Negative Impacts of Federal Student Loans and Grants
13 Pages Posted: 18 Mar 2020
Date Written: February 20, 2020
Federal involvement in higher education via Federal student loans and grants has raised the overall cost of education, reduced the value of higher education and diminished the quality of education. It has increased the supply of students, causing institutions to spend great effort in recruiting students and making compromises in terms of quality in order to accommodate them. Finally, it has created an oversupply of degree-holders in fields the market did not value highly, to begin with, further devaluing the worth of higher education to the degree-holder; particularly in light of the long term cost of repaying loans relative to the employability and earnings potential.
Keywords: Student loans, education
JEL Classification: H52
Suggested Citation: Suggested Citation