Deanne Loonin of Harvard University – Hale and Dorr Legal Services Center and Julie Margetta Morgan of the Bill & Melinda Gates Foundation have written Federal Student Aid: Can We Solve a Problem We Do Not Understand?, forthcoming in the Utah Law Review. Here is the abstract:
Americans currently owe over $1.3 trillion in student loans, more than two and a half times what they owed a decade ago. This explosion in student loan debt comes at a time when a college degree is widely considered a necessity for economic mobility. As the costs of higher education continue to grow, most individuals seeking to get ahead and improve their lives through education rely on loans to finance their degrees.
The government is by far the largest student loan bank, servicer and collector in the United States. Yet by almost any measure used to justify the government’s investment in student loans—ensuring that all students have access to college, closing our country’s wealth and opportunity gap, educating individuals to compete in a global economy—the federal student loan program is failing.
Policymakers and advocates across political spectrums have proposed a long list of reforms to address these failures. This article argues that the rush to solutions is premature because experts are writing policy prescriptions without fully diagnosing the problem. Further, we argue that there is insufficient information to make this diagnosis. We focus on the lack of information about the way the program is governed and administered by the federal government and its contractors, asserting that greater transparency into the program’s administration is a necessary first step in understanding the failures of the federal student loan program.
This article describes the gaps in existing information on student loans. We then focus on how the Department of Education’s policies and practices affect program success. In the final sections, we argue that improved public access to information about the administration of the student loan program is essential to enhance both policymaking and outcomes for student loan borrowers, describing some available options for improving access to information and how to use these tools more effectively.