Obama: Cut college costs

President Obama met with college leaders to discuss ways to cut college costs.

Colleges will keep raising tuition as long as federal loans make it easy for students and parents to borrow, a higher education analyst concludes.

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  1. If I were setting the policy, I would require colleges to buy insurance for guaranteed student loans (something similar to the way banks insure savings through the FDIC), and set premiums based upon default rates and amounts. Even assuming such a program covers only part of the cost of defaults, it’s only fair that taxpayers don’t get stuck with the full bill from defaults, and that institutions of higher learning bear some responsibility if their graduates are significantly above average in their rate of default.