In bid to lower debt load, White House proposes student-loan limits
S E E D E D C O N T E N T
The Trump administration on Monday proposed new limits on federal student loans taken out by parents and graduate students as part of a broader proposal to curb the cost of college.
White House officials included the plan in a list of suggested changes to the Higher Education Act, a sweeping federal law that governs student lending. The legislation is getting its first overhaul from Congress in more than a decade.
Ivanka Trump, the daughter and adviser of President Donald Trump, unveiled the plan at a meeting of the National Council for the American Worker, an advisory group that Ivanka Trump helps lead.
“We need to modernize our higher-education system to make it more affordable, flexible and outcomes-oriented, so all Americans, young and old, can learn the skills they need to secure and retain good-paying jobs,” Ivanka Trump said on a call with reporters.
A primary goal of the proposal is to curb the growth of college tuition rates and reduce the nation’s student debt load, which has reached nearly $1.5 trillion and has more than tripled since 2003.
The White House’s proposed solution is to cap federal loan programs available to students’ parents and to graduate students. The plan doesn’t propose specific limits, but officials suggested it could vary based on academic program.
Colleges often argue they have been forced to raise tuition to make up for reduced funding from their states. Many Democrats have echoed that position, with some calling for greater government support for schools.
Sen. Patty Murray, the top Democrat on the Senate education committee, says the plan misses the “root cause” of the problem: “that college costs are rising exponentially and most students can’t afford college without taking on massive amounts of debt.”
“In fact, this proposal would end up hurting students by reducing the amount of federal aid for students and taking billions out of the pockets of borrowers,” she said.
Borrower advocates said they welcome attention to the topic but don’t think the White House plan will help. Federal loans for students’ parents and graduate students total about $25 billion a year, compared to $151 billion in total federal student loans.
James Kvaal, president of the nonprofit Institute for College Access & Success, said the plan takes the wrong approach, adding that there’s “no evidence” the availability of federal loans has led to higher college costs.
“The solution is to invest more in Pell scholarships for low-income students, to work with states to make public colleges and universities more affordable,” said Kvaal, who is also a former policy adviser to President Barack Obama.
White House officials say they also want to simplify the loan repayment process, a goal shared with Sen. Lamar Alexander, R-Tenn., who chairs the Senate education committee and is leading the push to update the Higher Education Act.
Lamar said it is “helpful” to have the White House’s perspective as he works with Democrats on the overhaul.
“I share the administration’s goals to make a college education worth it and to make it simpler to apply for federal student aid and pay back student loans,” he said.
Several items on the White House’s wish list were also included in the Education Department’s budget proposal for next year, including the elimination of public service loan forgiveness, a program that can erase debt for certain borrowers after 120 months of repayment.
Instead, the White House says all federal borrowers should get undergraduate debt wiped clean after 180 months of repayment.
Education Secretary Betsy DeVos praised the White House plan as “an important roadmap for working with Congress to rethink higher education and pass meaningful reforms.” She added that legislation to simplify lending “should be passed immediately.”
The White House is also asking Congress to make federal Pell grants available to be used in short-term certificate programs, and to take other steps intended to help workers gain skills outside of traditional colleges and universities.
“The higher education system has been slow to adapt to the changing nature of work,” the White House said. “Millions of jobs remain unfilled in part due to a lack of Americans with appropriate skills.”
Congress is still in the early stages of its work to reauthorize the Higher Education Act. Alexander has made it his mission to update the legislation before he retires in two years. The law, originally signed in 1965, received its last major update in 2008.
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In 2010 Obama moved the banks out and the federal government into the business of student loans. Since then the Universities have raised the cost of tuition and student debt has increased to the tune of $1.5 Trillion....Limits are needed!
So... The solution to college debt is to just have less college? If students can't afford to go they just cant go? One of trump's long term goals is to create a new uneducated workforce of Americans who are totally dependent upon their employers.
That is what it sounds like to me.
They say college is expensive and their way to combat it is to limit what people can borrow to attend university.
Less people having money to go to university. Less people going to university.
I not sure how I feel about this but I know how I feel about all of these college graduates with worthless degrees. Somehow are youth was sold a bill of goods that trade schools are a bad thing, now we are in a tradesman drought.
So what we have ended up with is a generation who believes they are entitled to a high paying job and have no work ethics.
I can agree to a point. If a kid gets a degree in medieval French poetry, I don't see many job opportunities.
My Nephew decided college wasn't for him. He went to junior college to learn diesel repair. He is going to be a big rig mechanic.
"The White House’s proposed solution is to cap federal loan programs available to students’ parents and to graduate students. The plan doesn’t propose specific limits, but officials suggested it could vary based on academic program.
In other words you can't get a crazy loan that you could never repay. The idea that the federal government could be a lender was a bad one from the beginning. How about putting a lid on what colleges can charge students?
You're assuming that the cost of college does not artificially inflate to match the increased availability of government money.
Thanks. I think it is a local company he has his eye on, right off the interstate here.
Though I don't think he has looked into it very hard. I looked at the place and it looks like they do mostly tires and light repair.
Smart kid. You won't see his job outsourced to India.
It is ridiculous. In our poor state, the state college is about 15k a year.
I am proud of him. He had a rough time in HS. Liked to get into trouble. He turned his life around though, has a job and works to put himself through these courses.
He more or less set a goal and is perusing it.
Good for him. The transportation industry is booming/growing and the need for diesel mechs is very high. Most all transportation companies are looking for mechs now and the pay is good.
Have him look for a regional or country wide company or International transport co. Better pay, better bennies. There is of course more than just the trucking industry. Auto Industry need diesel mechs as do many of the tug/barge companies and companies like Navastar, Cummins etc also the heavy eqpt manufactors. Cat etc etc.
It's a darn good field to be in and he'll never be without work. Wages run between $45 and $65K per year. It depends on experience, schooling, various certificates...
I don't see this quote in the article. Who is saying this?
Anyway, I can't agree that this all belongs to Obama somehow. The government became the lender in 2010, but before that, it was guaranteeing private loans anyway, so there's little difference. It's still a source of guaranteed money for schools no matter what they want to charge for tuition. That tuition, by the way, had already been increasing faster than inflation for many years.
The current problem has been an ongoing team effort for decades. When the program began in the 50s, the loans were only available for science/tech fields and teaching (one of which is an area in which you can actually make money). Now you can get a loan for gender studies or French poetry at some high-tuition private school. How are you going to pay that back?
Over the years, we have gradually made it easier and easier for colleges to collect as much free money as they like at the expense of students who (along with their parents) feel they have to go to college at any cost or they have no future. And when revenues decline, as they did in the recession, rather than dial back spending, they just increase tuition.
Trends in College Spending: Where does the money come from? Where does it go? What does it buy?
There has also been tons of corruption in the system for a long time.
WHO PAYS? HOW INDUSTRY INSIDERS RIG THE STUDENT LOAN SYSTEM—AND HOW TO STOP IT
There is a lot that needs to be done and it's not going to be a simple fix. I think maybe not every degree is worthy of a government loan, there should be some kind of cap on the amount, and the school itself should be accountable for the outcome. Colleges shouldn't just get to receive the money and call it a day. They should be held responsible for the degree progress and post graduate employment of the students for whom they receive loans.
It's not. It came from an opinion piece written not long after Obama got the government into student loans.
The government became the lender in 2010, but before that, it was guaranteeing private loans anyway, so there's little difference.
The difference is the billing. If you notice, whenever you remove the direct involvement of the individual from the product being purchased, (substituting the government) the price goes up dramatically! It dosen't matter if it's student loans or health care. The government blindly pays for others and up goes the price. It is logical when you think about it.
Now you can get a loan for gender studies or French poetry at some high-tuition private school. How are you going to pay that back?
Yup, that's a big part of this. Would a bank give you a big loan for French poetry?
I don't have to go on. Youv'e got it!