How Federal Student Loans Increase Tuition and Decrease Aid

Conventional wisdom says that expansions in federal student aid will result in a more affordable and equitable post-secondary education system. While this belief has motivated massive expansions of federal aid in the recent past, rapidly increasing tuition and student loan default rates are raising questions about this approach. In a new study, I review the … Continue reading How Federal Student Loans Increase Tuition and Decrease Aid

Default on Student Loans? Bad Idea

Writing in The New York Times, Lee Siegel encourages students to follow his example and default on their student loans. The four biggest problems with his piece are: Siegel is the wrong case study Even if you are of the opinion that college should be free and student debt is immoral, Siegel is the wrong … Continue reading Default on Student Loans? Bad Idea

Overstating Unhappiness with Student Loans

The Consumer Financial Protection Bureau’s Student Loan Ombudsman has just released his annual report on private student loans. The data in the report suggests that an epidemic of non-repayment is happening in the private student loan sector. Some 5300 borrowers lodged complaints with the CFPB from October 2013-September 2014, an increase of 38% from the … Continue reading Overstating Unhappiness with Student Loans

Making a Bigger Mess of Student Loans

The John William Pope Center for Higher Education Policy Federal student aid programs abound in examples that demonstrate a point economists often make: government policies almost always have undesirable consequences that weren’t anticipated, or if they were didn’t matter much to the politicians. At the time they were begun, during President Johnson’s “Great Society” years … Continue reading Making a Bigger Mess of Student Loans

Defending Income-Contingent Student Loans

Last week George Leef argued that my recent case for income contingent lending (ICL), a type of student loan where the monthly payment is a function of the student’s income, was off base. One of his main points was that if ICL is such a good idea, “Why do we not find “income-contingent” lending in … Continue reading Defending Income-Contingent Student Loans

Let’s Tie Our Hands on Student Loans

Odysseus, in Homer’s Odyssey, orders himself tied to the mast of his ship so he can hear the beautiful song of the Sirens without risking the usual gruesome fate of those who sail too close to the singers. This lesson – if you know you are going to make a bad decision you should tie … Continue reading Let’s Tie Our Hands on Student Loans

Let’s Listen to Those Scary Tales about Student Loans

Writer Christopher Shea argued in the Washington Post that the problems associated with student loans – and by extension, the cost of college – are overstated. Contrary to many of the sob stories in the media, says Shea, “…it’s almost always well worth what it does cost — assuming that you graduate and, if your  loansContinue reading Let’s Listen to Those Scary Tales about Student Loans

Stop Dumping on Student Loans

Some critics have called for a near-total rollback of the government’s involvement with higher education, including the end of subsidies to low-income students.  Last month, for instance, Jarrett Skorup of Michigan Capitol Confidential.com suggested that state and federal governments should  quit subsidizing higher education altogether because the aid fails to improve individual economic prospects or … Continue reading Stop Dumping on Student Loans

Student Loans to Cost at Least $35 Billion More Than Expected

Buried in a new Congressional Budget Office report is the revelation that the CBO now thinks federal student loans will add $35 billion more to the deficit in the next ten years than it previously thought. “The Budget and Economic Outlook: Fiscal Years 2013 to 2023,” released this week, details the changes in the CBO’s … Continue reading Student Loans to Cost at Least $35 Billion More Than Expected

A Proposal to Let Bankruptcy Discharge Private Student Loans

A Wall Street Journal editorial today took a very negative view–rightly, in my opinion–of President Obama’s proposal to let student borrowers discharge private student loans through bankruptcy. By law, repayment of federally guaranteed loans cannot be avoided this way. But the Journal wrote: “If there’s not a great outcry over letting borrowers stiff private lenders, eventually … Continue reading A Proposal to Let Bankruptcy Discharge Private Student Loans

National Review Fumbles on Student Loans

Over at NRO yesterday Jay Hallen proposed a few solutions to easing the student-loan bubble. Though his impulses are correct his recommendations fall flat. Hallen first proposes that the Department of Education move to a “risk-based pricing” system in which it would consider a student’s high-school GPA or intended major in determining the loan price. … Continue reading National Review Fumbles on Student Loans

Cheaper Student Loans–A Bad Idea Whose Time Has Come

When Victor Hugo claimed that all the world’s armies are powerless against an idea whose time has come, he probably had in mind good ideas. But the time can come for a bad idea also. Low-cost student loans, embraced by President Obama, Governor Romney, and Congressional leaders of both parties, is a bad idea. StudentsContinue reading Cheaper Student Loans–A Bad Idea Whose Time Has Come

Those Accountability Rules for Student Loans

This past Monday, the Department of Education proposed “gainful employment” rules that will regulate postsecondary vocational programs, primarily those offered by for-profit colleges, on the basis of their graduates’ ability to pay back their federal student loans. Proponents of higher education reform should welcome this move, but not because it targets unscrupulous actors in the … Continue reading Those Accountability Rules for Student Loans

Another Pitfall for Student Loans

In a recent article for Career College Central, I discuss the negative implications of the Department of Education’s (ED) proposal to alter the gainful employment rule to restrict the amount of money that a student could borrow by program of study and expected entry level occupational earnings. I identified three major flaws with the proposal. … Continue reading Another Pitfall for Student Loans

Alas, the Feds Take Over Student Loans

As an observer of the national political scene for over a half of a century, and as a former employee of the U.S. Senate, I have seen a lot of political sleaze and chicanery. But nothing tops what happened as the Congress, using a relatively arcane procedure designed to correct spending excesses in budget bills, … Continue reading Alas, the Feds Take Over Student Loans

Those Disastrous Student Loans

Alan Michael Collinge is back in his gadfly role agitating against the student loan industry. Collinge is the author of last year’s The Student Loan Scam: The Most Oppressive Debt in U.S. History—and How We Can Fight Back (Beacon Press) and founder of the website studentloanjustice.org, dedicated to, among other things restoring the bankruptcy protection … Continue reading Those Disastrous Student Loans

Waste And Folly In Student Loans

Shortly after his inauguration in January President Obama announced a proposal to get rid of a 44-year-old program known as the Federal Family Education Loan (FFEL) program. In the FFEL system, the federal government guarantees loans to students from private banks and similar institutions under a variety of programs (the best known is the so-called … Continue reading Waste And Folly In Student Loans

What Does ‘Sustainability’ Have to Do With Student Loans?

The student loan crisis – or near crisis; narrowly-averted crisis ; or postponed crisis – no one is sure – comes co-incidentally at a moment when many colleges and universities are once again repackaging their basic programs. The new buzzword, as John Leo has pointed out is “sustainability.” I also recently tried my hand at … Continue reading What Does ‘Sustainability’ Have to Do With Student Loans?

Student Loans – Sequel To The Mortgage Mess?

A few weeks ago, I alerted readers to the threat of a tightening of the student loan market . Banks have been bundling student loans, like home mortgages, and selling them as securities. First Marblehead Corporation in Boston has been the nation’s biggest player in “securitizing” student loans, and just like home mortgage-backed securities, the … Continue reading Student Loans – Sequel To The Mortgage Mess?

First Mortgages, Now Student Loans?

Last week, First Marblehead Corporation, a Boston-based company, saw its stock plummet after cutting its dividend. The problem? First Marblehead is in the business of “securitizing” student loans. A year ago, this would have required some explanation, but the sub-prime mortgage mess has taught Americans – and people all over the world – the meaning … Continue reading First Mortgages, Now Student Loans?

Student Loans: All Better Now

Peter Wood has been active at the NAS site, issuing additional comment on the latest permutation of the ongoing student loan scandal (if you haven’t, do catch his initial summing-up of the case Those Scandlous Student Loans). This week, George Miller, Chair of the House Education and Labor Committee, introduced a bill to reduce federal … Continue reading Student Loans: All Better Now

Those Scandalous Student Loans

In mid-January, a brief item appeared on an inside page of The New York Times, headlined “Student Lender Investigated.” The five sentence article noted that the New York Attorney General’s office was looking into “student loan marketing” by Sallie Mae, “the nation’s largest lender to students.” Attorney General Cuomo had requested information about “preferred lender … Continue reading Those Scandalous Student Loans

College Students Lose It over the Election

University heads are very concerned with their students’ feelings and fears about the presidential election.  A Chronicle of Higher Education article collected 45 university president statements on the election. The statements reveal how many presidents advocated acceptance of the election results and/or congratulations of the winner—approximately zero–as opposed to offering comfort and therapy of sorts … Continue reading College Students Lose It over the Election

College Students Get Special De-stress Therapy After Trump Election

On our campuses, the election of Donald Trump is being treated as an emotional and personal disaster. It’s all about feelings. Classes have been canceled, therapeutic intervention offered and safe spaces filled. Here are three administrations in action, as reported on the Power Line blog: There Will Be a Self-Care Session with Cookies and Mindfulness … Continue reading College Students Get Special De-stress Therapy After Trump Election