A Risk Sharing Proposal for Student Loans

May 10, 2017

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Title: A Risk Sharing Proposal for Student Loans

Author: Tiffany Chou, Adam Looney & Tara Watson

Source: The Hamilton Project

Authors of a recently released policy brief by The Hamilton Project argue that institutional accountability in the federal student loan program has weakened.

As a solution, the authors propose the use of risk-sharing based on cohort repayment rate to increase institutional accountability. Under their proposal, underperforming institutions would be assessed a penalty dependent upon student progress in repaying federal loans within the first five years of leaving the institution. Further, the revenue from the risk-sharing program would be used to fund a mobility bonus system to reward institutions serving low-income students well.

To learn more and read the full policy brief, please visit The Hamilton Project’s website.

If you have any questions or comments about this blog post, please contact us.

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