What does Trump's education secretary pick mean for student loan debt?
As school choice proponents cheered President-elect Donald Trump’s nomination of Republican donor and philanthropist Betsy DeVos as education secretary Wednesday, it wasn’t clear where she stands on higher education and the rising student loan burden.
As well, Trump’s own higher education policies are still developing. During an October speech in Columbus, Ohio, Trump proposed an income-driven student loan repayment program capping repayment at 12.5% of a borrower’s income and forgiving loans after 15 years of payments. Currently, the most widely available income-driven repayment plan, known as Revised Pay As You Earn, or REPAYE, caps income levels at 10% and loans are forgiven after 20 years of payments.
Trump also said he plans to hold colleges accountable for investing in their students, cutting tuition and reducing costs related to federal regulations. He has indicated support for a system in which private banks, instead of the government, would issue federal student loans.
Some proposals to the current federal student loan system would require congressional backing and action, but the president can use executive action to push through other changes.
Sen. Lamar Alexander, R-Tenn., chair of the Senate Committee on Health, Education, Labor & Pensions, posted a statement on Twitter on Wednesday saying that he looked forward to working with DeVos “on the upcoming reauthorization of the Higher Education Act, giving us an opportunity to clear out the jungle of red tape that makes it more difficult for students to obtain financial aid and for administrators to manage America’s 6,000 colleges and universities.”
K-12 school choice — allowing the use of public funds to pay for the school of a student’s choosing, be it public, private or charter — is a cornerstone of DeVos’ political and educational interests. DeVos, who hasn’t worked directly in education, is a supporter of charter schools and voucher programs. She is on the board of directors of the Great Lakes Education Project in Michigan and is the chair of the American Federation for Children, which both favor school choice.
Trump called DeVos, 58, a “brilliant and passionate education advocate” in a news release Wednesday. He underscored his plans to “reform the U.S. education system and break the bureaucracy that is holding our children back so that we can deliver world-class education and school choice to all families.”
DeVos’ advocacy would support Trump’s policy proposals to increase school choice, especially for low-income students. DeVos and husband Dick led an unsuccessful ballot effort in 2000 to amend the Michigan constitution to allow vouchers for students to attend private schools using taxpayer dollars. Later, DeVos and her husband formed the All Children Matter PAC to support pro-voucher candidates.
One of the nation’s largest education unions has opposed the nomination.
“DeVos has no meaningful experience in the classroom or in our schools,” American Federation of Teachers President Randi Weingarten said in a statement Wednesday. “The sum total of her involvement has been spending her family’s wealth in an effort to dismantle public education in Michigan. Every American should be concerned that she would impose her reckless and extreme ideology on the nation.”
Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.
This article first appeared in NerdWallet.
