That bill is the American Opportunity Accounts Act, and it stipulates that each American child receives an account with $1,000 at birth. Each year thereafter until the child turns 18, the account would receive an additional deposit of up to $2,000, with the amount depending on their family’s income. The interest rate on the account would be about 3%.

Account holders could only access the money after they turn 18, and they must use it for select allowable expenses, such as paying for higher education or purchasing a home.

Pete Buttigieg, mayor of South Bend, Indiana

In a crowded field full of Democrats who support either tuition-free or debt-free college, Buttigieg stands out as one of the few not to have pledged support to either idea. He has stated that since Americans with degrees earn more on average than Americans without degrees, he doesn’t think it’s fair for those who didn’t go to school to subsidize the degrees of those who did.

Buttigieg has said that he wants college to be much more affordable, specifically by expanding the Pell Grant program and getting states to increase their spending on higher education. He also mentioned that he wants people to be able to refinance their federal student loans at lower interest rates.

Julián Castro, former mayor of San Antonio, Texas, and member of Obama’s cabinet

When Castro announced that he’d be running for president, he stated that he wanted to make certification programs, apprenticeship programs, and the first two years of college accessible and affordable.

He has since taken it a step further and said that he believes the United States should work towards tuition-free public colleges/universities, certification programs, and apprenticeship programs.

Andrew Yang, entrepreneur

Yang has some of the most unique policy ideas of any candidate, with his most well-known idea being a universal basic income of $1,000 per month for every U.S. citizen over the age of 18.

He also has several policy ideas aimed at reducing both student loan debt and the cost of higher education. To reduce student loan debt if elected president, he has pledged to:

Ensure that the federal government does not profit at all from student loans by reducing interest rates.

Issue a “Bailout for the People” where recent graduates receive a partial reduction of their student loan principals and receive debt forgiveness a set time after graduation.

Propose a plan where the federal government buys private student loan debt from the lenders, and then offers borrowers a plan where they pay 10% of their salary for 10 years. After 10 years of payments, any remaining balance would be forgiven.

Change bankruptcy laws so that student loan debt is dischargeable when filing for bankruptcy.

Senator Kirsten Gillibrand

Gillibrand is a supporter of both Sander’s College for All Act and Schatz’s Debt-Free College Act. In addition, she authored the Federal Student Loan Refinancing Act, which would allow borrowers to refinance their federal student loans at a fixed interest rate of 4%. That’s lower than the current interest rates for federal loans disbursed on or after July 1, 2018 and before July 1, 2019, which are:

5.05% on Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students

6.6% on Direct Unsubsidized Loans for graduate students

7.6% on Direct PLUS Loans for graduate or professional students and parents of those students

Senator Amy Klobuchar

Klobuchar is one of the more moderate Democrat candidates, and she has spoken out against the ideas of tuition-free college and student debt forgiveness. She claims that both options are unrealistic.

Her proposals, which she says she has found ways to fund completely, are to provide free community college, to offer federal student loan refinancing to current and former students at an interest rate just above 3%, and to expand the Pell Grant program.

In the past, Klobuchar has supported the College Cost Reduction Act, which led to both income-based repayment plans on federal student loans and the Public Service Loan Forgiveness Program, and the American Opportunity Tax Credit, which is a tax credit of up to $2,500 families can receive for college costs.

Representative Tulsi Gabbard

Gabbard is a supporter of Sander’s College for All Act. She has also backed the Pathways to Affordable Education Act, which focused on increasing the funding for Pell Grants and making more students eligible for these grants, and HELP for Students and Parents Act, which would incentivize businesses in the form of a tax credit to help their employees pay back student loans.

Wayne Messam, mayor of Miramar, Florida

Messam’s proposal is different from that of most Democrats who generally focus on either debt-free or tuition-free college. The South Florida mayor wants to wipe out all outstanding student loan debt entirely, including both federal and private student loans, and then focus on reducing the cost of higher education.

To pay for this bailout, Messam says he would repeal the Trump Administration’s tax cuts for wealthy Americans.

John Delaney, former congressman

Although Delaney is not a supporter of tuition-free or debt-free college, he does believe that everyone should be entitled to go to community colleges or technical schools for free. He wants to make all higher education more affordable by offering more grants to students in financial need and by cutting the costs of student loans.

Delaney is also a strong supporter of making both public and private debt dischargeable in bankruptcy, and he’s the sponsor of the Discharge Student Loans in Bankruptcy Act of 2017.

Representative Tim Ryan

Ryan is for both debt-free and tuition-free college, and he has a history of supporting these causes. He has co-sponsored several bills regarding education and student loans, including:

Sander’s College for All Act

Schatz’s Debt-Free College Act

The Aim Higher Act, which would invest more in federal student aid, incentivize states to invest more in higher education, and expand the Public Service Loan Forgiveness Program

The Student Loan Fairness Act, which would provide student loan forgiveness for those who have made 120 monthly payments in the previous 10 years

A divisive issue for the 2020 election

Student loans and the cost of higher education are clearly an area where there’s a deep divide between the Republican and Democratic parties.

On the Republican side, Trump’s proposals mainly focus on simplification of repayment plan options and cutting costs for the federal government. Although there’s a range of proposals on the Democratic side, all of them want to ease the burden of student loan debt and reduce the costs of going to school.

While it takes more than just proposals to affect change in any area, the results of the 2020 election could have a significant impact on the student loan landscape going forward.

The Motley Fool owns and recommends MasterCard and Visa, and recommends American Express. We’re firm believers in the Golden Rule. If we wouldn’t recommend an offer to a close family member, we wouldn’t recommend it on The Ascent either. Our number one goal is helping people find the best offers to improve their finances. That is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

Save thousands on student loan interest

Offer from the Motley Fool: Many people are missing out on lower student loan interest rates because they don't take the time to research their refinancing options. Our picks of the best student loan providers can help you save thousands of dollars in interest over time. Click here to uncover the best-in-class student loans providers we could find in 2019.