State-backed child savings scheme in US would tackle debt and inequality, says study
Topic : Education News
State-backed child savings accounts should be introduced in the US to help pay poorer students’ tuition fees because soaring debt levels are deepening social inequality, a new study says.
In the latest suggestion for a radical break from the federal borrowing model to fund higher education, academics at the University of Kansas argue for a new “asset-based” financial aid system to encourage families to save for their children’s college educations.
It comes as US states increasingly consider alternatives to help fund students’ higher education, such as Oregon legislators’ approval of a pilot scheme that is similar to a graduate tax.
In the study, titled Student Loans are Widening the Wealth Gap: Time to Focus on Equity, William Elliott and Melinda Lewis from Kansas’ School of Social Welfare say that the creation of savings schemes, in which private contributions are matched by the state, would allow graduates to escape higher education relatively debt-free.
Not only would this initiative cut overall student debt levels – currently about $1.1 trillion (£600 million) – but it would help to address social inequality exacerbated by heavy student indebtedness.
Read the full article: Times Higher Education