What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Search our Guide to Good
Start searching for your way to change the world.
Giving Compass' Take:
• Neal McCluskey and Diego Zuluaga at Cato Institute write on what they believe to be the worst federal student-loan program in American in the wake of outstanding college and university debt.
• What can nonprofits in the higher education sector do to make a dent when it comes to college affordability?
• Here's how canceling student loan debt could save the economy.
College debt feels out of control. Outstanding student loan-liabilities, almost all from federal loans, have more than doubled since 2009, to $1.57 trillion. News of distressed graduates with six- and even seven-figure balances abound. Some presidential candidates have called for widespread debt forgiveness and “free” college.
The complexity of the federal student-loan program is one of the reasons borrowers struggle to get a grip on their finances. It also makes oversight by policy makers and taxpayers, who foot the bill for loans that default, more difficult. Now the Trump administration is proposing a step in the right direction, which has some political promise: Cap a particularly ill-designed type of loan.
The complexity of the federal student-loan program is one of the reasons borrowers struggle to get a grip on their finances.
The feds currently offer multiple loan types with a dizzying array of terms and as many as eight different repayment options. Perhaps the least equitable are PLUS loans. The loans—which come in “Parent” and “Grad” varieties—are available without regard to income and are capped only at the total price of attendance, which includes all living expenses. They aren’t means-tested but require a credit check, which skews them toward wealthier families.
Read the full article about the worst federal student-loan program by Neal McCluskey and Diego Zuluaga at Cato Institute.