Think tank releases revised paper on Restoring Higher Education in America; President and CEO Jimmy Sengenberger expresses concern about recent Brookings Institution report

Denver, Colo., January 16 - Yesterday, the Millennial Policy Center published an updated version of its Restoring Higher Education in America policy paper, authored by MPC President and CEO Jimmy Sengenberger. The issue paper comes less than a week after a Brookings Institution study reported that the student debt situation is a “crisis” that is “worse than we thought,” finding that “nearly 40% [of borrowers] may default on their student loans by 2023.”

“The Brookings report is a startling reminder that the college cost calamity and student loan bubble are indeed a catastrophe in the making,” stated Sengenberger. “It is imperative for students and graduates alike that we address this crisis today, rather than kicking the can down the road.”

The MPC paper narrows in on many of the deep problems inherent within the nation’s higher education system that have caused costs to rise seemingly without end and proposes key steps for real reform at both the federal and state levels.

“Our research shows that the burden of student loans isn’t expanding because college is becoming more expensive. Rather, school is too expensive because of the growth of student loans and grants,” Sengenberger said. “The fact is that ‘free college’ and student loan forgiveness would greatly exacerbate the cost crisis, not resolve it. It’s essential that any substantial higher education reform measures directly address the main drivers of this nearly-$1.5 trillion college calamity by injecting real market forces – especially competition – throughout the system.”

The revised paper also discusses in greater depth the need for increased bankruptcy protection for existing borrowers as well as new borrowers – reinjecting risk back into the student loan marketplace.

“In the 1970’s, Congress, in its infinite wisdom, virtually eliminated the ability for student loan borrowers to discharge their loans in bankruptcy, making it easier for students to get loans and contributing to the skyrocketing cost of higher ed,” Sengenberger stated. “It was at the time a risk for the lender – but it’s no longer a risk for the lender, typically the federal government, and qualifying for loans is arguably much easier than getting into the actual school. Coupled with dramatic reforms to the student loan system, it is essential that existing borrowers and new borrowers alike be permitted to discharge their loans in bankruptcy, just like most other classes of loans, after a 5-year repayment window has passed.”

The MPC is deeply concerned about the issue of college costs and student debt and will continue to address the issue as developments unfold.

The Millennial Policy Center seeks to offer practical, principled solutions to our nation’s policy challenges, with an emphasis on reaching out to and representing the Millennial Generation (born 1981-1998). Learn more about the Center’s Higher Education Reform Initiative.

For more information visit www.MillennialPolicyCenter.org.

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