Higher Education Experts Discuss Student Debt Crisis, Free College
By Brittany Hackett, Communications Staff
The focus of the so-called student debt crisis has largely been on the high amount of outstanding loan debt and the high balances many students carry. However, the real problem in higher education and student loans is the number of students who are carrying student loan balances with no benefit from their education, according to a group of higher education experts speaking at an Urban Institute event on Thursday.
The event centered on the release of two new books on student loan debt:
- “Student Debt: Rhetoric and Realities of Higher Education Financing,” by Sandy Baum, a senior fellow at the Urban Institute; and
- “Game of Loans: The Rhetoric and Reality of Student Debt,” by Beth Akers, a fellow at the Brooking Institution, and Matt Chingos, a senior fellow at the Urban Institute.
During a panel discussion with the authors of both books, Akers said that policymakers, the public, and the media have “created policy solutions that attack the wrong problem and do not help those who need the assistance most” regarding student debt. The current solutions, she said, are targeted at helping people with high amounts of debt, rather than people who have made investments in higher education but have not seen returns on that investment.
Her book with Chingos focuses on understanding the student debt crisis by looking at the groups of students who are struggling most, including graduate students with high debt balances but high earnings potential and students with small debt balances who either did not complete their education or who have low earnings potential.
Instead, Chingos and Akers propose in their book that the student loan system should be brought back to its original mission of helping the neediest students attend college. Their solutions include simplifying the financial aid process by eliminating the FAFSA entirely (relying instead on Internal Revenue System (IRS) data and other markers to determine need), and moving to a one-grant, one-loan system—a concept NASFAA recently examined in a task force report released earlier month—and a one- or few-option repayment system.
Baum in her book expresses a similar view on the student debt crisis, but focuses instead on the perceptions of student debt in America versus what the data actually shows. For example, there is a perception that access to federal aid causes institutions to raise their prices, and while Baum said there is evidence of this occurring in the for-profit sector, “the evidence everywhere else is very unclear.”
The solutions posed in Baum’s book focus on how to prevent future students from taking on either too much debt or taking on debt for an education that will not prove valuable, as well as ways to help current students who find themselves in similar situations. According to Baum, two ways to achieve this are to place restrictions on what schools students can attend using federal funds and to give them better information and guidance to make those decisions.
When the discussion turned toward the idea of free college tuition for students attending public institutions, Baum said that it is “really important to understand that many policies being advocated as progressive are [in fact] regressive.”
“We should absolutely subsidize public education but to say it should be free is not the right way,” Baum said. “Schools that educate low-income students should have the resources they need. That’s the primary thing that we need to do.”
Chingos agreed, noting that in many cases free tuition does not cover all the costs associated with a college education, such as books and living expenses. “I worry if we do make it free for everyone we are going to increase demand for specific schools like publics, and if supply doesn’t keep up it may server to exclude low-income students from publics.”
Publication Date: 9/23/2016
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