Sorry, no.
You are limiting commerce, which is essentially the liberal line. If there is a lender who wishes to lend a consumer money and a consumer who wishes to borrow it, why should Big Brother government stand in the way?
Your solution does nothing to address the underlying problem. Much like many healthcare proposals which are focused on how to PAY for health care, you are ignoring the aspect of “why does it cost so much?”
The truth is that society has placed a premium on getting a college degree. Ironically, many degrees just wind up being useless to the career people find themselves in.
We’ve also got the mistaken notion that “everyone deserves a college degree.” False. Many people aren’t even smart enough for college. We’ve marginalized trade skills, though, and so most see college as the only way.
There is no easy solution to this problem except THIS:
DO NOTHING.
Yep.
Why?
Let an entire generation of Americans suffer with the mistake they made, chasing a degree at great expense, and then discovering that it was generally useless. What will happen is that these people will tell their children, “Oh, no - don’t make the same mistake I made! Do not take out $300k in student loans so you can get a Music Theory degree. That’s just dumb. If you want to be a chemist or a doctor - fine. Those are technical skills which require higher education.”
Eventually, enough parents will dissuade their kids from chasing useless degrees and these schools which have spent BILLIONS on construction projects to expand their campuses will start to see empty classrooms. The law of supply and demand will kick in and costs will come down again.
UH - I should also point out that FEDERAL student loans shouldn’t even be a thing, and is one reason why this is a problem in the first place.
My proposal.
Abolish the Dept of Education and all programs related to student loans.
No. More. Spending.
“you are ignoring the aspect of ‘why does it cost so much?’”
Miss Middle Class overpays so Miss Other Side of the Tracks pays much less, or nothing at all.
Just make the debt dischargeable in bankruptcy, maybe with the additional caveat that universities have to approve all borrowers because the will banks have recourse to recover some percentage of their loss from university endowments.
Whole "Anti-American Studies" departments will blow away in the wind, as universities realize they will be on the hook for the future failures they are creating.
“You are limiting commerce”
I’m proposing limiting federal loan amounts.
I’m also proposing college co-signing, when a federal loan is involved or the lender wishes to bar federal bankruptcy on the loan:
“6. Require colleges, and their holding companies, to co-sign associated new student loans, if federal or if federal bankruptcy student loan exemption is to be applied.”
Private loan amounts are obviously possible under my proposal(including ones where only the student signs the loan):
“8. Allow new private student loans signed or co-signed by a person at the time of issue related to the student by blood, adoption or guardianship to be subject to federal bankruptcy discharge ten years or more after issue, excluding deferment periods, less:
a. one month per 1/10th interest rate percentage above four,
b. one month per 1/100th of the net loaned amount in debt add-ons, such as points, fees and charges.”
Number 8 is to protect parents.
Federal bankruptcy law is authorized by our federal Constitution.
By the way, I took out a private loan ($1,500) as well when I went to college.