that the White House asked Congress to put new limits on how much students could borrow to pay for college. The goal of this initiative is to prevent borrowers from taking on unmanageable student loan debt.
As such, I'm a big proponent of limiting access to student loan debt by maintaining caps on what can be borrowed. If this is done across the board, it will force both students and colleges to consider the costs and the return on investment of education dollars spent. If you're a graduate student in a specialty field, annual costs can easily exceed $150,000. And even with a high salary, paying off these loans can be a struggle. When you're talking about a starting loan balance of $400,000, the interest alone is several thousand per month.
Like Grad PLUS Loans, private loans typically have no limits on borrowing, even for undergraduate students. So borrowers can borrow as much as they"need", including the cost of room and board and more. Where borrowers find themselves in financial hardship is when they borrower $150,000 to be a teacher making $38,000 per year. The math doesn't work in their favor.The idea of student loan borrowing limits is a good framework for both limiting future financial hardship and addressing the cost of education. However, it definitely has drawbacks.
How about limit the amount colleges charge for tuition. This plan would just limit middle to low income families from going to school.
This is a horrible idea because most students couldn't go to college if there is a cap on the loans. We are not made of money! studentloans
How about limiting how many crap degrees that universities give out knowing their students won't even qualify for working as a fast food cashier when they graduate with thousands of dollars of debt!
Colleges won’t like that ! They’ll have to lower prices !
Make it merit-based on GPA and effort put into the school. Also have colleges cosign the loans so it's on their asses as well if the student fails.
I'll do you one better: cap interest to the national average 30 year fixed mortgage rate. My home loan was 3.25% for a 30 year fixed. My student loans? A mixture of 6.8 and 7.9% loans
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