Student loans have also become one of the great policy failures of the age. Even before the pandemic, fewer than half of borrowers were paying down their debt. The federal student loan balance sheet has ballooned to $1.7 trillion, double what it was 15 years ago when Democrats used ObamaCare to nationalize the industry. Student debt would now exceed $2 trillion without the Biden loan forgiveness.
Enter House Republicans, who this week advanced a slate of reforms in the Education and Workforce Committee that they plan to attach to reconciliation. The goal is to hold colleges accountable for student outcomes and curb the open-ended loan buffet.
The House would reduce the aggregate limit for undergraduate loans to $50,000 from $57,500. The bill would also impose a $100,000 borrowing limit for master’s degree and doctoral programs and $150,000 for professional programs like law degrees. Graduate student loans are currently uncapped.
This will reduce the incentive for colleges to raise tuition and add graduate programs, which often cost six figures. The legislation also limits student borrowing to the “median cost of college” for programs nationwide, which will effectively compel high-priced institutions to lower tuition or provide more financial aid.
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