Most of the problems with student loans are due to a misalignment of incentives. There are three parties to a student loan: the student, the lender—meaning the federal government because we use a government-as-lender system—and the college. A good student loan system would align the incentives so that no party can benefit by making the […]
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While the Biden administration has at least nine plans to forgive student loans, some are much bigger than others. And the two biggest have now run into legal buzzsaws. The Supreme Court (SCOTUS) eventually threw out its first plan in 2022. The second plan introduced a new income-driven repayment plan called SAVE, which, in practice, […]
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Editor’s Note: This article was originally published by Liberty Unyielding on April 10, 2022, and is republished here with permission. Joe Biden has provided billions of dollars in handouts to high-income people. The most recent example is his administration’s decision last week to suspend student loan repayments yet again, through August 31. It did that even though people with big student loans tend […]
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Mass student debt forgiveness is unpopular with Republicans and even some Democrats. As such, it’s unlikely that the Biden administration will forgive all $1.45 trillion in student loan debt prior to the midterm elections. But that hasn’t stopped unelected bureaucrats in the administration from working behind closed doors to forgive massive amounts of student loans […]
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Conservatives have long worried about the Bennett Hypothesis. Named for former Education Secretary William Bennett, it argues that the availability of federal financial aid programs leads colleges to increase tuition faster than they otherwise would. Conservatives have been right to worry. But there’s a way to break that link—by changing how we determine aid eligibility. […]
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Skin in the game for student loans, the idea that colleges should face financial consequence when their students default, is gaining momentum in policy discussions. After all, when students take out loans, the colleges get all their money upfront, leaving taxpayers holding the bag when students default on the loan payments years later. It seems […]
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Senator and Presidential hopeful Elizabeth Warren (D, MA) recently proposed a policy to cancel student loan debt. She wants to cancel up to $50,000 of debt for borrowers with annual household incomes under $250,00, including full cancellation for households with incomes under $100,000. It would be financed with an “Ultra-Millionaire Tax” – a massive redistribution […]
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Stealing from Shakespeare: “Let’s kill all the accreditors.” In this kinder and gentler age, most of us would be content if college accreditors simply resigned their positions and did something useful, such as selling cars. When you buy a car, you pay about the same as a year’s tuition fee at a good university. Yet […]
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Federal efforts to alleviate the high and rising cost of attending college through student loans have morphed from a policy challenge to a fiscal time bomb threatening to blow up the financial future of tens of millions of Americans and the government’s own solvency. Dressed up as a progressive achievement, it is actually a failure […]
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What’s to be done about the large and growing number of Americans who cannot repay their student loans? There are two new developments. The New York Times reports, “Senators Marco Rubio and Elizabeth Warren introduced a bill on Thursday that would prevent states from suspending residents’ driver’s licenses and professional licenses over unpaid federal student […]
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More and more Americans are going on to post–high school education, encouraged to do so by both governments and nonprofit organizations. According to the U.S. Department of Education, for example, “In today’s world, college is not a luxury that only some Americans can afford to enjoy; it is an economic, civic, and personal necessity for […]
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Nearly a decade ago, my then colleague Andrew Gillen suggested that one could say that higher education was in a bit of a “bubble”: over-exuberant “investors” in human capital, better known as students, were potentially misallocating their resources, becoming increasingly underemployed after graduation, leading to adverse financial consequences. In the private sector, bubbles, like those […]
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Exceptional athletes are often called game changers, but the real game changers in sports are the committees that set the rules. Changing the height of the pitcher’s mound changes the game. So too with expenses in higher education. The rules are changing. The House of Representatives has passed a tax reform bill that includes several […]
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Three-year bachelor’s degrees are back in the news mostly because colleges and universities are coming under heavy pressure to make higher education more affordable. Last month New York University, one of the most expensive schools, launched its “NYU Accelerate,” which officials called “a new program that outlines pathways to make it easier for some students to […]
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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 […]
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The federal government happily subsidizes inferior state colleges that graduate few if any of their students. That includes Chicago State University, which has a 12.8 percent six-year graduation rate. The Obama administration has rewritten federal student loan rules in a way that encourages colleges to raise tuition and effectively subsidizes the worst colleges the most. The Federal Reserve Bank of […]
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Connecticut is going through the motions of trying to tax Yale’s $25.6 billion endowment to help relieve the state’s $266 million shortfall. That effort will fail, but public opinion is starting to question the appropriateness of government-conferred tax benefits for university endowment funds. At Harvard, alumni as politically diverse as conservative Ron Unz and progressive […]
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By Peter Wood In 2014 Senator Marco Rubio lent his support to CASA, the Campus Accountability and Safety Act—the effort by Missouri Senator Claire McCaskill and New York Senator Kirsten Gillibrand to strip the due process rights of students accused of sexual assault. The bill died that year but McCaskill and Gillibrand brought it back […]
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For the past two autumns the two leading academic reform organizations, the National Association of Scholars (NAS) and the American Council of Trustees and Alumni (ACTA), have held events offering high praise to the liberal arts as a means to improve students’ writing and to provide them with the classical culture that Mathew Arnold calls […]
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Nearly everyone recognizes that student debt has risen to a level that will be difficult to sustain in the future given the nation’s slow growing economy and the sagging incomes of too many college-educated Americans. Nearly 40 million Americans are carrying some form of student debt; more than 7 million are in default on their […]
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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 […]
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By Diana Furchtgott-Roth, Jared Meyer This month, as 1.8 million newly minted bachelor’s degrees are handed out, most graduates will be coming off the stage with much more than a fancy piece of paper. Seventy percent will take an average of $27,000 in student loan debt with them as they try to build their careers after college. This […]
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• Campus Reform asked out-of-state students at UVA and UMD if they would be willing to give up their U.S. citizenship to become “undocumented students.”
• Out-of-state students at both universities pay nearly twice as much as in-state students and illegal immigrants pay.
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 […]
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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. […]
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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 […]
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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. […]
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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 […]
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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 […]
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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 […]
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