People like free stuff

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Article Highlights

  • How should students prepare for changing student loan rates? Borrow responsibly.

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  • Warren’s proposal appeals to students because it disguises enormous public subsidies in the nomenclature of “loans.”

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  • What's up with the student loan bonanza? @Rickhess99 weighs in.

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Editor's Note: This piece is part of a debate on the National Journal's Education Experts Blog.

I don’t think there’s much mystery here. People like free stuff—especially when a] they’re told they’re entitled to it, b] it’s thought to be good for both the individual and the community, c] it’s described as a “loan” and not a “handout”, and d] it’s paid for by just sticking the tab on the national credit card. Warren’s proposal appeals to students because it disguises enormous public subsidies in the nomenclature of “loans.” The bonus is that here figures offer up a surface plausibility to those who don’t understand monetary policy or why it’d be insane for the feds to commit to loaning money out at the Federal Reserve’s current rate.

Subsidized, capped variable rates can be readily justified because they reflect a sensible shared burden between taxpayers and borrowers. Students can prepare themselves for changes by doing what all borrowers ought to do anyway—borrow responsibly, keep an eye on their total debt burden, and know the terms on the loans they choose to take.

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About the Author

 

Frederick M.
Hess
  • An educator, political scientist and author, Frederick M. Hess studies K-12 and higher education issues. His books include "Cage-Busting Leadership," "Breakthrough Leadership in the Digital Age," "The Same Thing Over and Over," "Education Unbound," "Common Sense School Reform," "Revolution at the Margins," and "Spinning Wheels." He is also the author of the popular Education Week blog, "Rick Hess Straight Up." Hess's work has appeared in scholarly and popular outlets such as Teachers College Record, Harvard Education Review, Social Science Quarterly, Urban Affairs Review, American Politics Quarterly, The Chronicle of Higher Education, Phi Delta Kappan, Educational Leadership, U.S. News & World Report, National Affairs, the Washington Post, the New York Times, The Wall Street Journal, the Atlantic and National Review. He has edited widely cited volumes on the Common Core, the role of for-profits in education, education philanthropy, school costs and productivity, the impact of education research, and No Child Left Behind.  Hess serves as executive editor of Education Next, as lead faculty member for the Rice Education Entrepreneurship Program, and on the review boards for the Broad Prize in Urban Education and the Broad Prize for Public Charter Schools. He also serves on the boards of directors of the National Association of Charter School Authorizers and 4.0 SCHOOLS. A former high school social studies teacher, he teaches or has taught at the University of Virginia, the University of Pennsylvania, Georgetown University, Rice University and Harvard University. He holds an M.A. and Ph.D. in Government, as well as an M.Ed. in Teaching and Curriculum, from Harvard University.


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