Trump and Democrats align more closely on student debt than they think

July 18, 2019

Source: Link

By Sheila Bair (Original source Yahoo Finance)

‘“A rose by any other name would smell as sweet” cooed Juliet Capulet to her beloved Romeo Montague, in an oft-quoted expression of how the names of things do not always reflect what they really are.

So it is with income share agreements, or ISAs — a new way to finance college, where students are only obliged to pay an affordable percentage of their income after they graduate, instead of a fixed-debt obligation. While the concept of ISAs seems to have support among Republicans and Democrats, its very name is prompting partisan sword-fighting to match the blood feud between the Montagues and Capulets in Shakespeare’s famed play.

A replacement for America’s disastrous loan system
The main point of contention seems to be around investor-funded ISAs where Democrats like Senator Elizabeth Warren are understandably concerned that Wall Street sharpies will take advantage of vulnerable kids. Republicans, in contrast, like encouraging market-based solutions to rising student debt obligations and think the risk of abuse can be mitigated with appropriate consumer protections. While I tend to think that properly regulated private ISAs have a role in funding college, particularly at the graduate level, their greater value lies as a government program to replace our disastrous federal student loan system.”

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