Nearly all American institutions of higher education raise money they put into endowments—money that is kept invested in securities. At the same time, many of their students borrow money from the federal government so they can afford to attend. As I will explain, this system is fraught with problems. It would be far better if … Continue reading “Universities Should Invest in Their Students, Not Securities”
Parent PLUS is not typically the loan program making headlines when student loans are in the news. But over the past several years, it has become a central part of America’s higher-education financing system. Under Parent PLUS, parents can borrow freely—with no limit—from the federal government to support their children’s education. Government programs without significant … Continue reading “Parents, Student Loans, and Government: An Unhealthy Mix”
College is expensive. Even in today’s deeply divided political climate, all Americans seem to agree on that. But while most, if not all, Americans agree that student loan debt is a big problem, the proper role of the federal government in distributing loans remains hotly contested. A solution could lie in offering a more attractive … Continue reading “Income Share Agreements Offer a Promising Alternative to Federal Loans”
Last month, Amanda Ripley, writing for The Atlantic, asked a good question: why does higher education in the United States cost significantly more than in every other OECD nation except Luxembourg? Related to that: Why have college costs risen sharply over time? Unfortunately, while the questions Ripley raises are compellingly important, the answers she provided … Continue reading “Answering the Perennial Question: Why Does College Cost So Much?”
No one can accuse Education Secretary Betsy DeVos of inaction. Just within the past few weeks, her Department of Education announced the overhaul of two major Obama-era regulations. The next stage of DeVos’ agenda will review several of the rules governing which higher education institutions and programs are eligible for federal funding, with an eye … Continue reading “The Innovation Dilemma Facing Betsy DeVos”
Student loan debt remains a burden for millions of college graduates and dropouts, but the federal government has not yet hit the brakes on its loan engine. Now, it’s becoming a greater problem for parents. A recent analysis by Mark Kantrowitz, a higher education expert who publishes Saving for College and Private Student Loans, noted … Continue reading “PLUS Loans: Subtraction by Addition?”
In 1965, President Lyndon Johnson signed the Higher Education Act into law, inserting the federal government irrevocably into the inner workings of America’s colleges and universities. The bill increased federal money given to universities, provided scholarships, and created the federal student loan system—now a $100 billion yearly enterprise. Since then, the Act has been reauthorized … Continue reading “A Promising Chance at Reform with Congressional Higher Ed Bill”
The Department of Education’s method for awarding college students financial aid has many perverse effects. It contributes to rising tuition, keeps students in the dark about their aid eligibility for too long, gives some colleges unfair special treatment, and does not incentivize colleges to improve. But a small tweak would address those problems: replacing the … Continue reading “How to Stop Student Aid from Driving Up Tuition”
It’s been 30 years since then-Education Secretary William J. Bennett took to the pages of The New York Times to chide colleges for their “greedy” behavior. He decried the negative effect federal student aid seemed to have on tuition, namely, that it allowed universities to raise prices without feeling the consequences of reduced demand or lower-quality … Continue reading “Does the Bennett Hypothesis Still Matter?”
Many Americans are concerned about the rise of university tuition. “The Bennett Hypothesis Turns 30,” a research paper by Jenna A. Robinson, merges findings from 25 empirical studies on the “Bennett Hypothesis”: Reagan-era Education Secretary William J. Bennett’s theory that large amounts of federal student aid drive up the cost of tuition. Executive Summary In 1987, … Continue reading “The Bennett Hypothesis Turns 30”