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Our higher education system is broken. Families pay a fortune for degrees that do not pay off like they used to. However you feel about the future of advanced degrees, they’re certainly a mispriced asset — a mispricing that started in the market for student loans.
The biggest distortions are in graduate degrees, where students have the largest debt burdens. They represent 25% of borrowers, but account for half of all loans. The government has been the dominant lender here, but the Trump administration is scaling back significantly and creating an opening for private players. This will make graduate education more expensive as students are forced to turn to more costly loans, but that may be a healthy development.
Continue reading the entire piece here at Bloomberg (Paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and a Bloomberg Opinion columnist.