Importance of Student Loan Policy

December 4, 2012

Last Thursday, Bloomberg Businessweek published an excellent piece by Peter Coy on what they called “The Needless Tragedy of Student Loan Defaults.” It’s an important look at the options available to student loan borrowers and provides important insight from Mark Kantrowitz, operator of the FinAid.org website and one of the most important thinkers on student loan policy.

One of the few things we can say with certainty about student loan policy is that it is complicated and student debt is on the rise. As the article notes, “for the first time on record, the delinquency rate on student loans has jumped above the rate for credit cards, car loans, or any other kind of consumer loan.” The article does a good job of walking through the options available to borrowers facing challenges with the debt. For too many, these options are not well understood.

This is an issue that Capella takes seriously. This summer we published a policy paper examining the process a student goes through when borrowing to pay for their education and made policy proposals for address the issue of over-borrowing. As we head into 2013, these issues are going to become increasingly relevant.

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