Dr. Richard Vedder, Distinguished Professor Emeritus of Economics at Ohio University, appeared on PBS Newshour’s Washington Week with Gwen Ifill on Monday, June 9, the day of President Barack Obama’s executive order to allow more borrowers to tie student loan repayments to income levels. Vedder is also Director of the Center for College Affordability & Productivity.
“The average person graduating from college in 2013 borrowed nearly $30,000 in student debt. To help Americans overburdened by their loans, President Obama signed a new executive order that expands on a 2010 law that capped federal loan repayments at 10 percent of borrowers’ monthly income,” reports the PBS Newhour website.
“I think this is not dealing with the real root cause of the problem,” Vedder said. “The reason there’s so much student debt, over a trillion dollars to begin with, is that tuition fees and college costs in general have been rising … at an ever-faster rate of increase in the last several decades. This is not dealing with the problem in a fundamental sense. It’s a panacea that is addressing the short-run problems of people who are distressed. It’s not dealing with the long-term problem on how we get out of this mess, which is still growing and will continue to grow, and this does nothing to stop that….
“Frankly, I think we’re in a problem where we’re not under-invested in higher education; we’re over-invested…. Part of the problem is the student loan program itself. The student loan program enables colleges to raise their tuition fees. It almost invites them to raise tuition fees, creating an academic arms race which I think has become very costly, very inefficient, and very harmful, particularly to lower-income people.”
Watch PBS Newshour: “Will loan forgiveness offer long-term student debt solution?”
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