My latest piece for the American Prospect
is about student loan reform and what comes next:
...no serious remedy is on offer for the elephant in the room: tuition increases themselves.
Even if reformers succeed in eliminating FFELP--cutting the lenders altogether out of federal student loans, as all the major Democratic presidential candidates have advocated--the college cost problem will not be solved. We'll lose less of the federal higher ed budget to corporate subsidies, but colleges will continue to raise tuitions faster than inflation and more and more private loans will keep filling in the gap at higher cost to students.
We can try to control tuition directly, by rewarding colleges that keep costs down and punishing those that don't. We can promote competition on cost: spotlight the best community colleges, distance learning programs, etc. Even form better ways to rate these types of programs to raise their profile a little. And we can try to limit the loans available to students. That's what restoring bankruptcy protection for private loans will ultimately do.
Just as the growth of "creative" mortgages fueled the runup in house prices, the growing availability of student loans doubtless had some influence on the rise in tuition.