Student-Loan Forgiveness Programs Encourage Borrowers to Take On More Debt, Report Says

By Andy Thomason. Report: “Zero Marginal Cost: Measuring Subsidies for Graduate Education in the Public Service Loan Forgiveness Program”
Organization: New America Foundation
Authors: Jason Delisle, director of the foundation’s federal education budget project, and Alexander Holt, a policy analyst
Summary: The report examines the effects of two federal student-loan programs: income-based repayment, which allows borrowers to cap monthly payments at 10 percent of their annual income and have their debt forgiven after 20 years; and the Public Service Loan Forgiveness (PSLF) program, which allows borrowers working in the nonprofit sector to have their debt forgiven after 10 years. More...