Pew Charitable Trusts Announces Renewed Investment to Reduce Burden of Student Debt
At a time when rising student loan debt is increasingly recognized as a significant social and economic challenge, The Pew Charitable Trusts announced today an expansion of its work to advance nonpartisan policy solutions that would help reduce the burden of loan debt for American students and their families.
Through a $3 million grant to the Student Debt Initiative at The Institute for College Access and Success (TICAS), Pew will help raise awareness of practical policies that would benefit millions of students and families. The grant is part of a series of Pew-funded initiatives designed to promote the financial security of American families. It matches a previous investment in student debt reforms Pew made in 2005.
"Education is crucial to the future of our young people and the nation's economic competitiveness, yet record student debt levels are creating financial straightjackets for many college grads and dissuading others from pursuing college at all," said Rebecca W. Rimel, president and CEO of The Pew Charitable Trusts. "While manageable debt can be a wise strategy to pay for college, burdensome debt can make it impossible for young people to pursue vital public interest fields like teaching or nursing and jeopardize their future financial security. Pew seeks to engage the American public and opinion leaders to embrace practical solutions that can reduce the growing burden of student debt."
The initiative will pursue a number of policy priorities, including helping to:
- Reform student loan repayment policies that are ineffective, inequitable and, in some cases, counterproductive, so that borrowers have clear and reasonable protections from punitive payment requirements and decades of unending debt;
- Ensure proactive education and counseling so students can make informed choices about how much to borrow and how to manage their debt;
- Highlight policy inefficiencies that, if corrected, would produce savings that could help reduce the burden of student debt; and
- Simplify the federal financial aid application process so that more students receive the aid for which they qualify, encouraging college participation while reducing the need to borrow.
"These reforms are in the long-term interest of students, families, and the American economy," said Robert Shireman, president of TICAS and executive director of the Project on Student Debt.
"By ensuring that student loans help, rather than hurt, responsible borrowers, we can expand educational opportunity, encourage families to save for the future, and get a better return on taxpayers' investment in financial aid," he added.
Federal student loans remain a sound investment and key part of ensuring access to American higher education. College graduates on average earn one million dollars more over their lifetime than high school graduates. Yet there are negative consequences to the nation's increasing reliance on student loans. Some students, especially lower income students, forego college altogether to avoid going into debt, or work so many hours that they hurt their chances of graduation. For those who do borrow, student debts upon graduation can deter them from buying a house or starting a family, saving for a child's education or for retirement, or pursuing public interest careers such as teaching or social work.
TICAS is an independent, nonprofit organization founded to improve educational achievement and expand opportunity by promoting research-based policies and responsible stewardship of tax dollars. In its student debt work, TICAS partners with diverse organizations such as the American Enterprise Institute for Public Policy Research and the Student Public Interest Research Groups.
The Pew Charitable Trusts serves the public interest by providing information, advancing policy solutions and supporting civic life. Based in Philadelphia, with an office in Washington, D.C., the Trusts will invest $248 million in fiscal year 2007 to provide organizations and citizens with fact-based research and practical solutions for challenging issues.