"While much attention is being paid to high student debt, a growing chorus is making the surprising argument that students need to be allowed to borrow more. With grants limited and college costs rising, loans can be a lifeline for students who have no other way to afford a degree," according to The Hechinger Report.
"... What’s clear is that the financial aid now being given to students isn’t enough to cover the growing cost of college. ... Student loans could cover that gap. And unlike the private loans to which many students are forced to resort when they hit the federal limit, direct federal loans for undergraduates come with safety valves, including the ability to cap repayment based on how much borrowers earn after college.
... The National Association of Student Financial Aid Administrators (NASFAA) supports lifting the federal student loan cap. It’s a proposal the organization hopes Congress takes up as lawmakers work to reauthorize the Higher Education Act, the main collection of laws covering national higher education policy. Whether the White House backs such a move is an open question. The Trump administration released a wish list in March that included a cap on certain kinds of federal loans.
Middle-class students who aren’t eligible for federal aid such as the Pell Grant could benefit the most from seeing the cap on borrowing lifted, said Karen McCarthy, director of policy analysis for the association. She called them 'some of the most vulnerable, because they do not have any of that grant assistance to help backfill their need as well.'
As part of its proposal, NASFAA wants to see the cap on undergraduate student borrowing raised, but would rely on colleges to lend less to certain students, such as those who are part-time or pursuing academic programs with limited market value. 'The details would need to be worked out on what has to happen here,' said McCarthy."
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: 4/12/2019