How to Make Student Debt Affordable and Equitable

Abstract

The federal student loan program is needlessly complex, fails to offer an effective safety net for borrowers in financial difficulty, and distributes the largest benefits to borrowers who need them the least. This report proposes a plan to simplify the system by providing all eligible students with a single $50,000 line of credit, with repayments structured as an income-share agreement (ISA). Borrowers would remit a small fraction of their earnings to the government on their income taxes, capped at 1.75 times the amount borrowed and for a maximum term of 25 years.