Home News Senator: Make Colleges Pay For Student Loan Default – Forbes

Senator: Make Colleges Pay For Student Loan Default – Forbes

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New Proposal: Make Colleges Pay

If you default on your student loans, what about the college or university you attended? What’s their financial responsibility? The answer: they don’t have any. If you don’t repay your student loans, then the federal government essentially eats the cost. (However, it’s possible the federal government could de-risk by securitizing these loans and selling them to a third party investor).

Sen. Josh Hawley (R-MO) wants to change that. He will introduce legislation that makes colleges and universities financially responsible if you default on your student loans.

“[American students and workers] shouldn’t have to further enrich colleges by taking on a mountain of debt or mortgage their lives in order to get a good-paying job,” Hawley said. “Yet, we have a system that preferences students who want to attend a four-year college over Americans who want to learn a skill. This system protects higher education institutions that have been padding their endowments with taxpayer money while they raise tuition.”

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