Sept. 22, 2014 SIGN IN | REGISTER

No More Gimmicks To Fix Student Loan Debt | Commentary

Perhaps most importantly, ISAs don’t change the structural problems that have created the debt explosion. Student debt is reaching record heights due to a combination of the recession and the inflation-outpacing growth of college tuition. Colleges can continue to raise tuition because the federal government ties loan awards to the cost of attending an individual college. The more college costs grow, the larger the loan award that students request, and the more loan funds colleges receive. Any real solution to the student debt problem will remove, or at least alter, this federal cushion.

By simply providing a new source of tuition funds that will be available to a select few, ISAs will not meaningfully change this incentive. They’ll certainly make it possible for some students to attend their dream colleges, but they can’t help the majority of American students who’ll need to borrow from traditional lenders. If Republicans really want to solve the problem of student debt, then they’ll need to look elsewhere.

Judah Bellin is an associate editor at the Manhattan Institute, where he researches higher education policy and edits Minding the Campus, the Institute’s higher-education website.

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