White House proposes limits on student loan borrowing as part of higher education reforms

The Trump administration on Monday proposed placing limits on federal student borrowing programs as part of a series of initiatives to amend the Higher Education Act.

“We need to modernize our higher education system to make it affordable, flexible and more outcome oriented so that all Americans, young and old, can learn the skills they need to secure and retain good-paying jobs,” White House senior adviser Ivanka Trump said during a call with reporters.

A number of the proposals seek to change the borrowing and loan repayment process. A senior administration official said the White House wants to institute a limit on loans through the PLUS program, which graduate students and parents of undergraduates use to help pay for college or trade school.

{mosads}The official did not say what the loan cap would be, but that it could vary by program rather than by institution.

The administration is also calling for Congress to simplify loan repayment programs, in part by condensing five income-driven repayment plans into one plan that would cap monthly payments at 12.5 percent of the borrower’s discretionary income.

The proposals are the first major priorities from President Trump’s White House touching on the Higher Education Act, which was last significantly amended in 2008. The recommendations come from the National Council for the American Worker, an advisory board created via executive order in July.

The Department of Education under President Trump has garnered criticism from some corners for its rollback of Obama-era regulations aimed at protecting borrowers from predatory loan practices.

But the White House asserted on Monday that the proposed changes to the Higher Education Act would ultimately benefit students seeking to enter the workforce.

“We think these are absolutely critical reforms and really the most comprehensive approach to higher ed reform in over a decade,” Ivanka Trump told reporters. “So we’re very excited to work with members on both sides of the aisle to advance these and other important education initiatives.”

Other proposals outlined in the administration’s plan focus on improving access to information about various institutions, allowing low-income students and workers to use Pell grants for certain short-term workforce programs and reforming the federal work study program so that it better aligns with students’ career goals.

“Members of Congress who are committed to ensuring Americans thrive in today’s strong, modern, and growing economy should support and pass these reforms,” press secretary Sarah Huckabee Sanders said in a statement.

Congress must take up the White House proposals and pass legislation before they become law.

Ivanka Trump said Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health, Education, Labor and Pensions Committee, has expressed support for the White House’s stated priorities. Alexander has said he will not seek reelection in 2020, providing an additional sense of urgency in getting the proposed reforms through Congress.

Alexander said in a statement that the White House proposals are “helpful” for him as he works with committee ranking member Sen. Patty Murray (D-Wash.), and that he hopes to bring legislation to the full Senate before the summer.

Updated at 1:52 p.m.