If private lenders are allowed back into the federal student loan program — a program from which they were removed during the Obama administration under the Affordable Care Act of 2010 — it would preclude “universal access to student loans at universal terms,” a new paper released Wednesday states.
“If policymakers believe the most important goal is to provide widespread access to loans at terms the government sets, then there is nothing private capital can offer over the Direct Loan program,” Jason D. Delisle, a resident fellow at the American Enterprise Institute’s Center on Higher Education Reform, argues in the paper.
And it comes at a time when questions abound about whether the administration of President Donald J. Trump and a Republican-controlled Congress will seek to revert to the bank-based system that President Barack Obama and a Democratic-controlled Congress scrapped back in 2010 — something both Trump and a key Republican lawmaker have indicated they hope to do.
At the forum, some panelists called for a simplification of both the federal student loan and repayment process.
Beth Akers, a senior fellow at the Manhattan Institute, said the roughly half dozen different federal loans and a large menu of repayment plans makes things complicated for students and families.
“If I were to be able to fix one thing, that would be it,” Akers said, explaining that she would prefer “one loan and a single repayment program with a default enrollment into income-based repayment.”
