What to Expect with the Trump Tariffs and Student Loans Forgiveness
Today’s blog focuses on student loans and how things will likely change under President Trump. We can forget about student loan forgiveness. The SAVE plan (Saving on a Valuable Education), which reduces in some cases monthly payments to $0.00, can be kissed goodbye. But if the Trump tariffs go in effect, your monthly expenses will skyrocket. Let’s review the effect this may have on you.
Updated on January 3, 2025.
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What’s to Come for Student Loan Forgiveness?
If the federal government wants to cut a check to wipe out student loans, that puts an extra $100,000 in my pocket, which I can spend in my state; that is a benefit to the state. But instead of this being a financial argument, it’s become a political issue. But I’m already seeing a shift where it will likely get worse before it gets better.
Below is a blog post on the Republican states that opposed the SAVE plan and student loan forgiveness, and how insane I thought that was, because it affects their constituents. You can read that article below.
Now, I have to call out what has just happened. Republican Virginia Fox from North Carolina just filed the College Cost Reduction Act. The goal is to increase the amount you pay in student loans. One administration is trying to reduce it, and another is trying to increase it. It doesn’t make sense, but it is what it is.
The problem is, if the cost of tuition doesn’t go down, none of this works. The theory is that if universities pick up the costs of student loans that are not collected, somehow, that will drive education costs down. No, it won’t! To make up for the losses, what will universities do? Increase tuition! It seems like the same line of rationalization with the Trump tariffs, that somehow taxes would reduce your expenses.
They also want to cap how much you can borrow at $50,000 for undergraduates and $100,000 for graduates. This creates a problem because you can’t go to law school, medical school, or dental school for less than $100,000. The average cost for dental school is over $300,000.
While, in theory, they’re trying to pass the buck to the colleges by making them responsible if these loans are uncollected to drive the cost down, it’s going to be hard, if not impossible. What has gone down in price? Is it cheaper to buy a car now than it was 10 years ago? What about a home? No. What about college? We know the answer to that one, too.
The Trump Tariff
So, the problem is that Republicans are already making moves to increase the amount that has to be paid back in student loans. My suggestion to you, and I’ll post that video link below, is that if Trump’s tariff comes in at 25%, you’ll pay 25% more. President Trump is saying that others will pay for it, similar to how he claimed Mexico would pay for the wall. But we’ve seen this before.
- The Truth Behind Trump Tariffs and Debt Management (blog post).
- The Trump Tariff: Here’s What You Need to Know (YouTube Video).
In 2016, tariffs on Mexico and China affected us because the government had to issue a large $15 billion aid package to farmers who were going bankrupt.
Part of debt management means being prepared for everything as best as possible. If student loans might increase next year and there’s a new tax and higher expenses because of the Trump tariff, you’ll be hit from both sides. Think carefully about any debt you’re about to take on with the next administration, if your expenses are likely to increase because of student loans and the Trump tariff.
The Trump tariff has been estimated to cost around $3,500 to $4,000 out of pocket per year, which is about $300 a month. If student loans add another $300 a month, that’s $600. Where is that $600 a month coming from? If you make $600 more at work, that’s great. If not, you’ll have to figure out how to cut $600 from your budget to break even, which means you will likely end up in more debt.
So keep that in mind for any big purchases moving forward. If you have any questions, whether you agree or disagree with me, post them in the comments section of the accompanying YouTube video. I’ll be more than happy to comment. Feel free to like and subscribe. Take care, everyone.
Updated information: Please note that it is being reported that Representative Virginia Foxx fell down the West Side of the White House. No further information is available, but I will update the post when it does, and I wish her a speedy recovery.
Contact Information for Rep. Virginia Foxx:
Washington, DC Office
2462 Rayburn House Office Building
Washington, DC 20515
Phone: (202) 225-2071
Fax: (202) 225-2995
Hours:
Monday – Friday, 9am – 5 pm
Boone District Office
400 Shadowline Dr, Suite 205
Boone, NC 28607
Phone: (828) 265-0240
Fax: (336) 778-2290
Hours:
Monday – Friday, 9am – 5 pm
Clemmons District Office
3540 Clemmons Rd, Suite 125
Clemmons, NC 27012
Phone: (336) 778-0211
Fax: (336) 778-2290
Hours: Monday – Friday, 9am – 5 pm
Her Twitter account handle is @virginiafoxx.
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Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.
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