The Hidden Costs of Direct Loans

Autor/in	Bruns, Kevin
Titel	The Hidden Costs of Direct Loans
Quelle	In: Chronicle of Higher Education, 53 (2007) 42, (1 Seiten) PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	0009-5982
Schlagwörter	Student Financial Aid; Student Loan Programs; Federal Aid; Costs; Federal Government; Federal Legislation; Higher Education + Suchen Sie Ihr Suchwort? Finanzielle Beihilfe; Studienfinanzierung; Studienförderung; Cost; Kosten; Bundesregierung; Bundesrecht; Hochschulbildung; Hochschulsystem; Hochschulwesen
Abstract	For more than 40 years, student-loan providers have helped millions of American families achieve the kinds of dreams made possible by the best higher-education system in the world. Federal guaranteed loans, or loans made by individual lenders that are backed by the federal government, have made college more affordable by being the lowest-cost student loans anywhere. Recent revelations of practices between some colleges and lenders do not diminish those contributions. In the fantasy world of government accounting, the guaranteed-loan program does appear to cost the government more. The same holds true for calculating the direct-loan program's costs. The ruse is up: Even under accounting rules stacked in direct loans' favor, the cost difference between the programs is vanishing--and with it the rationale for proposals to expand direct lending to save money. In this article, the author discusses the overrating of direct loans and recommends that guaranteed loans are still the better choice, because the direct-loan program's subsidy rate includes billions of dollars in inflated earnings while the guaranteed-loan subsidy rate is actually lower. (ERIC).
Anmerkungen	Chronicle of Higher Education. 1255 23rd Street NW Suite 700, Washington, DC 20037. Tel: 800-728-2803; e-mail: circulation@chronicle.com; Web site: http://chronicle.com/
Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2017/4/10