Secretary of Education Betsy DeVos is sounding the alarm on student debt, calling it “a crisis in higher education.”
“This crisis demands the attention of Congress, the American taxpayer, colleges and universities, parents, and students. In a word, everyone,” DeVos said in her speech at the Federal Student Aid’s Training Conference in Atlanta.
DeVos said while the U.S. higher education system is “the envy of the world,” the federal student loans program “will be in serious jeopardy” if reforms are not made. DeVos suggested important policy changes in the way the government distributes, administers, and manages federal student loans. The Department of Education is calling these changed “NextGen initiatives.”
DeVos highlighted how tuition, fees, and room and board have grown at twice the rate of inflation and almost 2.5 times median income, acknowledging that when the federal government loans more taxpayer money, schools often raise their rates.
As DeVos said, Federal Student Aid’s “portfolio is nearly 10 percent of our nation’s debt.” One NextGen initiative is to increase financial literacy so policies do not entice students into greater debt.
DeVos said her department is rethinking financial aid altogether. She defined this rethinking, “Everyone must question everything to ensure nothing limits students from being prepared for what comes next.”
DeVos said the FSA’s services should be “on par with those of world-class financial firms and world-class customer experiences” and that the federal government “must become a more responsible lender.”
