INDIANAPOLIS, Ind. – A portion of President Trump’s official budget is drawing criticism for how it would affect those that take out federal student loans.
In his 2019 fiscal year budget, the president has proposed a wide range of student loan reforms, namely a retooling of the income driven repayment system (narrowing down the number of plans from four to one), the elimination of subsidized loans for undergraduates, and the elimination of the public service loan program.
While the moves are expected to save the country billions, some argue the negative effect that getting rid of the loan repayment program would have on public servants would outweigh the savings.
The Marion County Public Defender Agency says eliminating the program would damage its ability to recruit and retain young attorneys, who already often deal with low pay and mountains of student loan debt.
“We’re talking about minimum life standards that will be severely cut if they’re not given some sort of relief from their student loans,” Chief Counsel Ann Sutton said.
The starting pay at the Marion County Public Defender Agency is $47,000, but it’s not uncommon for attorneys to leave law school with more than $100,000 in debt.
“There are so many law students out there that want to do public service and want to help people. And the sad part about doing away with loans like this is it’s going to cut that population right out of the mix,” Sutton said.
Phil Schuman, who is the director of financial literacy at IU says beyond their obvious contributions, public servants play a role in improving the local economy where they serve. He adds that eliminating the program could reduce that impact
“Taking away the ability for those people to not have to stress so much about their student loan situation, I think it’s going to have a negative effect on those local communities,” Schuman said.
Despite the potential negative impact of the budget, Schuman says that it’s important for people to remember that now it’s nothing more than an administration wish list, and not policy that’s set-in stone.