Lawmakers Focus on Student Loans

David Wilezol at Minding the Campus writes that lawmakers on both sides of the aisle are targeting student loans for reform.

Senator Marco Rubio (R-Fla.) has offered a number of proposals to deal with rising student loan debt:

– The Know Before you Go Act would require the disclosure of colleges’ graduation rates as well as the amount of graduates’ student loan debt and various employment data.
– His Investing in Student Success Act calls for income-share agreements (ISAs). ISAs allow private investors to provide students with tuition funds in exchange for an agreement that the student provides the investor with a portion of his future earnings post-college.

Senator Elizabeth Warren (D-Mass.) is also focused on student loans:

– Her Bank on Student Loans Fairness Act would give student borrowers access to very low government interest rates — the same rates that the government gives to large banks.
– Warren has proposed to allow student loan borrowers to refinance at lower interest rates. She would fund her proposal with taxes on Americans making $1 million annually.
– She has also supported a bill that would allow students that were “medically distressed” to discharge their loans.

Wilezol writes that the two approaches are reflective of each supporter’s political leanings. Rubio, he says, is seeking market-driven reforms that can tackle the student loan problem with little government involvement, while Wilezol characterizes Warren’s reforms as “top-down government interventions to alleviate student debt.” But both, he says, could garner political support from young people in the upcoming 2016 election.

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