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Sunday, 5th October 2008

New America Foundation Report Exposes Erroneous and Misleading Information on Federal Student Loan Costs

New America Foundation Report Exposes Erroneous and Misleading Information on Federal Student Loan Costs
Source: New America Foundation

Today the New America Foundation's Education Policy Program released "Cost Estimates for Federal Student Loans: The Market Cost Debate," by the program's Research Director Jason Delisle. This paper exposes misleading and erroneous information published by student loan industry trade associations and government agencies regarding the cost of federal student loan programs. The report comes at a time when disruptions in the credit markets and a presidential race could set the stage for changes in student loan policy.

Many budget experts and stakeholder groups have argued that official cost estimates for federal student loans reported by budget agencies are inaccurate because they do not reflect "market costs" -- what a private entity would charge taxpayers to fund and administer the same benefits and services that the government provides. The Government Accountability Office (GAO), private consulting organizations, and student loan trade associations have all weighed in. Unfortunately, their conclusions are confusing and often incorrect. "Cost Estimates for Federal Student Loans: The Market Cost Debate" aims to help policymakers, the media and the public better understand this complicated issue.

+ Full Report (PDF; 344 KB)


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