The Congressional Budget Office has released projections for the Department of Education’s profits over the coming decade. The U.S. Department of Education is expected to generate $127 in profit on loans to students and their families. About three quarters of that profit is expected to come from graduate students, despite the fact that students pursuing advanced degrees make up a smaller portion of the lending market.
Loans to undergraduates and their families are less profitable than those to graduate students, partially because grants and subsidies make funding easier. But does the government have a responsibility to keep advanced degree programs more affordable?
Should taxpayers help foot the bill for grad students, who make up a much smaller percent of the population and frequently go on to earn more than enough to pay back their loans?
Should the private sector fund graduate education on its own through an independent borrowing program or in-program subsidies? Do students seeking advanced degrees deserve the same amount of government support as undergrads -- is it fair for the government to profit on these loans? And as advanced degrees become more commonplace (or even necessary), how will the government adapt?
Justin Draeger, President and CEO of the National Association of Student Financial Aid Administrators (NASFAA)
Neal P. McCluskey, Ph.D., Associate Director, Center for Educational Freedom, Cato Institute