Andrew Gillen of the Center for College Affordability and Productivity wrote this note to Charlotte Allen to clarify comments of his in Allen’s article today on student loans:
Charlotte, I saw your article on student loans is up at Minding The Campus. I liked it, but at the very end, you have a long quote from me that is problematic.
The quotation says: “I think that having a federally run program makes some sense, as long as the government is limited to determining eligibility and setting interest rates. Get rid of lender subsidies, let interest rates vary, and let the government subsidize students directly if it wants to. The problem with the private loans was that they happened because federal loan limits got mazed out. So drop the cumulative loan limit and let people borrow what you can pay back. Drop the non-dischargeability, but let lenders pursue borrowers to a limit of, say, $200,000 or $300,000.”
This is sort of a merging my views on both gov and private loans, but it’s not clear from the quote which program I was talking about when. You probably wrote it down correctly, since I tend to be all over the place when talking, but as it is, it could be misinterpreted very easily. Probably the easiest thing to do would be to replace it with this “I think that having a federally run program makes some sense, as long as the government is limited to determining need based eligibility and setting the loan limits. Get rid of lender subsidies, let interest rates vary, and let the government subsidize students interest payments directly if it wants to. For private loans, drop the non-dischargeability and let the market determine the terms of lending.”