SEO Headline (Max 60 characters)

Student Loans Viewed Differently Than Other Debt, Study Finds

March 11, 2015

Borrowers of federal student loans have a "fundamentally different" relationship to their debt than other financial obligations, according to a new report by the New America think tank.

The report, written by Jason Delisle and Alexander Holt, is based on an analysis of several focus groups of student loan borrowers across the country.

It finds, among other things, that well-intentioned features of the federal loan program -- like making it easier for borrowers to delay payments -- sometimes work not as a fail-safe for borrowers who absolutely cannot pay but as a procrastination tool. Borrowers then end up with larger loan balances to pay.

Some borrowers also reported feeling that the "money wasn't real" when their college distributed federal loans to them, especially when the loans came in the form of refund checks. 

"The solution," Delisle and Holt write, "is not to admonish borrowers for laziness or irresponsibility, but to reexamine what makes federal student loans different, and what processes and incentives can be put in place to correct for those differences."

 

Share Article

Michael Stratford

Michael Stratford, Reporter, covers federal policy for Inside Higher Ed. He joined the publication in August 2013 after a stint covering the Arkansas state legislature for The Associated Press. He previously worked and interned at Kiplinger’s Personal Finance magazine and The Chronicle of Higher Education. At The Chronicle, he wrote about federal policy and covered higher education issues in the 2012 elections. Michael grew up in Belmont, Mass. and graduated from Cornell University, where he was managing editor of The Cornell Daily Sun.

Follow him on Twitter: twitter.com/mstratford.

Back to Top