The Conservative Approach to Student Loans

"For much of the new year, Jason Delisle has taken every available opportunity to argue against a return to the bank-based federal student loan system that existed before 2010," Inside Higher Ed reports.

"On panels, in policy papers and in guest columns and op-eds, the American Enterprise Institute resident fellow has made the case that returning to a bank-based system from the current set-up where the government originates all federal student loans -- a plank of the GOP platform -- is misguided policy.

'I’m [generally] inclined to believe that if the market is involved, the product will be better,' Delisle says. 'This was a case where that wasn’t true.'

With Republicans controlling the White House and Congress for the first time in a decade, questions about how they will approach federal student aid, and how far they will veer from the path on loan policy staked out by Obama, are abundant.

... Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said there’s an ideological assumption that the private loan market can better address the needs met by the PLUS loan programs now. But NASFAA and other advocacy groups argue that the PLUS loan programs provide subsidies to low-income and minority students to attend college and graduate programs who wouldn't otherwise.

'In a perfect world, I understand why that seems feasible. But we don’t live in a perfect world and the education space is an imperfect market,' Draeger said. 'You’re just going to exacerbate inequality and achievement gaps.'

Draeger said NASFAA would be open to examining changes to PLUS, including assessing the ability of some parents to pay back loans. But seeking to eliminate the program entirely would unite a number of stakeholder groups in opposition, he said."

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 2/22/2017

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