Magazine article The Times Higher Education Supplement : THE

Claims of US Student Loan Crisis Are 'Fictional Narrative'

Magazine article The Times Higher Education Supplement : THE

Claims of US Student Loan Crisis Are 'Fictional Narrative'

Article excerpt

Beth Akers tells John Morgan why she sees the $1 trillion debt mark as more positive than scary

Despite US student loan debt passing the $1 trillion (£770 billion) mark, the idea of a systemic loans crisis is a "fictional narrative" that hinders solutions to the real problems, according to the co-author of a new book.

The creation of a single federal income-contingent loans system would work better than offering interest rate relief to borrowers under the current system, according to Beth Akers, co-author of Game of Loans: the Rhetoric and Reality of Student Debt, to be published next month by Princeton University Press.

State-run, income-contingent loans are used in higher education systems including England and Australia. Although the US federal loans system offers some income-contingent repayment plans, the current variety of different loan schemes is described as "impossibly difficult to navigate for consumers" by Dr Akers.

However, the book says that there is "no evidence of a widespread, systemic student loan crisis, in which the typical borrower is buried in debt for a college education that did not pay off".

Get real

Dr Akers, a fellow at the Brookings Institution thinktank in its Center on Children and Families, told Times Higher Education: "What happens when we talk about this fictional narrative is we miss the fact that there are very real problems - and the solutions that come out of the discussion of this fictional narrative in fact don't solve the real problems we have on the table."

Plans for student loan interest rate cuts from Democratic politicians including presidential nominee Hillary Clinton were "a great example of mischaracterisation of the student loans crisis leading to a solution that just doesn't solve the real problems that we're facing", Dr Akers added.

She also said that "when we look at who is struggling financially, in fact it is not the people with the largest debt burden. …

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