UW–Madison’s Nick Hillman is quoted in an article from MarketWatch reporting on the small number of student-loan borrowers who have been able to access student-debt cancellation through government-run, income-driven repayment plans.
Hillman is an associate professor in the School of Education’s Department of Educational Leadership and Policy Analysis.
The article includes results from an analysis of student-loan borrower data published by the National Consumer Law Center and the Student Borrower Protection Center, which assessed borrowers’ experiences accessing loan cancellation through these plans.
The plans “allow borrowers to repay their debt as a percentage of their income, instead of as a standard monthly payment related to the size of the loan and the interest rate,” the article explains.
Borrowers are then eligible to have their loan balance discharged after 20 or 25 years.
However, the analysis found that only 32 people have had their debt cancelled through an income-driven repayment plan, though two million federal student-loan borrowers have been repaying their debt for at least 20 years.
Hillman said he didn’t really know how to judge these results.
“You’re working with a small number of people in the first place who were in (these programs),” Hillman explained.
“A lot can happen in your life in 25 years; to whittle it down to 32 at the end, 32 people who must have stuck with that bureaucratic mess over this period of time, in some ways that’s not at all surprising because it’s a gauntlet,” he said.
Hillman said one of his concerns about income-driven repayment and its role in the student-loan program is “the burden it places on the individual to be successful in financing their education and repaying their debt.”
“It galvanizes this idea of education being a private good, it basically seals that envelope for us, when we say that loans should be based on future earnings,” he said. “It really helps us overlook the great need for public investment to prevent borrowing in the first place.”
Read the full article at marketwatch.com, here.