A new white paper from the Institute for Higher Education Policy, a nonprofit education research group, argues that conventional thinking about the cost of college is flawed and that education should be viewed as a long-term need and not a short term commodity.
The paper’s authors, George Washington University economist, Sandy Baum, and Carleton University economist, Saul Schwartz, compare higher education to health care and housing—two other market sectors that are well-established for long-term payment options. Baum and Schwartz write that “it is possible that education would seem more affordable if people thought about it as a fundamental need and as investment to be paid for over time, much as they think of housing.”
The report attempts to reframe the higher education conversation into one about looking at college as a long-term investment. Baum and Schwartz do acknowledge that postsecondary education is “an uncertain investment that does not pay off well for all.”
They go on to state that a weak economy, and the risks involved in “ending up on the lower end of the distribution of returns and being left with an unsustainable debt burden,” may make going to college unappealing to some. The report argues that instead of taking the impractical step of lowering the cost of college to eliminate the risk of a potentially bad investment, students who are unable to repay their loans should be subsidized to prevent the default from ruining them financially.
Baum and Schwartz also argue for reinstating the ability to discharge student loans through bankruptcy and eliminating the advantages that private lenders enjoy for high-interest student loans. They also encourage simplifying the pricing and financial aid systems and expanding grant aid to students from low to moderate income families.
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