Betsy DeVos, the U.S. secretary of education, warned that the growing $1.5 trillion federal student loan balance is a crisis that demands the attention of Congress, colleges, students and parents.
Her speech was to the annual training conference for the department's office of Federal Student Aid, which manages the student loan portfolio. DeVos said just 24 percent of borrowers currently are paying down both principal and interest on their federal loans. "The student loan program is not only burying students in debt, it is also burying taxpayers and it's stealing from future generations," she said, according to her prepared remarks.
DeVos blamed the Obama administration for contributing to the rapid growth of student borrowing, specifically referencing Obama's 2010 move to end federally backed private lending and his emphasis on four-year college degrees. "The parade of programs, repayment options and complex rules serves no one well," said DeVos. "The government monopoly has proven costly to taxpayers and it hasn't been a panacea for students either."
One prominent conservative expert on student aid, however, disagreed with her attempt to link the switch to direct lending to increased debt levels. Jason Delisle, a resident fellow at the American Enterprise Institute and former Republican staffer on Capitol Hill, in a tweet called DeVos's argument "completely illogical" and "utterly false." Delisle linked to a 2017 paper he said rebutted that myth.
In order to bring student borrowing down to more sustainable levels, DeVos called for more support for a "multitude of pathways" for students, for unleashing innovation and for better, more accessible information about higher education programs.