WASHINGTON — In order to solve the growing problem of student loan debt, stakeholders in higher education must ask deeper questions about the purpose of financial aid and whether it really creates socioeconomic equity over the long haul.
That was one of the main arguments that University of Kansas professor William Elliott III put forth recently during a panel discussion that featured The Real College Debt Crisis: How Student Borrowing Threatens Financial Well-Being and Erodes the American Dream, a new book of which he is co-author.
Instead of just looking at student-loan default rates and similar measures, Elliott said stakeholders must “begin to ask different questions, not just whether students who go to college and get debt are better off, but can they achieve similar long-term outcomes as someone who didn’t take out debt.”
When the question focuses on achieving similar outcomes for similar effort, “we start seeing slightly different results,” Elliott said, citing recent reports that show student debt is hindering homeownership.
“It’s about the ability to accumulate assets over the long term,” Elliott said. If student debt is affecting that in a meaningful way, it’s a problem, he said.
Elliott made his remarks at the New America Foundation, a thinktank where he also serves as a senior research fellow for the organization’s Asset Building Program.
As he has done in other talks at New America, Elliott promoted the virtues of Children’s Savings Accounts — or CSAs — as a potentially better way to help children from families of lesser means finance their college education.
