‘A different kind of moral hazard’: The history and politics behind the Evergrande debt crisis

Many factors, including high tuition costs, are contributing to the nation’s student loan challenge, but over the past several years, evidence has indicated that the experience of repaying student loans — one which FSA has a role in — is likely exacerbating the problem, as borrowers struggle to access the cheapest repayment plans available to them and the benefits they’re entitled to. Just this week, Politico reported that thousands of teachers had been rejected from a loan forgiveness program for public servants.  

“Some of the tools that exist to ensure that people have better access to protections, access to pathways to forgiveness just aren’t working as well as they could,” said Sarah Sattelmeyer, project director, education, opportunity and mobility at New America, a think tank. 

During the study period, Federal Student Aid’s responsibilities became more complex, but its staffing levels didn’t adjust, the report found. Between fiscal years 2011 and 2013, the agency implemented a new suite of payment plans that allow borrowers to pay back their debt as a percentage of their income and took up agreements with 20 student loan servicers, among other tasks, according to the GAO. But staffing levels didn’t increase. 

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