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Feds Miss the Mark Again on Student Debt Relief


To its credit, the Obama administration has at least recognized that the country is facing a massive student debt crisis. Unfortunately, most of its attempts to address the problem have missed the mark, and many are actually making things worse. Now the administration is trotting out a new plan: sending emails to people about to default on their student loans, informing them of the various government debt-relief programs they are eligible for. The New York Times reports:

“We think there are lots of people who could benefit from our income-based repayment programs but haven’t signed up, and we want to get to them before they default,” said Arne Duncan, the education secretary. “The challenge is getting the word out.”…

“There are a lot of people who still don’t know about these programs, so I think getting in touch with people who are falling behind will help, although I don’t know how much,” said Lauren Asher, president of the Institute for College Access and Success, a nonprofit group that supports the president’s outreach plan. “No one knows how many people are eligible, since we don’t have data on borrowers’ income. But we do think there are many more people who could benefit.”

This is undoubtedly a good option for those struggling to repay their student loans and we have no problem with people taking advantage of the aid on offer. But debt relief is a treatment for the symptom, not the root cause, of the problem. Rather than make it easier for people to pay off student loans, the government should be working to create a higher ed status quo in which students don’t take on massive debts in the first place.

[Ball and chain image courtesy of Shutterstock]

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  • Anthony

    “But debt relief is a treatment for the symptom not the root cause, of the problem.” Now, how does government facilitate a higher ed status quo as recommended above? Related material by Gary Rhoades “Adjunct professors are the new working poor” gives another higher ed wrinkle in quest for different model.

  • Boritz

    This makes the unemployment/underemployment of college grads a lot more attractive. Maybe it’s better to take that cab driver or yogurt shop job to qualify for the lower payment schedule. For those who have moved back in with parents consider only working odd-jobs for cash.

  • Kevin

    I think income based repayment is a terrible idea. It further serves to distort the pricing mechanism in higher education. This will lead to people acquiring a suboptimal amount of education and in the wrong subjects. Plus it s fundamentally unjust – why should the taxes from productive plumbers and chemical engineers go to subsidize unproductive dilettantes who spend years pursuing economically useless degrees.

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