Schools Want the Sky to Be the Limit on Loans

For the past nine years, graduate students in the U.S. have had almost a blank check to take out as much as $80,000 a year in government-backed loans to pay for tuition and living expenses. Republican Senator Lamar Alexander of Tennessee thinks that’s too much. He’s introduced legislation, backed by his Democratic colleagues Michael Bennet of Colorado and Cory Booker of New Jersey, to limit borrowing to $30,000 a year, with a cap of $150,000. Programs with especially high costs could appeal to the U.S. Department of Education to let their students borrow up to $15,000 more each year.

Colleges, whose lobbyists and trade associations have succeeded in defeating just about every attempt to control rising tuition costs over the last decade, are trying to soften Alexander’s proposed law, which would also radically simplify the federal student aid application. “I don’t think that bill will be enacted as is,” says Carolyn Henrich, a lobbyist working for the University of California system in Washington. Henrich, who formerly lobbied for the National Parent Teacher Association, says she’s met with Alexander’s staff to register the university’s opposition to the loan limits.