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Student Debt

October 21, 2011 • Volume 21, Issue 37
Is the college-loan system fair?
By Marcia Clemmitt

Introduction

A man costumed as the “Master of Degrees” and holding a ball and chain representing his college-loan debt (AP Photo/Jacquelyn Martin)
Costumed as the “Master of Degrees” and holding a ball and chain representing his college-loan debt, unemployed graduate Gan Golan attends the Occupy D.C. protest in Washington's Freedom Plaza on Oct. 6, 2011. It was one of several demonstrations around the country protesting corporate greed and the gap between rich and poor. (AP Photo/Jacquelyn Martin)

As Congress tries to reduce the federal debt, it is forcing federal loan and grant programs for higher education to fight for scarce dollars. In negotiations this summer over the debt ceiling, lawmakers shifted money from loan programs for students who borrow for graduate and professional school and students who pay back loans on time to Pell Grants for low-income students. The government has implemented several new programs to make the loan system fairer, including making payments easier for lower-wage earners and providing federal loans directly to borrowers rather than through banks, to avoid subsidizing commercial institutions. However, some consumer advocates say unless education debt can be forgiven through bankruptcy proceedings, as most other debt can, the system will never be fair to student borrowers. Meanwhile, tuition continues to rise, and total higher-education debt has surpassed credit-card debt for the first time, rising to $830 billion in mid-2010 and continuing to climb.

ISSUE TRACKER for Related Reports
College Financing
Oct. 21, 2011  Student Debt
Jan. 25, 2008  Student Aid
Dec. 05, 2003  Rising College Costs
Nov. 20, 1992  Paying for College
May 19, 1989  What's Behind High College Price Tags
May 23, 1986  Student Aid
Aug. 14, 1981  Tuition Tax Credits
Feb. 24, 1971  College Financing
Nov. 27, 1968  Financing of Private Colleges
Mar. 25, 1959  Costs of Education
May 04, 1955  Higher Education For The Millions
BROWSE RELATED TOPICS:
College Financing and Funding
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