Parthenon Report Student Financing

THE PARTHENON GROUPBoston • London • Mumbai • San Francisco

rch

2011

Financing Indian Higher Education

Mar

By The Parthenon Group

PREPARED FOR THE EDGE 2011 CONFERENCE

THE PARTHENON GROUPAgenda THE PARTHENON GROUPAgenda

Expanding the Affordability of Tertiary Education

Lessons Learned from Student Financing in the USA

Holes in India’s Current Student Financing System

Conclusions

2

THE PARTHENON GROUP

Education and economic growth are critically intertwined THE PARTHENON GROUPintertwined

1 100%

Tertiary Enrolment Ratio vs. Income, 1980-2008

80

tio

USA

UK

2008

2008

24

40

60

ross

Enr

olm

ent R

at UK1980

3

20G

r

Brazil

India1980

2008

2008

30

0 10,000 20,000 30,000 40,000 50,000 60,000 $70,000

PPP adjusted GDP per Capita

19801980

3Source: World Bank

THE PARTHENON GROUP

Current projected economic growth implies the need to expand tertiary enrolment by 8.9M seats by 2016 THE PARTHENON GROUP2016

30MEnrolment Forecast for Indian Higher Education, 2004–2016F

30M

8.9M 24.9M 8%

('04-'10E)CAGR

8%

('10E-'16F)CAGR

8%

('04-'10E)CAGR

8%

('10E-'16F)CAGR

20

5.8M 16.1M

Stu

dent

s

Unmet Demand

1010.2M

Num

ber o

f

0

HigherEducationEnrolment

02004 Incremental

Enrolment2010E Incremental

Enrolment2016

$2.1K $5.7K$3.6KGDP/Capita(US$ PPP Adjusted)

11.6% 22.3%15.8%Gross Enrolment Ratio

$2.1K $5.7K$3.6KGDP/Capita(US$ PPP Adjusted)

11.6% 22.3%15.8%Gross Enrolment Ratio

4

6% 3%5 8%6% 3%5 8%

Source: MHRD; Global Insight; Parthenon Analysis

THE PARTHENON GROUP

Lowering the affordability threshold is an important component in expanding and equalizing educational access THE PARTHENON GROUPeducational access

Distribution of Household Income

India Brazil USA/UK

ouse

hold

s

As more households are able to afford As India’s income

distribution moves

Per

cent

of H

o

quality tertiary education for their

children, seat capacity in the system plays a

key role to sustain enrollment growth

distribution moves higher, a larger % of

its population can afford tertiary

education

P enrollment growth

Affordability Threshold

Household IncomeStudent financing has the ability to move the affordability threshold

backwards

5

yFor Tertiary Enrolment

THE PARTHENON GROUP

Given lower government appropriations, Indian institutions fund a larger percentage of their operations from tuition than USA institutions THE PARTHENON GROUPoperations from tuition than USA institutions

USA vs. India Government Expenditures O T ti Ed ti % f GDP 2009

Revenue Per Student B S f F d 2008

2.0%

1 7%

On Tertiary Education as % of GDP, 2009

100%

venu

e OtherRevenue

By Source of Funds, 2008

1.5

1.7%

80

Inco

me,

Oth

erR

ev

1.0

40

60

atio

ns,I

nves

tmen

t

Tuition/Fees

Tuition/Fees

0.5

0.3% 20

40

Gov

tApp

ropr

ia

Tuition/Fees

0.0USA India

0USA

Tuition/Fees

India

Fees

USA India

Public Sector Private Sector

6Note: Indian tuition data is for engineering courses (BTech)Source: NCES; BEA; Parthenon Survey of Higher Education Institutions in India; UNESCO

Public Sector Private Sector

THE PARTHENON GROUP

Today, tertiary education is less affordable in India than in the USA for every income bracket THE PARTHENON GROUPthan in the USA for every income bracket

Average College Tuition as % of Household Income

100%

g gby Income Quintile, USA vs. India, 2009

60

80 In the US, tuition represents only 5% of top quintile

households income, while in India tuition represents 11%

of top quintile household

40

60 of top quintile household income

20

0Income Quintile 5

(Highest)

IndiaUSA

Income Quintile 4 Income Quintile 3 Income Quintile 2 Income Quintile 1(Lowest)

7Source: U.S. Census Bureau; NCES; BLS; NSS

THE PARTHENON GROUP

Broad financing options in the USA help facilitate tertiary education access for low income students THE PARTHENON GROUPtertiary education access for low income students

USA and India Adult Population with Higher Education, by Income Quintile, 2008

100%

84% Indian Adult Population

USA Adult Population withHigher Education

Education, by Income Quintile, 2008

60

80

67%

60%

Indian Adult Populationwith Higher Education

40

60

46% 45%

20 17%

0Income Quintile 5

(Highest)Income Quintile 4

4%

Income Quintile 3

2%

Income Quintile 2

1%

Income Quintile 1(Lowest)

1%

8Source: U.S. Census Bureau; NCES; BLS; NSS

THE PARTHENON GROUP

Indian students primarily rely on family funds to pay for education, implying that many low-income students cannot afford to attend college THE PARTHENON GROUPstudents cannot afford to attend college

Indian Student Survey Responses: Source of Financing for Higher Education

100%

Self (savings)

Scholarship & Other FundingScholarship &Other Funding

80

No

Loans

40

60

Parents/FamilySelf (savings)

Self (job)

20

40

Parents/Family

57% Out Of PocketEven those students who took out loans financed 57% of the total cost with family

0Did Not Take Out a Loan Did You Take Out a Loan?

Yes

Took Out a Loan

money, savings, and job-related income

9Source: Parthenon student survey (N=205)

THE PARTHENON GROUP

Three broad options are available to increase access to tertiary education in India THE PARTHENON GROUPaccess to tertiary education in India

Use Capital Marketst F d C it E i

Subsidize Studentst I Aff d bilit

Subsidize Institutionst I Aff d bilitto Fund Capacity Expansion

• Facilitate private investment in tertiary education in order to increase capacity; this will help

to Increase Affordabilityto Increase Affordability

• Provide direct financial support to institutions so that students can pay tuition that is less than the cost of

• Provide aid directly to students in the form of loans and/or grants to attend an institution of their p y p

balance demand and supply

Brazil

• In 1996, Brazil deregulated its

education

UK and USA

• The UK provides significant funding

choosing

USA

• The USA provides students withIn 1996, Brazil deregulated its tertiary education system and opened its doors to private investment. As a result of this action, tertiary enrolment has grown three fold since 1997 (2M

The UK provides significant funding to institutions and limits the tuition they can charge students to a small % of the cost of education. The government is currently considering alternatives to this system due to its

The USA provides students with extensive financial aid options. These options include grants (mostly directed toward low-income students), and government-backed loans (available to all students)grown three-fold since 1997 (2M

to 6M)alternatives to this system due to its large burden on taxpayers

• The USA provides funding to many institutions in order to subsidize the tuition they charge students but

loans (available to all students). These funds make up a significant portion of overall tuition

tuition they charge students, but schools are free to set their own tuition levels

10

Potential Effective Option for India (in combination with private investment)

Requires Significant Government Expenditures

Discussed at 2010 EDGE Conference

Source: World Bank





Conclusions

11

THE PARTHENON GROUP

There have been three significant periods of tertiary enrolment growth in the USA since 1955 THE PARTHENON GROUPenrolment growth in the USA since 1955

Total USA Tertiary Enrolment by Control of Institution, 1955-2008

20

25M

('95-'08)CAGR

Student Financing Reform(1955-1975)

CAGR = 7.5%

Capacity Expansion(1975-1995)

CAGR = 1.2%

Capacity Utilization(1995-2008)

CAGR = 2.3%

15

nrol

men

t

Private Sector

IndependentSector

15%( 95 08)

1965: Higher Ed Act of 1965 –authorized many of today’s student financial aid programs, including the Educational Opportunity Grant

10

Tota

l Fal

l E

Public Sector

ducat o a Oppo tu ty G a tProgram (Pell Grants) and the Guaranteed Student Loan Program (Stafford Loans)

0

5

01955 1961 1965 1970 1975 1980 1985 1990 1995 2000 2005 2008

2% 3% 6% 8%0% 0% 0% 0% 0% 1% 2% 2%% Private

1.5% 1.5% 1.7% 1.7%0.4% 0.7% 0.9% 1.4% 1.5% 1.5% 1.4% 1.5%Gov't Spending on Tertiary Ed

12

yas % of GDP

Source: NCES; World Bank

THE PARTHENON GROUP

There have been three significant periods of tertiary enrolment growth in the USA since 1955 (continued) THE PARTHENON GROUP(continued)

Student Financing Reform(1955-1975)

CAGR = 7.5%

Capacity Utilization(1995-2008)

CAGR = 2.3%

Capacity Expansion(1975-1995)

CAGR = 1.2%

3%

Supply/Demand Illustrative Example

3%

USA Enrolment Growth vs. Growth in Number of Institutions, 1975-1995

USA Enrolment Growth vs. Growth in Number of Institutions, 1995-2008

2

2.3%Supply

2

Gov’t Subsidy

10.8%

New Demand

Pric

e S

choo

ls

Rec

eive

Pric

e S

tude

nts

Pay

1Average

1.4%1.2%

0Number of Institutions

AverageAnnualGrowth

Enrolment

Demand

New E ilib i

0Number of Institutions

gAnnualGrowth

Enrolment

Increase in enrolment

• GI Bill and similar government financial aid programs stimulated demand in the USA by lowering the effective price of education

Equilibrium Quantity

• Significant investment in the private sector to expand capacity and build scale

• Enrolment growth in the private sector continues its strong trend as the investment in capacity pays off

13

effective price of education

Source: NCES

THE PARTHENON GROUP

The development of a student financing system and investment in the private sector helped expand tertiary education access in the USA THE PARTHENON GROUPtertiary education access in the USA

USA Higher Education Enrolment USA Higher Education Enrolment

15%15%

4%

gGrowth by Income Quintile, 1995-2008

gGrowth by Institution Type, 1995-2008

10 GR

3

3.3%3.4%

Total 10

men

t Gro

wth

CAG

2

2.2%

1.7%

EnrolmentGrowth

5

Enro

lm

2% 2%

TotalEnrolmentGrowth

1

Gro

wth

CAG

R

1.4%

0Private Sector Public

Sector

2%

IndependentSector

2%

0Income

Quintile 5 (Highest)

Enr

olm

ent

Income Quintile 4

Income Quintile 3

Income Quintile 2

Income Quintile 1 (Lowest)

14

51% 28% 23%Low-incomeStudents %

( g ) ( )

Note: Low-income students represented as students below 150% of the federal poverty level Source: NCES

THE PARTHENON GROUP

Student loans are now a ubiquitous part of the tuition landscape in the USA THE PARTHENON GROUPtuition landscape in the USA

Components of Total Student Cost of Attendance by Institution Type in the USA, 2007-2008(Direct government subsidies not depicted)

$40K

$37K

30

Out-of-Pocket / Other

$28K


Other Financial Aid

20

Grants

Private Loans

Other Financial AidGrants


$19K

10

Private Loans

Federal-backed Loans

Private Loans


Grants

Private Loans

0Private Sector 4-Year Colleges Independent 4-Year Colleges Public Sector 4-Year Colleges


92% 65% 53%% Undergradwith Loans

15

with Loans

60% 36% 33%% FinancedThrough Loans

Source: BMO Capital Markets Education & Training Report, 2010

THE PARTHENON GROUP

Broad student financing, however, is not without its critics who have legitimate concerns THE PARTHENON GROUPcritics who have legitimate concerns

Tuition Prices• Providing students with greater access to funding has allowed schools to

increase tuition as a means of keeping up with rising education costs andTuition Prices increase tuition as a means of keeping up with rising education costs and students’ willingness to pay. Since 1980, real tuition levels in the USA have more than tripled.

Quality Concerns• Greater government funding, in addition to an influx of private investment, has

helped f el concerns that some schools are moti ated more b profits than bQuality Concerns helped fuel concerns that some schools are motivated more by profits than by student outcomes.

Role of • To deter this misalignment of incentives, the USA government has implemented

regulations to protect students and the industry (e g cohort default rates 90/10Oversight

regulations to protect students and the industry (e.g. cohort default rates, 90/10 rule). These rules limit which schools’ students are eligible to receive government funding and create extra compliance costs for institutions. They also make educational institutions partly responsible for their students’ repayment behavior by penalizing schools with a high percentage of students who default

16Source: Commonfund Institute 2009 HEPI Report

behavior, by penalizing schools with a high percentage of students who default on student loans.





Conclusions

17

THE PARTHENON GROUP

Key factors for a successful student financing system THE PARTHENON GROUPsystem

Demand for Student Loans Supply of Student LoansDemand for Student Loans Supply of Student Loans

• Need – A sufficient number of students in need of funding for school

• Availability of Capital – An adequate supply of funds is available to meet the

• Wide Scale Availability – Loans are not limited to a sub-segment of the market; anyone can apply for these loans and approval rates are independent of

demand from students

• Recourse – Sufficient recourse in the event of non-payment so that it is difficult to get out of the obligation

program or degree type

• Awareness – Students are aware of their funding options, how to apply, and what to expect

• Government Backing – Loans are backed by the government to increase attractiveness to lenders by reducing risk

C titi M k t N li it ti

Successful Student

Financing S t

• Consumer Protection – Regulations help standardize student loans and protect the student; this ensures students trust the system

• Competitive Market – No limitation on entry to or exit from the market, or any other constraint on competition; this ensures students get the best possible deal

System

y

• Ease – Students can easily apply for these loans and no collateral is required

• Infrastructure – Data systems make it easy to track and process a high volume of student loans

18

THE PARTHENON GROUP

There are significant issues with the current student financing system in India THE PARTHENON GROUPstudent financing system in India

Percentage of Students Taking Out Student Loans, USA vs. India

Q: What is the primary reason why students (in general) do not take out student loans?

100% Other

Not AwareLoans AreAvailable

100%

Students NotCommentary

from the Banks

60

80

Do Not Need toTake Out Loan

Available

ComplicatedProcess/

Challenging toAccess60

80 Taking OutLoans forEducation

Students Not

• “Despite our best intentions, we have to be quite selective who we give the loans to because of the inherent risk. C tl it i hi h d

40

Access

40Students

Taking OutLoans forEducation

Currently it is our higher-end customers who benefit the most from student loans.” Private Bank official

20

Need to TakeOut Loan

UnfavorableLoan Terms

20

Taking OutLoans forEducation

0Overall Reasons For Not

Taking Loan

0U.S. India

Students Taking OutLoans for Education

19Source: Parthenon student survey (N=205); IBA; BMO Capital Markets Education & Training Report, 2010; Parthenon Analysis

Awareness, complexity of the application process , and loan terms are significant hurdles in India

THE PARTHENON GROUP

A significant percentage of students in India are unaware of student loan availability THE PARTHENON GROUPunaware of student loan availability

100%

Q: When you started at university, were you aware that you could access a student loan?

• “I figured that students in my program would not be eligible for these loans. I wish someone had told me about

Commentary from Students

80

I wish someone had told me about this option earlier.” – BCom Student, a private university in Southern India

• “These loans are typically available

60 Yes

y yonly to students who have close family ties to a bank, which excludes me.” – BBA Student, a college in Northern India

20

40• “Banks should advertise at colleges.

That is the only way students find out about the availability of loans.” – PGDM Student, a private college in W t I di

0Awareness of Loan Availability

No

Western India

20Source: Parthenon student survey (N=205); MHRD; Global Insight; Parthenon Analysis

THE PARTHENON GROUP

Lack of standardization makes the loan application process complex, long, and difficult THE PARTHENON GROUPprocess complex, long, and difficult

Excessive Paperwork

Excessive Loan Processing Time

Lack of Coordination Between Partiesp g

• “The paperwork required to process the loan should be reduced and it should be a more user-friendly process

• “The application process should be easy and transparent. It took me a long time to confirm that I would

• “It would be great to get the information about student loans from the university prospectus. Currently banksmore user friendly process

for both students and family.” MBA Student, a private university in Northern India

• “Repayment should be made

time to confirm that I would be getting a loan. During those weeks of waiting, I could not confirm to the university that I would be able to enroll in the course ”

prospectus. Currently banks and universities are generally not connected at all”. BTech Student, an engineering college in Western India

simpler and the paperwork required to apply should be minimal...” BCom Student, a college in Northern India

“It ld b i t

to enroll in the course. BTech Student, private university in Southern India

• “The student loan process should be made easy. The

• “Loans should be made available to a wider variety of courses that students take. Now only students from certain streams can avail the• “It would be very convenient

if the loan application process could be streamlined and if a list of all papers required was made known to the student at

should be made easy. The process should be quicker and banks should not stall if they are not willing to give a loan, as the case has been with some of my close

certain streams can avail the loan facility. Universities should be more proactive in making loans available for all kinds of courses.” BBA Student a private universitythe beginning of the process.

Often people have to go back to the bank multiple times to submit each and every paper ” MBA Student a

with some of my close relatives.” BTech Student, an engineering college in Northern India

Student, a private university in Northern India

21

paper. MBA Student, a private university in Southern India

Source: Parthenon student survey (N=205)

THE PARTHENON GROUP

Current terms make student loans inaccessible to low-income students and less valuable to any student THE PARTHENON GROUP

Average Student Loan Interest Rate Spreads Over Government Bond Yields, 2010

student

• “There’s a high mobility level of

Commentary from the Banks

5

6%There s a high mobility level of

students, including those who study abroad. Right now we target premium existing clients because it’s less risky. It’s difficult to find the right clients. The biggest challenge with

5.6%5.2%

4

clients. The biggest challenge with education loans is tracking loan payments.” – Private Bank official

• “Our biggest challenge is a growing 3.6%

4.2%

2

3

gg g g gnumber of non-performing assets, especially among the smaller (under Rs 4 Lakh category) of loans. Because these smaller loans are uncollateralized, students are more

1

likely to default.” Private Bank official

1.3%

0.3%Aligning Incentives

0USA Federal Student Loans

USA Private Student Loans

India

7% 3.5% 16 - 17%Avg Default RateAvg Repayment

0.3%• The U.S. government was able to

lower default rates on student loans throughout the 1990’s by making educational institutions partly responsible for the repayment

22

10-30 years 5-20 years 2-7 yearsAvg RepaymentPeriod

Note: Gov’t bond yields are based on 10 year bondsSource: Indian Banks Association; Reserve Bank of India; DOE; Finaid.org

responsible for the repayment behavior of their students.

THE PARTHENON GROUP

India still faces significant challenges in satisfying the key demand criteria needed for an efficient student financing system THE PARTHENON GROUPstudent financing system

Demand Factor USA Performance India DescriptionDemand Factor USA Performance Performance Description

Need Given the low tertiary gross enrolment ratio in India and the low income levels, there is a great need for student financing in India.

Wide Scale Availability Banks claim not to give preference to students from certain economic backgrounds, however in reality loan availability is skewed toward students from wealthier families. Additionally, loans are available only for professional coursesprofessional courses.

Awareness ~20% of current students are not aware that student loans are available to them. Additionally, many students are unaware of the recourse associated with defaulting on loans.g

Consumer Protection Student loans provided by banks have nominally standardized terms and conditions. Execution of these norms varies widely in reality.

Ease Students have to shop for a loan directly with banks, the applications are very long, and collateral is often required. The process is complex, cumbersome, and not standardized.

23

THE PARTHENON GROUP

India also faces significant challenges in satisfying the key supply criteria THE PARTHENON GROUP

Supply Factor USA Performance India P f Description

the key supply criteria

Supply Factor USA Performance Performance Description

Availability of Capital Student loans account for a small share of banks’ loan portfolios and banks are willing to grow that share going forward.

Recourse Population-tracking systems in India are not well-developed. A loan default is recorded in CIBIL and theoretically influences the student’s future potential to take out additional loans. However, this link is often missed due to the lack of a unique identificationmissed due to the lack of a unique identification number.

Government Backing Student loans are not backed by the government.

Competitive Market In India, participation of private banks in the student loan market is still very low.

Infrastructure The data systems currently in place to track borrowerInfrastructure The data systems currently in place to track borrower information are underdeveloped. Banks cannot always track students over the entire course of the loan, which limits potential recourse.

24





Conclusions

25

THE PARTHENON GROUP

Multiple stakeholders play critical roles in improving India’s student financing system THE PARTHENON GROUPimproving India s student financing system

Banks

• Create streamlined student loan applicationsCreate streamlined student loan applications so that potential applicants are not scared off by the complexity of the process and/or the time required to apply

• Work with educational institutions to create a

Ed ti l I tit ti

better flow of information so that borrowers can be tracked over the course of their education and post-graduation

G t Educational Institutions

• Work with banks to make the loan application process more closely aligned with the school application process

Government

• Create a better information infrastructure (e.g. unique identification numbers) so that individuals can easily be tracked over time

Efficient Student

Financing System

• Improve back-end data systems in order to provide banks with accurate student data

• Focus on improving student awareness of student loans and the benefits/drawbacks

• Facilitate the flow of private capital into the country by creating a competitive market for lenders

• Regulate the criteria banks can use to student loans, and the benefits/drawbacks associated with these loans

• Regulate the criteria banks can use to approve/deny a student loan in order to ensure certain students are not discriminated against

• By creating rules that penalize educational institutions with a high percentage of students

26

g gwho default on loans, institutions will have an incentive to educate students on the dangers of default

THE PARTHENON GROUPAppendix THE PARTHENON GROUPAppendix

27

THE PARTHENON GROUPUSA performance on demand factors THE PARTHENON GROUPUSA performance on demand factors

Demand Factor USA Performance Description of USA PerformanceDemand Factor USA Performance Description of USA Performance

Need Average post-secondary tuition, room and board is ~$17K per year, while the median disposable income per capita is ~$33K. With a gross enrolment ratio near 80%, a significant number of students in the USA need fundingthe USA need funding.

Wide Scale Availability Student funding is available to all citizens regardless of sex, age, type of degree pursued, or type of institution attended.

Awareness Most prospective students are aware of the availability of student funding. Those that are not aware typically find out when they apply to school. Most students are also aware of the recourse associated with defaulting on a loan.

Consumer Protection Government-backed student loans have standardized terms and protections. Private student loans are not standardized and do not offer the same protections as federal loans. However, laws such as the Truth in Lending Act are in place to protect consumers against predatory lending.

Ease Many students only need to fill out a short, standardized form (FAFSA) to be eligible for student funding, after which the student’s institution will typically take care of coordinating the loan with the

28

yp y glender.

THE PARTHENON GROUPUSA performance on supply factors THE PARTHENON GROUPUSA performance on supply factors

Supply Factor USA Performance Description of USA Performance

Availability of Capital With the exception of the credit crunch in 2008 and 2009, there is almost always funding available for student loans. One of the factors responsible for this availability of capital has been lenders’ ability to securitize student loans.

Recourse There is a well-established credit market in the USA that penalizes students for defaulting on student loans. Those who default have a very difficult time getting any other type of loan until the loan is paid off.

Government Backing The majority of student loans are backed by the government, which prevents the need for collateral or a cosigner. Private student loans are not backed by the government and so a cosigner is often required.

Competitive Market Lenders are free to enter and exit the USA private student loan market. They can set their own loan terms, but they must abide by certain consumer protection regulations that prohibit terms that are considered “predatory”. Only certain lenders are certified to originate/service federal student loans and more recently the USAoriginate/service federal student loans, and more recently the USA government has begun issuing these loans directly to students, cutting out the middleman.

Infrastructure Social security numbers exist as unique identifiers for all USA citizens. Lenders, educational institutions, and the government can

29

use these numbers to freely share information about students and to track students over time.

THE PARTHENON GROUP

The USA implemented several regulations to better align schools’ incentives with student outcomes THE PARTHENON GROUPalign schools incentives with student outcomes

Summary of Recent Regulatory Activity in the USA

Cohort Default Rates 90/10 Rule Gainful Employment(Pending Regulation)

FFEL Loans and Direct Lending Programs

• Established maximum • Requires institutions to • Pending regulation to • The government began

crip

tion

Established maximum threshold for cohort default rates (CDRs) on student loans

– 25% for 3 consecutive 40% f 1

Requires institutions to generate at least 10% of their revenue from non-federal funding sources

• Institutions whose 90/10 t i d 90% i k

Pending regulation to establish a maximum debt-to-income ratio for graduates on a programmatic basis

I tit ti th t

The government began transitioning student loans to direct lending only (and elimination of FFEL program), despite evidence of the effectiveness of

Des

c years or 40% for 1 year

• Institutions whose CDRs exceed these limits loose federal funding

metric exceeds 90% risk loosing federal funding

• Institutions or programs that exceed the ceiling would suffer the loss of federal funding

o t e e ect e ess oFederal loans with intermediaries in producing repayment

onal

e

• High default rates indicate a low-quality institution that is not delivering on its promise of quality job placement

• Students with “skin in the game” are more discerning consumers and thus ensure quality through their

• The USA Department of Education would be able to prevent institutions from preying on students and

• Eliminating the “middleman” (third party loan providers) will save taxpayers $4B a year, which the government

Rat

i selection of a particular institution

saddling them with debt by establishing “debt caps”

can reinvest in aid to students

30Source: US ED; New America Foundation; Library of Congress; Career Education Review; CCA; NASFAA; NAICU; FinAid; Career College Central; Chronicle of Higher Education; Inside Higher Ed; Deutsche Bank; William Blair

Business

Parthenon Report Student Financing