Getting the Student Loan Debt Problem Under Control
The cost of going to college rises significantly every year, and more students are getting themselves deep int0 debt by the time they graduate. The New York Times rounded up a bunch of experts to debate what we can do to make things better for students who are being forced to take out enormous loans to attend school. Here’s what they came up with:
• Allow financially distressed student loan borrowers a way to find relief. People who file for bankruptcy can find relief from consumer debt, but not from student loan debt, which cannot be discharged in bankruptcy.
• For-profit colleges get most of its revenue from federal financial-aid programs, despite having poor graduation rates. We need to have better regulations to ensure that taxpayer money isn’t going into toxic programs.
• The costs of going to college are getting out of control, and colleges need to slow that rate and get a grip on their spending (high-tech student dorms are nice, but all students really need are a place to sleep and an Internet connection).
• Cutting grants for low-income students is short-sighted (duh).
• Colleges lend out tens of thousands of dollars to students without knowing whether or not these students will be able to repay them after they graduate. If students default on their loans, colleges should assume some of those risks.
• College students aren’t very financially literate. Get them into some sort of program so they understand the financial risks of borrowing money before they take out loans so they’re not suddenly surprised by how difficult it is to manage student loan payments after they’ve graduated.