Tuesday, July 22, 2014
Much of the federal government's interest in creating accountability standards for higher education focuses on the cost and student loan debt. The media has recently highlighted the rising amount of student debt. However, a recent report gives a different perspective to the student loan debate: that the rising interest in protecting students against substantial loan debt is a factor of more upper and middle class students needing to take out loans. A recent post at Brookings Institution states "findings [that] suggest that the recent surge in attention paid to student loans may
stem in part from increasing debt among high-income households." The author, Matthew M. Chingos, explains:
An era in which students from low-income families used loans to supplement grants has given way to a system dominated by the wealthiest Americans, many of whom were born to affluent parents. This trend supports the theory that the intensification of the public debate over student loans may be due in part to the increased prevalence of debt among more affluent households. Given the unlikely reversal of this trend, political pressure on policymakers to offer broad-based “relief” to borrowers, such as a reduction in interest rates, may continue to intensify. Absent credible evidence that such a policy would have a large “trickle-down” effect on the broader economy, policymakers should instead focus on the core mission of the federal loan program: promoting access to higher education on terms that are fair to both students and taxpayers.
Read Why Student Loan Rhetoric Doesn’t Match the Facts here.