Most conservatives are rightly skeptical of mass student loan forgiveness, which would be an expensive and unfair transfer to mostly high-income college graduates. At the same time, Americans generally believe that something must be done about student debt, which amounts to $1.7 trillion.
While borrowers who finish college or earn and advanced degree can usually repay their loans with few major problems, that is not true for more than 8 million federal borrowers who are in default. Since the default crisis is a direct result of the federal government’s reckless student lending, there is a role for government in fixing it. But that role need not entail mass loan cancelation.
That’s why I am proposing a new borrower-centered plan for student loan relief, published today by the Foundation for Research on Equal Opportunity. The blueprint offers an alternative to student loan forgiveness proposals which until now have dominated the student debt debate. While the plan does not call for unconditionally canceling student loans, it introduces a number of reforms to make student debt fairer and more manageable.