By Allison Hiltz
Last week, a small bipartisan group of experienced state legislators, legislative staff and executive branch officials met in Washington, D.C., to discuss student loan debt and repayment.
The meeting focused on the challenges, existing policies, proposals and reforms across all levels of government.
This included the use of tax expenditures to offset costs of student debt, initiatives that facilitate loan refinancing, and alternative financing mechanisms, such as Income Share Agreements (ISAs), which is a “new form of private financial aid that offers students money upfront to pay for college in return for a percentage of students’ future earnings,” according to American Institutes for Research. Other topics covered included financial literacy and enhanced consumer protection.
The meeting offered members from different branches of government the opportunity to come together to tackle a common challenge. State lawmakers from Arkansas, Connecticut, Georgia, Massachusetts, Minnesota, Nevada, Ohio and Oregon shared their unique challenges and paths to success. Members from the legislative and executive branches also shared the challenges they face, and together they worked to bridge the gap between the branches of government.
The group also heard from experts in field. Rajeev Darolia from the University of Kentucky presented on consumer protection and financial literacy, including asymmetry in power and information, how states can empower regulators to investigate and punish bad actors, and how states can help educate people on taking out and repaying student loans. Audrey Peek from American Institutes for Research was also on hand to discuss the differences between ISAs and income-driven loan repayment. She also spoke about how Purdue University is using ISAs.
The robust discussion was part of the Fiscal Federalism Initiative by The Pew Charitable Trusts. The initiative explores the sensitivity of state budgets to changes in federal spending, how federal regulatory policy impacts states, and the interconnectedness of federal and state tax policies.
Allison Hiltz is a policy associate in the State Policy Research Division.