A Risk Sharing Proposal for Student Loans
Title: A Risk Sharing Proposal for Student Loans
Author: Tiffany Chou, Adam Looney & Tara Watson
Source: The Hamilton Project
Authors of a recently released policy brief by The Hamilton Project argue that institutional accountability in the federal student loan program has weakened.
As a solution, the authors propose the use of risk-sharing based on cohort repayment rate to increase institutional accountability. Under their proposal, underperforming institutions would be assessed a penalty dependent upon student progress in repaying federal loans within the first five years of leaving the institution. Further, the revenue from the risk-sharing program would be used to fund a mobility bonus system to reward institutions serving low-income students well.
To learn more and read the full policy brief, please visit The Hamilton Project’s website.
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