Care Needed in Lending to Students

Publication: The New York Times

Author: Marc Santora


07/22/2008 - When Gov. Eliot Spitzer appointed a high-level commission in May 2007 to assess the state’s public colleges and universities, one of the first items members agreed on was that New York should join some 40 other states to establish a low-cost student loan program.

But as Mr. Spitzer’s successor, Gov. David A. Paterson, promised on Monday to ask the Legislature to create such a program, many critical questions remained about how it would be set up to ensure that it does not encourage unnecessary borrowing or undermine existing federal loan programs.

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Robert Shireman, executive director of the Project on Student Debt, a nonprofit group financed largely by the Pew Charitable Trusts, said one major concern about such programs was that they led students to shift their education financing and graduate deeper in debt.

He said Iowa, Missouri and Pennsylvania had run into problems when those administering the programs sometimes seemed more concerned about expanding their lending operations than about students’ ability to repay the loans. In Iowa, the state attorney general and the Legislature are investigating corruption accusations involving the loan program.

Read the full article Care Needed in Lending to Students on the New York Times' Web site.

Pew is no longer active in this line of work, but for more information, visit the Project on Student Debt Web site or visit the The Project on Student Debt on PewHealth.org.

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