Bill passes House that will cap student loan borrowing

[JacquesVallee]

A bill passed the House 215-214 that will have set a lifetime borrowing cap of $200,000 for any single borrower across all federal loan types, with specific limits of $50,000 for undergraduates, $100,000 for graduate students, and $150,000 for professional students. If this passes the Senate, this will completely overhaul the entire higher education system.

I'd have to imagine a majority of the expensive private schools like USC, NYU, etc will shut down as it's very unlikely there are enough students wealthy enough to foot the tuition. Even many state schools may face issues as some are already in the 350-400k range for cost. I also suspect the expensive residency programs that charge 200k+ won't survive either.

I've seen on the pre med forums people freaking out because most private med schools are around 300k. I'd imagine private loans would could end up covering them, but when it comes to dental schools costing 500k+ I just don't see them surviving.

There are so many unknowns with what the consequences of this bill will be, so I am super empathetic to pre meds and pre dents who are concerned. However, the unlimited access to infinite student loans is the source of the problem we're currently facing. Something has to be done about it. If not, dental school costs will reach 1 million dollars at some schools within the decade.

The reconciliation bill cleared the House. Here’s how it would change higher ed.

Critics worry that the spending package, now headed to the Senate, would have a “historic and negative impact” on college access.

www.highereddive.com

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[TheeRockChewer]

Genuinely curious to see where this goes as a whole. I've said this in other areas but I'll repeat here- to be able to pull out massive loans of 500k+ for a career that'll pay ~150k as an entry level would never last, especially if schools just increase prices year after year.

I wonder if we'll see schools actually do things like:

• shut down/ pause schooling until a new admin undoes the bill.
• increase seats to compensate for loss of revenue
  • or decrease enrollment and make cut backs.
• reduce tuition
  • Im sure much of tuition goes to subsiding things like the clinic but how much just goes into the school's pockets? Not like anyone's watching.
• make cut backs/ let employees go
• request more state support
• reduced clinical experience
• become more composed of wealthy students
  • young adults who I'm going to assume aren't as mature as their lower class counterparts.

 

[JacquesVallee]

Genuinely curious to see where this goes as a whole. I've said this in other areas but I'll repeat here- to be able to pull out massive loans of 500k+ for a career that'll pay ~150k as an entry level would never last, especially if schools just increase prices year after year.

I wonder if we'll see schools actually do things like:

• shut down/ pause schooling until a new admin undoes the bill.
• increase seats to compensate for loss of revenue
  • or decrease enrollment and make cut backs.
• reduce tuition
  • Im sure much of tuition goes to subsiding things like the clinic but how much just goes into the school's pockets? Not like anyone's watching.
• make cut backs/ let employees go
• request more state support
• reduced clinical experience
• become more composed of wealthy students
  • young adults who I'm going to assume aren't as mature as their lower class counterparts.

First of all, it's 120k starting. Second, It's impossible to say exactly what will happen. Best case scenario is the private schools shut down and remaining schools lower their tuition. Regardless, the idea that the government would give a loan for any amount no questions asked is absolutely insane and needs a cap. I've seen so many pre meds freaking out, understandably so, but the unlimited supply of student loans is the source of the problem. In theory, the government could loan you one million dollars compounding at 9% no questions asked. That has to end.

 

[Blueshirts]

Genuinely curious to see where this goes as a whole. I've said this in other areas but I'll repeat here- to be able to pull out massive loans of 500k+ for a career that'll pay ~150k as an entry level would never last, especially if schools just increase prices year after year.

I wonder if we'll see schools actually do things like:

• shut down/ pause schooling until a new admin undoes the bill.
• increase seats to compensate for loss of revenue
  • or decrease enrollment and make cut backs.
• reduce tuition
  • Im sure much of tuition goes to subsiding things like the clinic but how much just goes into the school's pockets? Not like anyone's watching.
• make cut backs/ let employees go
• request more state support
• reduced clinical experience
• become more composed of wealthy students
  • young adults who I'm going to assume aren't as mature as their lower class counterparts.

They will do none of those things and instead will get cash infusions from DSO that will contract the students to a set period of time to work for them after completion of schooling, calling it now, see this post in 5 years.

 

[D1Bound]

They will do none of those things and instead will get cash infusions from DSO that will contract the students to a set period of time to work for them after completion of schooling, calling it now, see this post in 5 years.

Aspen or Heartland HPSP scholarships. Heartland already is in the education business so this would make sense to me.

 

[yappy]

Aspen or Heartland HPSP scholarships. Heartland already is in the education business so this would make sense to me.

It has always baffled me how DSOs, supply companies, etc. are allowed access to students or have any input into dental education at all.

 

[Big Time Hoosier]

A bill passed the House 215-214 that will have set a lifetime borrowing cap of $200,000 for any single borrower across all federal loan types, with specific limits of $50,000 for undergraduates, $100,000 for graduate students, and $150,000 for professional students. If this passes the Senate, this will completely overhaul the entire higher education system.

I'd have to imagine a majority of the expensive private schools like USC, NYU, etc will shut down as it's very unlikely there are enough students wealthy enough to foot the tuition. Even many state schools may face issues as some are already in the 350-400k range for cost. I also suspect the expensive residency programs that charge 200k+ won't survive either.

I've seen on the pre med forums people freaking out because most private med schools are around 300k. I'd imagine private loans would could end up covering them, but when it comes to dental schools costing 500k+ I just don't see them surviving.

There are so many unknowns with what the consequences of this bill will be, so I am super empathetic to pre meds and pre dents who are concerned. However, the unlimited access to infinite student loans is the source of the problem we're currently facing. Something has to be done about it. If not, dental school costs will reach 1 million dollars at some schools within the decade.

The reconciliation bill cleared the House. Here’s how it would change higher ed.

Critics worry that the spending package, now headed to the Senate, would have a “historic and negative impact” on college access.

www.highereddive.com

Big Hoss

 

[2TH MVR]

They will do none of those things and instead will get cash infusions from DSO that will contract the students to a set period of time to work for them after completion of schooling, calling it now, see this post in 5 years.

Not disagreeing with you, but this bill is a step in the right direction. DSO's are not immune to supply and demand in the marketplace. I see it now. Plenty of DSOs competing for the same patients. Point is. Sure. A DSO could contract and and invest with new grads. But the DSOs are a business. What's cheaper? Spending big bucks (schools with high tuition) contracting indentured servants with no dental experience for a long period of time or .......employ existing, desperate recent grad dentists and older dentists nearing retirement looking for jobs.

 

[Thehighwind87]

The private lenders- banks- can lend the money to cover the extra 200-500k

 

[Anonamoose]

The private lenders- banks- can lend the money to cover the extra 200-500k

Exactly, hundreds of threads on SDN full of people astonished that any student is willing to pay 500K+ to fill the seats of USC and NYU. The exact same will happen here - eager students will take out the max they can with federal and sign right up for the rest via a private bank. Nothing is going to change in the short term... nothing to penalize the schools for their prices and nothing to protect students

 

[Thehighwind87]

Exactly, hundreds of threads on SDN full of people astonished that any student is willing to pay 500K+ to fill the seats of USC and NYU. The exact same will happen here - eager students will take out the max they can with federal and sign right up for the rest via a private bank. Nothing is going to change in the short term... nothing to penalize the schools for their prices and nothing to protect students

Students don’t need protecting. They are adults. In fact they are 22-24 years old.

You can join the army, navy, take out 500k student loans, go work on a fishing boat, go work at McDonald’s- and so on.

Anyone taking out 500knof student loans does not need any protecting. There is enough education out there where a person can make an educated and rational decision.

Is it financially dumb to take out that much loans? IMO yes. But to the students going in are educated and know what they are getting.

Nothing will change. If anything banks will prob cover the cost but have a co-signed personal guarantee loan. Most likely your parents will sign on for the loans and put their house as collateral.

lol imagine dragging your parents into 500k of student loans and coming out as a dentist to do fillings for 100$ and make 150k. lol. And if you don’t pay it back- the bank takes your parents home.

Almost crazy to think- but here we are. Hah

 

[yappy]

Students don’t need protecting. They are adults. In fact they are 22-24 years old.

You can join the army, navy, take out 500k student loans, go work on a fishing boat, go work at McDonald’s- and so on.

Anyone taking out 500knof student loans does not need any protecting. There is enough education out there where a person can make an educated and rational decision.

Is it financially dumb to take out that much loans? IMO yes. But to the students going in are educated and know what they are getting.

Nothing will change. If anything banks will prob cover the cost but have a co-signed personal guarantee loan. Most likely your parents will sign on for the loans and put their house as collateral.

lol imagine dragging your parents into 500k of student loans and coming out as a dentist to do fillings for 100$ and make 150k. lol. And if you don’t pay it back- the bank takes your parents home.

Almost crazy to think- but here we are. Hah

Most schools are public institutions. I see no reason why we wouldn't expect them to maintain reasonable tuition costs, such as raising fees to match inflation or keeping tuition within the amount authorized by the federal government for lending. Adults should be protected. Why would I want my tax dollars supporting a public university that is fleecing students?

 

[D1Bound]

Exactly, hundreds of threads on SDN full of people astonished that any student is willing to pay 500K+ to fill the seats of USC and NYU. The exact same will happen here - eager students will take out the max they can with federal and sign right up for the rest via a private bank. Nothing is going to change in the short term... nothing to penalize the schools for their prices and nothing to protect students

Who’s to say a private bank is going to hand over 500k for dental school? Does that make sense for a bank to take that risk?

 

[Thehighwind87]

Most schools are public institutions. I see no reason why we wouldn't expect them to maintain reasonable tuition costs, such as raising fees to match inflation or keeping tuition within the amount authorized by the federal government for lending. Adults should be protected. Why would I want my tax dollars supporting a public university that is fleecing students?

Students have a choice of attending or not. They can easily say no I don’t want to attend it. Then schools will lower tuition.

The reason why tuition goes up because there are attendees and applicants. It’s simple supply and demand.

By putting price caps and so on- you are anti-capitalism. If anything it’s communism.

People have a choice of what they want to buy or attend. If everyone wants to buy Costco steak and they raise the price 3% every year to 1000$ and there are still buyers then Costco will keep raising prices. If buyers stop and go elsewhere then they will lower the price.

 

[Thehighwind87]

Who’s to say a private bank is going to hand over 500k for dental school? Does that make sense for a bank to take that risk?

That’s why there will be banks that say ok we will lend you but have your parents co sign with personal guarantee. Parents have 500k house equity- then why not? The banks will get their money if student fails by getting the house

 

[JacquesVallee]

Students don’t need protecting. They are adults. In fact they are 22-24 years old.

They need protecting. They're the next generation who are young and naive and pursuing education to set themselves up for the rest of their lives. They have zero clue what they're doing. There are thousands of dental students (I presume) leaving with 500k+ of dental school debt. That should be illegal. If that means I'm against freedom, then I'm against freedom.

By putting price caps and so on- you are anti-capitalism. If anything it’s communism.

Capitalism isn't a religion. People treat going against capitalism like you're offending God. It's silly.

That’s why there will be banks that say ok we will lend you but have your parents co sign with personal guarantee.

Yeah but most parents won't cosign. Mine wouldn't. Ironically, by getting banks involved instead of the government, you are reintroducing market forces.

But to the students going in are educated and know what they are getting.

This just isn't true.

 

[Thehighwind87]

They need protecting. They're the next generation who are young and naive and pursuing education to set themselves up for the rest of their lives. They have zero clue what they're doing. There are thousands of dental students (I presume) leaving with 500k+ of dental school debt. That should be illegal. If that means I'm against freedom, then I'm against freedom.

Capitalism isn't a religion. People treat going against capitalism like you're offending God. It's silly.

Yeah but most parents won't cosign. Mine wouldn't. Ironically, by getting banks involved instead of the government, you are reintroducing market forces.

This just isn't true.

Well, the bottom line is that financial information is so transparent today then it was 10-20 years ago. YouTube, sdn, Reddit, student loan planning- so on. If someone wants to do basket weaving for 500k and co sign it with their parents then that’s their choice. If someone wants to join the army at 18 years old. Then that’s their choice.
If someone wants to take out 500k of student loans then that’s their choice. If someone rants to take on 3 credit cards max it out and buy designer clothes then- same it’s their choice.

At the end of the day they are 18 and they can do things for themselves. The knowledge of finances is wide open.

Sorry but I totally disagrre
With your stance

 

[yappy]

Students have a choice of attending or not. They can easily say no I don’t want to attend it. Then schools will lower tuition.

The reason why tuition goes up because there are attendees and applicants. It’s simple supply and demand.

By putting price caps and so on- you are anti-capitalism. If anything it’s communism.

People have a choice of what they want to buy or attend. If everyone wants to buy Costco steak and they raise the price 3% every year to 1000$ and there are still buyers then Costco will keep raising prices. If buyers stop and go elsewhere then they will lower the price.

It's not simply a matter of supply and demand because most universities are nonprofit public institutions. Their mission is to serve society through teaching and research. The value they provide, and the justification for public tax support, depends on their ability to fulfill that mission. Financially crippling students is not in the public interest and is absurd for institutions backed by public funding.

By your logic, charging an exorbitant and arbitrary fee for vehicle testing at the DMV to drive on public roads would be acceptable. People would pay it right?

Costco is a publicly traded, for-profit company. It's clearly a different model. And for what it’s worth, Texas has had its own tuition freezes. Does that make Texas a communist state?

 

[Thehighwind87]

It's not simply a matter of supply and demand because most universities are nonprofit public institutions. Their mission is to serve society through teaching and research. The value they provide, and the justification for public tax support, depends on their ability to fulfill that mission. Financially crippling students is not in the public interest and is absurd for institutions backed by public funding.

By your logic, charging an exorbitant and arbitrary fee for vehicle testing at the DMV to drive on public roads would be acceptable. People would pay it right?

Costco is a publicly traded, for-profit company. It's clearly a different model. And for what it’s worth, Texas has had its own tuition freezes. Does that make Texas a communist state?

We can go back and forth on this.

For example- some people on this forum would say any amount of tuition is reasonable for a degree (dental) that allows them to make unlimited amounts of money. The field has barriers to entry, can be your own businessman, can make 500k, can provide for your family and build wealth.

Some people would say that 1 million $ of loans is worth it. Some people would say 300k is where they draw the line.

You say it’s unreasonable for loans to be so high but to others it is reasonable if not CHEAP as the return on income is basically guaranteed with the potential with a ton of $.

The bottom line is that consumers have the say. If you don’t think it’s worth it- don’t go. If you think it is- then go. That’s really it. Schools adjust their price based on supply and demand. If no one wants to go to dental school then the costs will come down.

It’s a free market. Let the free market choose.

And yes I get the whole argument of public institution and so on. But that’s beyond scope of discussion. That’s really a topic on how to govern. We can go into universal healthcare, social security and so on. Those kind of topics never have a solution.

But bottom line is who are you to say if costs are unreasonable. Who are you to say it’s “crippling debt” If students line up for 1 mil of loans then to them it’s worth it. It might not be for you- so you can find another profession. No one is forcing you into dentistry.

Dentistry made me a multimillionaire by mid 30s. It’s been a great job to me. Some people might look at that and say yup the student loan debt is worth it.

 

[yappy]

We can go back and forth on this.

For example- some people on this forum would say any amount of tuition is reasonable for a degree (dental) that allows them to make unlimited amounts of money. The field has barriers to entry, can be your own businessman, can make 500k, can provide for your family and build wealth.

Some people would say that 1 million $ of loans is worth it. Some people would say 300k is where they draw the line.

You say it’s unreasonable for loans to be so high but to others it is reasonable if not CHEAP as the return on income is basically guaranteed with the potential with a ton of $.

The bottom line is that consumers have the say. If you don’t think it’s worth it- don’t go. If you think it is- then go. That’s really it. Schools adjust their price based on supply and demand. If no one wants to go to dental school then the costs will come down.

It’s a free market. Let the free market choose.

And yes I get the whole argument of public institution and so on. But that’s beyond scope of discussion. That’s really a topic on how to govern. We can go into universal healthcare, social security and so on. Those kind of topics never have a solution.

But bottom line is who are you to say if costs are unreasonable. Who are you to say it’s “crippling debt” If students line up for 1 mil of loans then to them it’s worth it. It might not be for you- so you can find another profession. No one is forcing you into dentistry.

Dentistry made me a multimillionaire by mid 30s. It’s been a great job to me. Some people might look at that and say yup the student loan debt is worth it.

It’s not a free market.

Why not have the DMV charge people 50k per year to drive? The government can issue people loans if they cannot afford it.

 

[Thehighwind87]

It’s not the free market.

Why not have the DMV charge people 50k per year to drive? The government can issue people loans if they cannot afford it.

Let’s think reasonably here - if it’s 50k- no one can drive and people would either vote or protest. Cars are almost considered essential to making a living.

Dental school is not essential. You don’t have to be a dentist. If costs become unreasonable you can vote with your wallet and not attend.

Your example is to extreme.

At the end of the day the free market and politicians have said the dmv costs 50$ and dental education costs 500k.

 

[JacquesVallee]

It’s a free market. Let the free market choose.

The current total student loan debt total is 1.7 trillion dollars, with interest rates now at 9%. This is greater than the GDP of most countries. If this is the free market at work, then screw the free market.

 

[Thehighwind87]

Poop e C

The current total student loan debt total is 1.7 trillion dollars, with interest rates now at 9%. This is greater than the GDP of most countries. If this is the free market at work, then screw the free market.

It’s not a free market.

Why not have the DMV charge people 50k per year to drive? The government can issue people loans if they cannot afford it.

By the way- I do think the student loan debt is ridicolous- and I would only do dentistry around 200-300k. Anything more is dumb.

But I am against capping loans and saying we need to control student loans.

Just imagine if govt tells me that I can cap my crowns at x amount. That’s not fair to me. That’s not the free market.

 

[yappy]

Let’s think reasonably here - if it’s 50k- no one can drive and people would either vote or protest. Cars are almost considered essential to making a living.

Dental school is not essential. You don’t have to be a dentist. If costs become unreasonable you can vote with your wallet and not attend.

Your example is to extreme.

At the end of the day the free market and politicians have said the dmv costs 50$ and dental education costs 500k.

You’re correct that the DMV example is unreasonable. It’s your own logic applied to another public institution. Using your own logic I could argue the market would find a way and that personal motorized vehicle use is not a right and is not essential. IMO it’s flawed because it’s attributing free market principles to public institutions.

The inflation adjusted debt of dental graduates in 1980 was ~50k - 10x less than your 500k example today.

I am a debt free dentist. I don’t necessarily have a dog in the fight other than I want to see young dentists, and other professionals, graduate with as little debt as possible - I want to see regular hard working, ethical, smart people enter this profession.

 

[Thehighwind87]

You’re correct that the DMV example is unreasonable. It’s your own logic applied to another public institution. Using your own logic I could argue the market would find a way and that personal motorized vehicle use is not a right and is not essential. IMO it’s flawed because it’s attributing free market principles to public institutions.

The inflation adjusted debt of dental graduates in 1980 was ~50k - 10x less than your 500k example today.

I am a debt free dentist. I don’t necessarily have a dog in the fight other than I want to see young dentists, and other professionals, graduate with as little debt as possible - I want to see regular hard working, ethical, smart people enter this profession.

I think a marriage of both public/private is the best way to address student loans.

The govt shouldn’t do unlimited loans- that’s how we ended up with such large tuition numbers. If the govt only does 150k and the private sector covers the rest. If private thinks 500k isn’t a good deal- they will ask for co-signers. If they don’t think that’s good… then schools don’t get their $ and tuition lowers.

 

[JacquesVallee]

The govt shouldn’t do unlimited loans- that’s how we ended up with such large tuition numbers.

We have common ground here

 

[Anonamoose]

Who’s to say a private bank is going to hand over 500k for dental school? Does that make sense for a bank to take that risk?

they already are

 

[Thehighwind87]

they already are

Lending to dentists is pretty much risk free. The margins are good and teeth are always in need of fixing.

The only problem is that dentists that are 500k-1mil in debt will never be financially free and basically be owned by the banks for 30 years paying it off.

Personally I would rather be debt free and broke then be owned by a bank.

 

[2TH MVR]

I'm a conservative that believes in patriotism, capitalism and free will. But not to the point where taxpayers are eventually "forced" (sounds like communism to use another poster's words) to bail out "adult student borrowers".

Yes it is a free market. Supply and demand. I don't care what the business is of loaning excessive money for a profession that has a ridiculous debt to income ratio .... as long as taxpayers aren't forced to bail them out.

The bill is a much needed step in the right direction. If a student needs to borrow additional funds (privately) ..... collateral assets (co-signers) will be needed and that family can decide how much they want to leverage their "future retirement". What a burden for that family.

You can't stop free capitalism i.e Georgia's School of Orthodontics, USC, NYU, Midwestern, etc. but you can get the govt out of loaning unlimited, ridiculous loans.

 

[Thehighwind87]

I'm a conservative that believes in patriotism, capitalism and free will. But not to the point where taxpayers are eventually "forced" (sounds like communism to use another poster's words) to bail out "adult student borrowers".

Yes it is a free market. Supply and demand. I don't care what the business is of loaning excessive money for a profession that has a ridiculous debt to income ratio .... as long as taxpayers aren't forced to bail them out.

The bill is a much needed step in the right direction. If a student needs to borrow additional funds (privately) ..... collateral assets (co-signers) will be needed and that family can decide how much they want to leverage their "future retirement". What a burden for that family.

You can't stop free capitalism i.e Georgia's School of Orthodontics, USC, NYU, Midwestern, etc. but you can get the govt out of loaning unlimited, ridiculous loans.

You nailed it.

The private banks will lend freely or based on collateral signing parents. If you don’t think it’s worth it- then don’t go. And if dental schools can’t fill those seats. Prices will come down.

And if those seats get filled well then the market has said 500k is worth it for a dental degree

 

[dratc]

I'm a conservative that believes in patriotism, capitalism and free will. But not to the point where taxpayers are eventually "forced" (sounds like communism to use another poster's words) to bail out "adult student borrowers".

Yes it is a free market. Supply and demand. I don't care what the business is of loaning excessive money for a profession that has a ridiculous debt to income ratio .... as long as taxpayers aren't forced to bail them out.

The bill is a much needed step in the right direction. If a student needs to borrow additional funds (privately) ..... collateral assets (co-signers) will be needed and that family can decide how much they want to leverage their "future retirement". What a burden for that family.

You can't stop free capitalism i.e Georgia's School of Orthodontics, USC, NYU, Midwestern, etc. but you can get the govt out of loaning unlimited, ridiculous loans.

I think about this topic a decent amount, especially recently with all the changes. I’ve arrived at basically the same conclusion. As a believer in capitalism as well, I think your viewpoint respects a free market, gets the burden of unpaid loans off of tax payers, and has a decent shot at curving tuition prices. The current blank check from the government is not in line with free market principles, but its own form of crony capitalism.

 

[JacquesVallee]

I don't care what the business is of loaning excessive money for a profession that has a ridiculous debt to income ratio .... as long as taxpayers aren't forced to bail them out.

I actually do care—because the free market isn’t always equipped to handle matters that can destroy lives. Letting naive 20-year-olds, often with no financial education and no prior experience paying taxes, sign off on six-figure student loans is reckless. These are decisions that can cripple them for decades, with no realistic way out. That’s why we regulate other essential sectors, like healthcare. We don’t let the market deny people health coverage for pre-existing conditions, because healthcare is too important to be left unregulated. Education financing, especially at this scale, should be treated with the same seriousness.

The bill is a much needed step in the right direction. If a student needs to borrow additional funds (privately) ..... collateral assets (co-signers) will be needed and that family can decide how much they want to leverage their "future retirement". What a burden for that family.

Agreed.

You can't stop free capitalism i.e Georgia's School of Orthodontics, USC, NYU, Midwestern, etc.

Capitalism is a powerful engine for innovation—but it’s not sacred or infallible. We regulate capitalism all the time when the stakes are too high to leave to profit motives alone. That’s why we have building codes, environmental protections, and can’t sell toxic food. The same should go for education.

Also, I’ve noticed some people here throw around the word “communism” every time government regulation is mentioned. It’s absurd. No one is asking for the government to seize the means of production or abolish private property. We're talking about basic guardrails in systems that impact millions of lives. Markets don’t function well without rules. That’s not communism—it’s just how modern economies avoid collapse and exploitation. My family suffered under communism in Eastern Europe for decades. They'd laugh at us calling basic regulations "communism".