Rules, Accountability, and the Student Debt Crisis

When it comes to the student debt crisis, the importance of institutional accountability cannot be overstated–nor can the importance of institutional diversity, the distribution of student financial aid, and growing rates of insolvency. The ongoing negotiated rulemaking, a process by which the Department of Education solicits advice from industry stakeholders, focuses particularly on issues of institutional accountability in offering federal loans and grants. An equitable accountability system will need to take diverse institutional characteristics into consideration so that underserved students, as well as the institutions that foster their success, are not set further behind their more affluent peers. This year’s negotiated rulemaking underscores that the pipeline to student debt should be constrained through institutional mechanisms, rather than administrations’ previous aims to influence consumer choice. It’s more important than ever to ensure protections for consumers, especially considering the public good that higher education provides and the individual expense it entails.

This report, the ninth installment in the Millennial Student Debt project, provides an overview of institutional trends in higher education which heavily influence student access and indebtedness, and outlines how the Department of Education may design accountability solutions with those issues in mind. The report outlines those issues in three sections:

Institutional Diversity – the key characteristics of higher education institutions and the student communities they serve;
Trends in Federal Student Aid – the distribution of student grants and loans given a diverse higher education industry, and;
Burgeoning Insolvency – the aggregate trends in the federal student debt portfolio across different types of borrowers

Read the full report here.