June 14, 2014

WHY NOT JUST PAY IT OFF?:

Escaping the Student-Debt Trap : An economist-entrepreneur inspired by equal parts Milton Friedman and David Bowie says income-share agreements could rescue higher education. (KATE BACHELDER, June 13, 2014, WSJ)

Student debt in the U.S. now tops $1.2 trillion, spread among 37 million borrowers, 5.4 million of whom have already defaulted. Washington took notice this week, rolling out the usual non-solutions: On Monday, President Obama expanded a federal program that allows students to repay debt based on what they earn, eventually forgiving the balance. Taxpayers pay the rest. On Wednesday, Sen. Elizabeth Warren's idea to tax millionaires to pay for broad student-loan refinancing stalled in the Senate.

But there's one way to slow student-loan debt that didn't make Washington's agenda. What if a tool could help any student pay for college without a loan or government subsidy? If that sounds impossible, ask Miguel Palacios, assistant professor of finance at Vanderbilt University's Owen School of Management. He's the creative force behind income-share agreements.

That's less than we spent on the 2009 stimulus and, unlike that program, relieving the debt would actually have a stimulative effect.
Posted by at June 14, 2014 8:18 AM
  
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