On Monday of this week, President Trump proposed an idea that he believes will help curb student loan debt. By setting a cap on how much money students can take out, it can lower the cost of college. This was just one of several sweeping changes the president wants to make to the Higher Education Act. This legislation is due for an overhaul since it was first enacted a decade ago.
Ivanka Trump, an advisor to her father President Donald Trump, revealed the plan. It was shared in front of the National Council for the American Worker This is a group that Ivanka helps lead and is a passion project for the president. His main goal since being in office is to help the American worker and promote job growth.
“We need to modernize our higher-education system. We need 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. This plan won’t just cut the amount of student loan debt, but will lower tuition as well.
How to Cut Student Loan Borrowing
Over the last decade, student loan debt has reached a record $1.53 trillion. This new proposal is looking to reverse the trend. By capping the student loan amount a person can take out, it prevents them from getting too deep. Whether you agree with the president on other issues, this one could finally help lower student loan debt.
One of the reasons why student debt has climbed has to do with the colleges themselves. The schools only care about profit. If they’re getting subsidized by the government, why keep the cost down? The more involvement the government has in student loan debt, the more they’ve hiked the prices.
The more access colleges have had to the federal government in the form of unrestricted student loans, the more expensive college became. On the other hand, colleges continually say the opposite. According to them, they’ve increased costs because local state funding has been reduced. But that doesn’t make too much sense if they’re getting increasing amounts from the feds.
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.
Another Approach?
While the president maintains his position, Democrats and borrower advocates say the opposite. James Kvall works with the Institute for College Access & Success. It’s a non-profit that looks at student debt problems. He says there’s absolutely no evidence at all that higher federal loans lead to high costs overall.
“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. He is also a former policy adviser to President Barack Obama. Republicans, on the other hand, disagree.
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“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,” said Sen. Lamar Alexander, R-Tenn., who chairs the Senate education committee. He’s currently making the largest push for the education reform bill.
At the end of the day, it’s a good thing they’re at least talking about the problem. Years of inactivity have allowed the crisis to grow even stronger. Either way, capping the amount of debt is one possible solution for solving the problem. Time will only tell if it actually works.
