March 4, 2023
The Supreme Court can’t solve the student-debt crisis
Plus: Why a “shame list” won’t change higher ed, but FREOPP’s model legislation could; our scholar team grows; and save the date in November 2023
Aligning higher education’s cost to its value to make students better off: Student loan forgiveness is back in the news, with the U.S. Supreme Court hearing oral arguments in two cases challenging the Biden Administration’s plan to cancel $400 billion in student debt. But as FREOPP Senior Fellow Preston Cooper argued in The Washington Post this week, focusing on the Court isn’t enough: Policymakers need to ask themselves how we got into this mess in the first place. If Congress doesn’t reform the federal student loan program, the debt crisis will only get worse—with or without debt forgiveness. That’s why Preston proposes a new system to hold colleges accountable for degrees that cost too much and deliver too little. Among other things, his plan would discourage low-value degrees by requiring colleges to compensate taxpayers when student loans go unpaid, and it would reinvest proceeds from its recommended risk-sharing system into financial aid for low- and middle-income students enrolling in low-cost, high-value programs. Read Preston’s full proposal FREOPP.org, and see the policy appendix for even more details.
Wondering how to put Preston’s ideas into action? Preston’s plan would save an estimated $6 billion annually while protecting students from educational programs without a positive return on investment. To help make it a reality, FREOPP developed new model federal legislation based on his recommendations: the Higher Education Accountability for Loans (HEAL) Act of 2023.
A “shame list” for low-financial-value college degrees isn’t nearly enough: Meanwhile, earlier this year, the U.S. Department of Education released a proposal to create a list of federally funded higher education programs with low financial value. Lavishing taxpayer money on thousands of programs with little financial return has not kept 11 million borrowers from defaulting on becoming delinquent on their federal student loans in 2019 alone. Can shaming the colleges while continuing to permit them to access federal grants and loans work? Preston notes that while transparency is a step in the right direction, previous attempts to shame low-value programs have had little effect on students’ enrollment decisions. That means that a “shame list” cannot be the last word on accountability in higher education and makes it all the more urgent for Congress to step in and ensure that taxpayer dollars only flow to institutions that provide students with a financial return for their investment in education.
→ Hear Preston discuss the Biden Administration’s many student debt forgiveness efforts—including an ill-advised proposal to expand income-driven repayment plans—on WFEA. The host also recommends The Tassel, our sister Substack newsletter dedicated to higher ed. If you aren’t reading it yet, it’s a great way to keep up with Preston’s work.
See past issues of “The Tassel”
FREOPP’s scholar ranks are growing in 2023: The latest addition to FREOPP’s scholar team is George P. Bush, a new Senior Fellow whose work will focus on what states can do to expand social mobility by better managing their natural resources. George served two terms as Land Commissioner of the Texas General Land Office, which is responsible for managing state-owned lands and mineral rights. This experience, in addition to his military intelligence background and time working in corporate and securities law, real estate, and private equity, gives him a unique perspective on how the government can contribute to expanding opportunity to help people get ahead in life. As George puts it: “That’s the part of FREOPP that excites and drives me, and it really shouldn’t be partisan: researching, examining, and supporting the ideas that can return our country to a path of prosperity that all of us can enjoy.”
Save the date for Freedom & Progress 2023: Planning is underway for FREOPP’s annual Freedom & Progress conference!
Please save the date and plan to join us at the Park Hyatt in Washington, D.C., November 5-7, 2023.
Stay tuned for more information about registration, speakers, and more. In the meantime, you can watch the three-minute video recapping last year’s event to see what the conference has to offer.
Thanks for keeping up with FREOPP, and have a great weekend!
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