Student Debt and Higher Education Risk

Student Debt and Higher Education Risk



To borrow for college is to take a risk. Indebted students may not earn enough to repay their loans after they graduate or, worse, may fail to graduate at all. For students who cannot pay for college without borrowing, this risk is both a disincentive and a penalty. Greater risk undermines the efficacy of federal financial aid policy that seeks to promote access to higher education. This Essay situates education borrowing within a larger cultural and political trend toward placing risk on individuals and criticizes this development for its failure to achieve any of the typical goals of legislation that allocates risk””such as prevention of moral hazard or other, particular public policy outcomes.

The Essay describes dramatic increases in student borrowing and explains the negative effects of greater reliance on debt, which increases the risk of investing in higher education. The Essay contends that recognizing student debt as a mechanism that transfers risk bolsters criticisms of increased borrowing and provides a consistent way to evaluate aid policy. The Essay outlines an insurance regime as the logical response to undesirable or unmanageable risk. Such a regime would preserve access to higher education and mitigate the danger of borrowing for college.

 

 

PDF

More in this Issue

The Difficulties of Democratic Mercy

In response to Dean Martha Minow’s 2014 Brennan Center Jorde Symposium Lecture, Forgiveness, Law, and Justice, 103 Calif. L. Rev. 1615 (2015), available here. Dean Martha Minow’s wide-ranging and learned Jorde lecture Forgiveness, Law, and Justice is characteristic in its unstinting ambition. The lecture does not merely sweep in complex normative and empirical questions concerning […]

Seeking Emotional Ends with Legal Means

In response to Dean Martha Minow’s 2014 Brennan Center Jorde Symposium Lecture, Forgiveness, Law, and Justice, 103 Calif. L. Rev. 1615 (2015), available here. Can we use legal institutions to cultivate forgiveness after mass violence, genocide, or pervasive group-based injustice? This is the question Dean Martha Minow asks in her provocative and pathbreaking Jorde Lecture. […]

Forgiveness, Forgetting, and Resentment

In response to Dean Martha Minow’s 2014 Brennan Center Jorde Symposium Lecture, Forgiveness, Law, and Justice, 103 Calif. L. Rev. 1615 (2015), available here. First, I will draw some distinctions within the dimension of forgiveness, mapping in somewhat more detail the terrain Dean Minow has sketched for us. These distinctions are between what I will […]

Forgiveness, Law, and Justice

Presented at the Brennan Center Jorde Symposium on October 20, 2014 (University of California, Berkeley) and January 8, 2015 (University of Chicago). Should law encourage people to forgive one another””and should law be used to forgive people for wrongdoing? Or is it a mistake to promote greater connections between law, with its need for predictability, […]

The Fair Market Value of Public Resources

Government agencies and officials are regularly criticized for selling public assets at a loss. Such criticisms arise in a host of contexts, ranging from sales of real estate and natural resources to sales involving intangibles, such as the right to broadcast over the airwaves or to operate a toll road or a set of parking […]

Naturalizing Immigration Imprisonment

Only recently has imprisonment become a central feature of both civil and criminal immigration law enforcement. Apart from harms to individuals and communities arising from other types of immigration enforcement, such as removal, imprisonment comes with its own severe consequences, and yet it is relatively ignored. This Article is the first to define a new […]