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Messengers of Bad News or Bad Apples? Student Debt and College Accountability

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  • Rajeev Darolia

    (Truman School of Public Affairs University of Missouri)

Abstract

Student loan debt and defaults have been steadily rising, igniting public worry about the associated public and private risks. This has led to controversial regulatory attempts to curb defaults by holding colleges, particularly those in the for-profit sector, increasingly accountable for the student loan repayment behavior of their students. Such efforts endeavor to protect taxpayers against the misuse of public money used to encourage college enrollment and to safeguard students against potentially risky human capital investments. Recent policy proposals penalize colleges for students’ poor repayment performance, raising questions about institutions’ power to influence this behavior. Many of the schools at risk of not meeting student loan default measures also disproportionately enroll low-income, nontraditional, and financially independent students. Policy makers therefore face the challenge of promoting the efficient use of public funds and protecting students while also encouraging access to higher education. © 2015 Association for Education Finance and Policy

Suggested Citation

  • Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, vol. 10(2), pages 277-299, March.
    • Handle: RePEc:tpr:edfpol:v:10:y:2015:i:2:p:277-299
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/EDFP_a_00161
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    References listed on IDEAS

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    Cited by:

    1. Rajeev Darolia & Dubravka Ritter, 2020. "Strategic Default Among Private Student Loan Debtors: Evidence from Bankruptcy Reform," Education Finance and Policy, MIT Press, vol. 15(3), pages 487-517, Summer.

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    More about this item

    Keywords

    student; loan; debt; student loan; defaults; public risk; private risk; college enrollment; human capital investments; low-income; nontraditional; public funds; higher education;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I20 - Health, Education, and Welfare - - Education - - - General

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