Graduate student lending is out of control. Students are effectively borrowing without limit to pay for graduate and professional schools, many of which offer little or no return on their investment. The status quo is untenable for both students, who bear the risk of taking on unaffordable debts amid uncertainty about the future of forgiveness programs, and taxpayers, who are ultimately on the hook for bailouts when students cannot repay debts that should never have been issued in the first place. This proposal seeks to remedy those challenges while also making accommodations for the second-order effects of the proposed policy changes.
The proposed policy changes will follow the format for a policy solution that was outlined in a previously coauthored publication that can be found here. This report and the framework that it proposes was the product of a bipartisan effort to identify a framework for solving the problems facing graduate student lending in the United States. The solution outlined here offers a particular interpretation of that framework using a market-oriented approach.
