With student loan debt now approaching $1.5 trillion, the Trump administration is now proposing caps on student loans to help alleviate the problem.
One of the proposals would limit parent PLUS and student PLUS federal loans, according to Breitbart News.
Heritage Foundation research associate Mary Clare Amselem contends that her group has long argued that these programs are major drivers of student loan inflation.
"[U]nder the PLUS loan program, parents of undergraduate students – or graduate students themselves – can borrow up to the cost of attendance,” Amselem pointed out. “If you're going to law school, you can take out $250,000 from the federal, pay off interest on those loans for about 20 years and then have that entire principal forgiven and transferred on to taxpayers."
By reducing the size of government loans, Amselem says that private lenders would be able to, once again, offer student loans.
"If we do reduce the federal footprints in our higher education loans, we would enable the private market to re-emerge and offer competitive rates for students,” Amselem informed. “And right now, they're not quite able to do so."
Remarkably, student loan debt exceeds what Americans owe in credit card debt, auto loans or home equity loans, according to Breitbart.