Should students be able to borrow more? Some experts say yes.

Despite widespread concern about college students’ debt burden, a growing number of experts are calling on policymakers to increase the amount of federal loans students may borrow. Current regulations prohibit undergraduate students from borrowing more than $7,500 per year and no more than $31,000 total—a cap that has held steady for more than a decade, even though college costs have increased significantly. For students who are no longer dependent on their parents, the cap is higher at $12,500 per year and $57,500 total.

It’s clear, The Hechinger Report writes, that “financial aid now being given to students isn’t enough to cover the growing cost of college.” Students attempting to bridge the gap may take on private loans, which often lack the protections afforded by federal loans, or increase their work hours, potentially compromising their academic performance. Their parents, meanwhile, may turn to Parent PLUS loans, which give parents the ability to help finance their child’s college education but have higher interest rates and may further compound intergenerational debt for low-income families.

Calls to lift federal loan caps

Experts say that avoiding loans entirely—for instance, by increasing grant aid—would be optimal but acknowledge that lawmakers are unlikely to sufficiently increase the maximum Pell Grant.

Without such changes on the horizon, organizations such as the National Association of Student Financial Aid Administrators (NASFAA) are urging Congress to raise the federal student loan cap as part of the Higher Education Act reauthorization. Karen McCarthy, NASFAA’s director of policy analysis, told The Hechinger Report that lifting the cap would especially help middle-class students, who may struggle to cover the cost of college but likely do not qualify for grant assistance. However, NASFAA cautioned that colleges would need to play a role in preventing students from overborrowing. “The details would need to be worked out on what has to happen here,” McCarthy said.

Other proposals meanwhile suggest doubling the amount of federal loans that undergraduates can borrow or raising the borrowing limit for students whose low family incomes qualify them for the full Pell Grant amount.


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