Future college students could see a limit on how much they can borrow to pay for school.
On Monday, the Trump administration urged Congress to put a cap on federal student loans.
“Just cause you’re a college student life doesn’t stop there. So paying all my bills like my car bill, phone bills etc. So I’ve definitely had to take out some loans,” Gladis Villalpando a Fresno State Student said.
Villalpando said it scary to think what happens after college, when her debt is a guarantee and a job is not.
White House officials said student debt now tops what Americans owe on credit cards, auto and home equity loans.
“These students graduate with a tremendous amount of debt which affects them for decades after they graduate from college,” Brian Ullmann a certified financial planner at Ford Financial Group said.
Ullmann, said for many, the price tag of a degree is worth it — noting higher wager and lower unemployment among college graduates. “People will pay a lot of money for that, and it’s easier to pay for that when you have a limitless supply of funding for student loans,” he said.
Currently undergraduate borrowing from the Federal government is capped at $57,500, but parents and graduate student face no such limits.
Some research suggests unlimited borrowing encourages school to increase tuition — something this proposal would counter.
“If it comes to pass I think it could have the desired affect of limiting the growth of tuition for students,” Ullmann said.
Villalpando said limiting borrowing could be a good idea. “I think it is if they bring more resources to help students, maybe more scholarships.’
On the flip side, Ullmann said it could exclude qualified students from attending college. “It might also eliminate some people from being able to go to some schools that they could get into but simply can’t afford because there’s a cap on lending for their parents,” he said.
White House officials did not announce details on what the proposed loan caps would be.