"The White House on Monday endorsed adding new lending caps for graduate and parent borrowers and giving campus aid administrators the authority to require loan counseling for student borrowers, among a slate of priorities for reauthorizing the Higher Education Act," Inside Higher Ed reports.

"The wish list is the most comprehensive accounting so far of the Trump administration’s higher ed agenda. And it suggests the Trump administration sees limiting student borrowing as a top issue.

The White House took a mostly hands-off approach in the last Congress as House Republicans pursued a controversial HEA rewrite that ultimately failed to get a floor vote. But with serious talks happening between Senate lawmakers and House Democrats signaling support for bipartisan legislation, the White House is weighing in on with key demands for the first update to the higher ed law since 2008.

... The White House proposals also called for limiting loan debt directly by adding new caps on the Parent and Grad PLUS programs, which currently allow borrowers to take out unlimited amounts of debt. It argued that lending limits are necessary because research shows a correlation between tuition increases and the availability of student aid. But that idea, known as the Bennett hypothesis, has in fact been hotly contested by higher ed researchers. And the only examination of the Grad PLUS program’s impact on pricing, by Robert Kelchen, an assistant professor at Seton Hall University, showed modest effects.

The proposed lending caps reflect a similar proposal in the PROSPER Act, a 2017 House Republican plan to overhaul the HEA. PROSPER called for annual limits of $28,500 for graduate students and $12,500 for parent borrowers. The Trump administration document offered no specific numbers.

... The White House is also backing a long-standing demand from campus aid administrators for authority to limit lending and require loan counseling. Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said if policy makers want colleges to play a more active role in addressing student loan debt, those campus officials need more tools to curb borrowing.

'Many schools would welcome the opportunity to more directly intervene and require counseling when students borrow irresponsibly,' Draeger said."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

Publication Date: 3/19/2019