"The financial services company Ascent recently raised $45 million to expand its student lending platform, pointing to the loan caps as a major opportunity. The University of Pennsylvania has announced partnerships with private lenders, Yale's School of Public Health is developing its own loan option and law schools from the University of Kansas to Washington University in St. Louis are already launching institution-backed financing programs."
"Beginning July 1, parents will face a $65,000 lifetime borrowing cap per child, and graduate students will face a $100,000 lifetime cap, with higher limits for certain federally designated professional programs. The Department of Education estimates the new caps will cut graduate lending by 39 percent and parent borrowing by 32 percent over the next decade."
"Proponents have rightly pointed out that federal lending has played a role in distorting the cost of higher education. Too often, the cost is out of proportion with expected earnings."
New federal borrowing caps limit parents to $65,000 lifetime borrowing per child and graduate students to $100,000 lifetime, expected to reduce graduate lending by 39 percent and parent borrowing by 32 percent. However, universities and private lenders are rapidly establishing alternative financing pipelines to maintain tuition revenue. Companies like Ascent are expanding lending platforms, while institutions including University of Pennsylvania, Yale, and multiple law schools are launching private loan programs. These workarounds undermine the policy's intended purpose of controlling higher education costs by pushing students and families toward riskier private debt alternatives.
#student-debt #federal-lending-caps #private-student-loans #higher-education-costs #university-financing
Read at Inside Higher Ed | Higher Education News, Events and Jobs
Unable to calculate read time
Collection
[
|
...
]