Abstract

This chapter provides an economic perspective on policy issues related to student debt in the United States. It lays out the economic rationale for government provision of student loans and summarizes time trends in student borrowing. It describes the structure of the US loan market, which is a joint venture of the public and private sectors and then turns to three topics that are central to the policy discussion of student loans: whether there is a student debt crisis, the costs and benefits of interest subsidies, and the suitability of an income-based repayment system for student loans in the US. It discusses the gaps in the data required to fully analyze and steer student-loan policy.