This is what critics mean when they argue that the financial world moves too fast for financial education in the classroom to be effective: President Trump’s budget proposal, released Monday, turns the student-loan universe upside down.
The proposal would eliminate subsidized student loans, which pay students’ loan interest while they are in school. It would eliminate the public-service debt forgiveness program for teachers, nurses and police officers. The proposal would also consolidate income-based repayment plans under a single payer.
These are not trifles. Millions of students have made college loan, career, and even college choice decisions based on rules in place at the time they graduated high school. An estimate 550,000 people entered the public service program, expecting their debts to be wiped clean after 10 years of paying. The first wave of forgiveness is set to start later this year.
“Income-driven repayment plans must be a part of every high school student’s financial education. But teachers should be cautious about recommending any specific plan. Currently there are four. But that is likely to change and it’s far from certain how future loan repayment and forgiveness will take shape.”
To be clear, it remains far from certain. The budget is a proposal—not law. Congress will have much to say about the final budget. But that only makes things less clear, which makes financial guidance around the issue more difficult.
Still, we don’t have to give in to critics saying that it’s all a waste of time. Yes, some things—maybe a lot of things—will change. Educators can help students by helping them understand where to find the latest and best information, and which choices leave them the most options.
Teachers can also stay focused on things that will not change—like why college is important and finishing should be their top concern. Students who borrow to attend college but don’t finish have the highest delinquency rates, a heart-stopping 43.5%.
You can also focus on career choices, strategies for cutting college costs through online courses and community colleges, and the value of studying for 21st Century job skills. These are timeless considerations that require no debt.