Republican bill would cap student borrowing, make colleges liable for unpaid loans
Laura Spitalniak
January 12, 2024
Rep. Virginia Foxx said her proposal would cut down on the “astronomical” levels of student debt in the country.
Dive Brief:
Rep. Virginia Foxx, chair of the House Committee on Education and the Workforce, introduced a wide-ranging legislative package Thursday meant to reshape the student loan system and reduce college costs.
Known as the College Cost Reduction Act, the proposal would put colleges on the hook for loans their former students don’t pay off, place caps on how much students could borrow for their education, and pare down federal student loan repayment options.
The act would also limit the U.S. Department of Education’s power to implement new student loan forgiveness programs and roll back several of the agency’s recent regulatory changes, including the gainful employment and 90/10 rules. Foxx, a Republican from North Carolina, has strongly opposed the Biden Administration’s attempts to forgive mass amounts of student debt.
Dive Insight:
While there’s still compelling evidence that a college degree improves individuals’ financial outcomes, ballooning tuition costs and student loan debt have left many families skeptical of higher education’s worth.
About one-fifth of adults who attended college said the costs outweighed the lifetime financial benefits they received, according to a recent annual survey from the Federal Reserve.
