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Aug. 1, 2024
Financing Graduate Education: Next Steps for Federal Policy
This report is a follow-up to our organizations’ joint 2023 report, which introduced five foundational pillars needed to address crucial issues in federal graduate financing: (1) setting reasonable loan limits, (2) providing targeted grant aid to students and institutions, (3) ensuring sufficient value and return on investment for students and taxpayers, (4) enhancing the regulatory structure and consumer protections for private lending, and (5) improving data disclosure and transparency.
This report further examines key issues and questions raised in our initial report and explores the breadth of specific policies that could achieve what is needed in each pillar. These policies need to be thoughtfully balanced across the pillars. For instance, binding loan limits would have serious implications for access, which should be addressed with targeted increases in grant funding. At the same time, constraints on federal lending would likely spur growth in private education lending, which should be met with appropriate reforms to the regulations that protect borrowers from usurious terms. We offer these policies as examples of potential approaches, but we are not specifically recommending them—nor do we believe that the following is a comprehensive list of possibilities.
Key Points
- In the interest of students and taxpayers, it is time for bipartisan and commonsense graduate financing policy reform.
- This issue’s complexity and importance demand a comprehensive solution that balances protecting students and taxpayers from low-value programs with ensuring equitable access to high-value ones.
- Doing so will require additional support to students and institutions that have need and provide significant value and a system with sufficient data transparency to understand the effects of the policy changes.
MEET OUR AUTHORS
These materials have been prepared for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel.