Trump administration wants Congress to put a limit on loans for grad students, parents of undergrads

The White House is unveiling a new set of higher education proposals.

March 18, 2019, 6:03 PM

A White House proposal, pushed by Ivanka Trump, would set legislative limits on a type of federal loan designed for graduate students and parents of undergraduate students.

The proposal, unveiled on Monday, would require cooperation with Congress, but Democrats who control the House haven’t said whether they would swing behind the change.

The loan limit proposed by the White House would be applied to PLUS loans, which according to the student aid website, are federal loans that are available to graduate or professional students and parents of dependent undergraduate students and can be used to help pay for college or career school.

"The principles, unveiled this afternoon at a meeting of the National Council for the American Worker, set forth concrete legislative actions that, if enacted into law, would provide more Americans access to affordable and quality education, improve institutional accountability, and help students and families make informed decisions regarding their educational options," the White House press secretary said in a statement on Monday.

PHOTO: An American flag flies over the south facade of the White House in Washington, D.C., April 22, 2018.
An American flag flies over the south facade of the White House in Washington, D.C., April 22, 2018.
Robert Alexander/Getty Images

The ranking member of the Senate committee on Health, Education, Labor and Pensions, Sen. Patty Murray, D-Wash., called the proposal a "feeble attempt" to help students, and said it "would end up hurting students by reducing the amount of federal aid for students and taking billions out of the pockets of borrowers."

"The White House’s proposal is a feeble attempt to claim the Trump Administration is helping students by identifying one symptom of rising student debt, while completely ignoring the root cause—that college costs are rising exponentially and most students can’t afford college without taking on massive amounts of debt. In fact, this proposal would end up hurting students by reducing the amount of federal aid for students and taking billions out of the pockets of borrowers. Chairman [Lamar] Alexander and I have agreed to work toward a comprehensive reauthorization that actually makes college more affordable, so I look forward to working with him to find real and serious solutions to that actually help students afford higher education," her full statement read.

The administration’s rollout comes amid broader scrutiny in higher education over inequities in the college admissions process.

Last week, the Justice Department revealed that several wealthy individuals had participated in a scam to ensure their children were admitted into schools, such as Yale University and the University of Southern California.

Ivanka Trump, the president's daughter who also serves as an adviser, posted on Twitter about the proposal, writing: "Today, @WhiteHouse will be sending Congress our policy priorities to modernize our higher edu system to ensure access to affordable, flexible, demand-driven education for Americans of all ages. We urge comprehensive Higher Edu reform!! It is long overdue!"

Bloomberg Government was first to report the administration’s plans, and a White House official confirmed the reporting to ABC News.

According to a memo released by the White House later, the administration wants "to increase access to affordable, flexible, and innovative postsecondary education and skills attainment to meet the interests and lifelong learning needs of every American."

Other priorities laid out by the Trump administration include proposals like expanding the Pell Grant to "include high-quality, short-term programs that provide students with a credential, certification, or license in a high-demand field," and urging Congress to reform the Federal Work Study program to include more opportunities for work in related fields to what the student is studying.

The Trump administration also proposes simplifying the student loan system and says Congress "should consolidate the five income-driven repayment options into one simple plan that caps monthly payment at 12.5 percent of a borrower’s discretionary income," and "should extend loan forgiveness to all undergraduate students (after 180 months of repayment through an income-driven repayment plan)."

The White House also included a proposal for Congress to provide financial aid to prisoners "eligible for release to improve employment outcomes and reduce recidivism," -- a proposal that comes not long after the White House and Congress worked on various prison reform initiatives.

Alexander, the Tennessee Republican, released a statement on Monday in support of the administration's proposal.

"I share the Administration’s goals to make a college education worth it and to make it simpler to apply for federal student aid and pay back student loans. It is helpful to have these suggestions as I work with Senator Patty Murray, the senior Democrat on the education committee, to develop bipartisan recommendations so that we can report legislation to the full Senate before summer," Alexander's statement said.

ABC News' Jordyn Phelps, Anne Flaherty and Trish Turner contributed to this report.

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