Higher Ed Watch: Latest Publications

The Subprime Student Loan Racket

Erin Drankoski — Mon, 26 Oct 2009 07:13:00 -0400

At the age of forty-three, Martine Leveque decided it was time to start over. For several years, she had worked in the movie business, writing subtitles in Italian and French for English-language films, but her employer moved overseas. She then tried her hand at sales, but each time the economy dipped sales tumbled, along with her income, and as a single mother with a teenage son, she wanted a job that offered more security. She decided to pursue a career in nursing, a high-demand field where she could also do some good.

Rethinking the Middleman

Education Policy — Mon, 13 Jul 2009 01:00:00 -0400

Each year, the federal government guarantees billions of dollars in loans disbursed through the Federal Family Education Loan (FFEL) Program, a public-private partnership that provides financial aid to students attending institutions of higher education. Despite the significant investment of taxpayer dollars, the actual administration of the FFEL Program is largely handled by participating lenders and a group of 35 non-federal guaranty agencies across the country. Guaranty agencies perform a number of administrative functions, such as disbursing federal default insurance provided to private lenders issuing FFEL loans, preventing loan default, and collecting or rehabilitating loans that borrowers have failed to repay.

Student Loan Purchase Programs Under the Ensuring Continued Access to Student Loans Act of 2008

Education Policy — Thu, 15 Jan 2009 17:05:00 -0500

An updated version of this paper can be found here.

In May of 2008, Congress passed the Ensuring Continued Access to Student Loans Act (ECASLA) in response to concern that credit market conditions could disrupt federal student loan availability. The law gives the U.S. Department of Education temporary authority to purchase federally backed student loans made by private lenders, effectively providing a secondary market for the loans. Congress opted to leave the new purchase authority largely undefined in statute, giving the Department considerable discretion to design and administer it. To date, the Department has created four separate loan purchase arrangements under ECASLA: a put option; a short-term purchase program; a financing arrangement; and an asset-backed commercial paper support program. This issue brief provides a detailed description of these arrangements and will be updated as new information becomes available.

Advice for Duncan: The Thinker

Cecille Isidro — Mon, 12 Jan 2009 14:52:00 -0500

I recommend early focus on education finance matters. The administration needs to meet and improve upon campaign promises requiring substantial resources. There are pressing student loan issues and pent-up demands for No Child Left Behind (NCLB) funding. Because the stimulus and budget are being developed now, you have a window of opportunity to address all three areas.

BCS Teams Flunk Off the Gridiron

Cecille Isidro — Sun, 21 Dec 2008 22:33:00 -0500

In a few weeks, the Florida Gators and Oklahoma Sooners will face off on college football's biggest stage in the Bowl Championship Series' National Championship game. Unfortunately, many of the college seniors playing in this game will not be walking across the graduation stage next May. Instead, their schools will revel in the short-term glory of gridiron success, while the players will have to face the long-term consequences of joining the workforce without a college degree.