Despite High Default Rates, Federal Student Loans Grant Access to Higher Education, Report Claims – NASFAA
Concerns over college affordability have made many lawmakers question whether the student loan program is working — and if not, how it could be improved — while others have deemed the program “fundamentally broken.” As lawmakers work to reauthorize the Higher Education Act (HEA), many higher education experts have addressed issues with the federal student loan program and analyzed whether it is helping students succeed.
Jimmie Lenz, academic director of the Financial Technology Graduate Program at Duke University’s Pratt School of Engineering and a clinical assistant professor of finance at the University of South Carolina Moore School of Business, analyzed the health of the student loan portfolio for an article published by the Manhattan Institute this month, and claimed that, even with some downfalls, student loans provide access to many students who could otherwise not afford college.
Despite high default rates and non-repayment rates among borrowers — both of which are expected to continue to grow — Lenz wrote that he believes the federal student loan program has succeeded in the mission Congress laid out in 1965 in HEA — reducing unemployment rates and offering a college education to many who may not have attended otherwise.