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?

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  • heck yes!!! They need insurance for college debt completion. Not just when we drop out. I may not be able to pay off my school loans right now.

  • what about the people who actually finish school with a degree and don’t find a job in their field? I think students should be smart enough, whether you graduate or not. I graduated from college and have to pay my debt. should I be punished because school actually worked out for me??

  • MJC

    I’m not sure if this is the answer. I’ve got to look for more details on this proposal. However, I know something has got to be done. Higher Ed is getting so expensive that I am terrified at the cost by the time my kids are old enough to go. College used to be a priviledge and people either had family that could pay or they would work there way through. But nowawdays who could work their way through a $20K+/year college education except for maybe a rich kid, stripper or drug dealer?

    Loans are great but what’s the point if you’re coming out of college with over $150K worth of student loan debt during a time when unemployment is so rampant? Maybe this economist should uncover a way to lower tuition rates for certain schools to address the problem at its root.

  • Tiffy

    how about free college?? I know it was hell trying to get the health care bill passed so free college probably wont happen but my stepdad is from Germany and went to college for free I think if you past the proper tests and do well in school people in America should be able to go to state colleges for free