Student loans paid off in case college doesn’t quite work out? Sounds like a great idea to me! Not everyone who enters college is prepared to do the work. Dropout rates and the student loan debt that dropouts carry is alarming, and, along with credit cards, high on the list of reasons why this era is called “Generation Debt”. Satyajit Chaterjee, a senior economist at the Federal Reserve Bank of Philadelphia and professor of economics at Colgate University has prepared and proposed an insurance model that would increase graduation success, but would also partially reimburse 10-45 percent of college expenses if a chosen degree program was not completed. The low coverage is meant to foster smart decision making.
Though the proposal has not yet moved beyond the hypothetical stage, the option could very well become a reality in the future.
Would you make the investment in dropout insurance?