Structural Causes of Student Debt


An Investigation into the Structural Causes of Student Debt: Analysis and Policy Recommendations


Ali Mir, Raza Mir, and Sia Nassiripour


40 million Americans owe student debts that total $1.2 trillion. Many of them find it difficult to repay these loans; it’s estimated that 41% of the class of 2005 is now delinquent. Many observers consider this to be a crisis-in-waiting. This paper researches the underlying structural causes of the student debt crisis and proposes policy recommendations for addressing them.

Summary and Recommendations:

  • There is a strong need to establish standards for student-loan service providers that replace the variety of practices followed by different lenders such as the federal government, private investors, and banks and to streamline the process of loan procurement and repayment.
  • The federal and state governments need to ensure that regulations are followed by service providers, and must crack down on illegal practices. Scams involving debt relief must be monitored and prosecuted.
  • Federal and state governments should work towards offering plans to student borrowers that link monthly payments to borrower income. Debt write-offs in special cases must be considered.
  • Greater support from state budgets towards public higher education is necessary to lower out-of-pocket tuition costs for students.

Webinar Date(s)

Friday, May 25th, 2016
12 pm