Trump proposed a new version of these income-based repayment plans in a policy speech in October. Essentially, he argued to allow borrowers to cap payments on federal loans at 12.5 percent of their monthly income. Even more, Trump proposes to forgive all debt for borrowers making these capped payments after 15 years. To repeat, payments capped at 12.5 percent of income, and forgiveness for any remaining federal loan debt after 15 years.
It's a mixed bag, but overall this proposal compares very favorably to the existing options. While some of the current plans are limited based on your income level and when you borrowed the loans, generally speaking, the existing policies allow borrowers to do one of two things:
● Cap borrowers' payments at 10 percent of monthly income and offer forgiveness after 20 years.
● Cap borrowers' payments at 15 percent of monthly income and offer forgiveness after 25 years.
How does Trump's proposal compare? Partially, it depends on your strategy around student loan payment. For borrowers who want to minimize their monthly payment at all costs, one of the existing income-repayment plans will probably be a better deal for you, since they cap payments at 10 percent of monthly income rather than 12.5 percent. But for people looking to earn loan forgiveness, Trump's plan could be a huge bargain.