This report is a follow-up to our organizations’ joint 2023 report that introduced five foundational pillars needed to address crucial issues in federal graduate financing: (1) setting reasonable loan limits, (2) providing targeted grant aid to students and institutions, (3) ensuring sufficient value and return on investment for students and taxpayers, (4) enhancing the regulatory structure and consumer protections for private lending, and (5) improving data disclosure and transparency.
This report further examines key issues and questions raised in our initial report and explores the breadth of specific policies that could achieve what is needed in each pillar. These policies need to be thoughtfully balanced across the pillars. For instance, binding loan limits would have serious implications for access, which should be addressed with targeted increases in grant funding. At the same time, constraints on federal lending would likely spur growth in private education lending, which should be met with appropriate reforms to the regulations that protect borrowers from usurious terms. We offer these policies as examples of potential approaches, but we are not specifically recommending them—nor do we believe that the following is a comprehensive list of possibilities.
This report is a collaboration between the American Enterprise Institute, Education Counsel, and The Century Foundation. To read the full report of policy options, download this PDF.
