6 Out of 10 Borrowers Would Pay Higher Taxes to Get Student Loan Forgiveness

The buzz about the upcoming 2020 presidential election is everywhere you look. The election stands to be an important turning point in politics, and with a large cast of players, there’s a lot of information to compare before election day.

We surveyed 1,254 high-earning student loan borrowers — 96% of which are registered voters — on their thoughts about the upcoming election and the results were surprising, as candidates’ student loan proposals were not considered a top issue for voters despite two-thirds of respondents saying they’re anxious about what the election will mean for their student loan options.

Key findings from the Student Loan Planner® election survey

• 75% of respondents believe that whoever wins will bring no positive changes for student loan borrowers.
• The majority of borrowers (59%) would agree to pay higher taxes indefinitely if their student loans were forgiven now.
• Student loans aren’t a top priority when voting, with only 15% of borrowers saying it’s the most important issue. Twenty-five percent (25%) believe it’s the second most important issue, while 32% believe it’s the third most important issue.
• When it comes to student loan proposals, borrowers are most familiar with Bernie Sanders’ student loan plan (72%) and Elizabeth Warren’s reform proposal (65%).
• When asked which candidate in the 2020 election they believe would be the worst for their overall finances, 53% percent of respondents said Donald Trump, and 23% said Bernie Sanders.
• The top fears for borrowers are that nothing will change with this election (34%) and that Public Service Loan Forgiveness will be eliminated (27%).
• Sixty-eight (68%) percent of borrowers are anxious about what will happen with student loans with this upcoming election.

It’s important to note that 96% of respondents are registered voters, with 50% identifying as Democrats and 20% identifying as Republicans. Additionally, 64% of respondents identify as female.

Anxiety and fears around the 2020 election

Every presidential candidate has a student loan proposal that promises change for voters if elected. But many student loan borrowers are disillusioned. They believe that nothing will actually change and there will be no positive shifts for student loan holders.

“I don’t really think anyone will actually do anything to help those in debt,” remarked one of the survey respondents.

“Ideally I’d hope for it to get better for borrowers, but realistically just don't want it to get worse,” explained another.

A whopping three-quarters (75%) of survey respondents believe that there will be no changes to support them.

On top of that, there is lingering anxiety that’s pervasive among borrowers. Sixty-eight percent (68%) of borrowers are anxious about what will happen with student loans.

In our previous survey on mental health and student loans, we found that 90% of borrowers have anxiety about their student loans. Not knowing what the future holds with this presidential election may exacerbate that feeling.

In this election survey, borrowers said that they are most concerned that nothing will change (34%) or that specifically the Public Service Loan Forgiveness (PSLF) program will be eliminated (27%). PSLF is a student loan forgiveness program that allows public service workers to get their loans forgiven after 10 years of service, tax-free.

When it comes to worries about PSLF being eliminated, borrowers may be thinking about Trump’s 2020 budget proposal. He wants to eliminate PSLF for new borrowers.

It’s clear that the presidential election is causing anxiety and concern among student loan borrowers. But what’s interesting is that we found that even though it’s a major cause of concern, student loan policy is not one of the top factors borrowers said they are considering in this election.

2020 campaign issues outweighing student loan proposals

Our survey shows that only 28% of borrowers are voting primarily based on a candidate’s student loan proposal, whereas 72% are not.

When we asked our respondents where student loans fall in order of importance as a voter, student loans weren’t even in the top two.

The majority of respondents (32%) consider it the third most important issue, while 25% consider it the second most important issue, and 15% consider it the most important issue.

Another 24% consider it the fourth or less important issue, while 4% claim the issue is not important at all when voting.

What’s interesting is that this doesn’t change even for borrowers who owe an extreme amount of debt.

For example, we found that 30% of borrowers who owed more than $400,000 believed student loans were the third most important issue, 26% said second most important issue, 22% said most important, 19% said fourth or less, and 3% said not important at all.

Although student loan debt is a major source of anxiety for borrowers, other issues like climate change, healthcare and gun control may be taking center stage for voters going to the polls.

“Student loans are one of my primary concerns as a voter, behind global warming (climate change) and healthcare. I believe that public universities should be free or low cost (~$10K-20K for 4 years) to attend,” said one of the respondents.

More taxes for student loan forgiveness

We found that the majority of our respondents would agree to pay higher taxes for the rest of their life in exchange for student loan forgiveness.

Nearly 6 out of 10 (59%) respondents said they’d agree to pay higher taxes for the rest of their life if it meant that their student loans would be forgiven now.

Not only that, but according to our data, 1 in 6 borrowers would pay more than 30% of their income for the rest of their life in exchange for forgiveness, while 1 in 3 would pay more than 20%.

What this data tells us is that some voters are so concerned about the current impact of their student loan debt on their finances that they’re willing to take on a longer-term tax burden.

The student loan reform borrowers want

When it comes to presidential candidates’ student loan proposals, the majority of our respondents (72%) are familiar with Bernie Sanders’ plan. Another 65% percent are familiar with Elizabeth Warren’s plan, while 27% are familiar with Donald Trump’s plan.

Bernie Sanders has big plans to forgive all student loans, while Warren has a plan to forgive up to $50,000.

But when asked which student loan reform proposal would help them the most, the majority of our respondents said lower interest (27%).

Coming in a very close second, 26% of borrowers would like more forgiveness options. Seventeen (17%) percent of borrowers would like the ability to deduct all student loan interest, and 16% would like the tax consequences on forgiven loans to be eliminated. Currently, borrowers who get their loans forgiven under an income-driven repayment plan will have to pay taxes on the forgiven amount.

Eight percent (8%) of borrowers would like the PSLF program to be expanded, but only 1% of borrowers would like more repayment options. Another 1% said “N/A” to what would help the most, and another 4% said “other.”

Some respondents said they’d like student loans to be interest-free, while another wanted streamlined repayment options with no interest or a flat interest rate.

Methodology

We surveyed 1,254 high-earning student loan borrowers from the Student Loan Planner® email list, 96% of which are registered voters, on their thoughts about the upcoming election. Sixty-four percent (64%) of respondents identify as female, 35% as male, and another 1% identify as non-binary or prefer not to say. Six ty (60%) percent of borrowers owe between $100,000 and $400,000 in student loan debt.

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