When we hear about the college-loan “crisis” we think of all those hapless undergrads who were lured into college with the notion that getting a degree would guarantee them a good job, only to find out that it doesn’t. But that’s only part of the problem. We also lure lots of people into graduate programs with easy federal financing.
In today’s Martin Center article, Andrew Gillen of Texas Public Policy Foundation writes about the need to change our grad lending programs. He writes, “Since the turn of the century, undergraduate lending has increased marginally from $37 billion a year to $43 billion. In contrast, graduate lending more than doubled, from $18 billion to $39 billion a year. Graduate lending has increased so rapidly that it will soon dominate the lending portfolio.”
Gillen points to data showing that a high percentage of graduate and professional schools leave their grads with heavy debts they can’t pay from the earnings from the work the programs trained them for (supposedly). As a result, taxpayers end up paying for a lot of dubious education.
What should we do?
Gillen argues that we should dump the federal graduate lending programs. What takes their place? Private lending would, but private lenders have skin in the game and would carefully evaluate proposed loans — unlike the feds.
Read the whole thing.