This presentation addresses ethical considerations in the administration of student loans.

1. The Ethics of Student Loans
Theresa Popp Braun
EDLS 7110
Spring 2014
Dr. Patrick Pauken

2. ASSUMPTIONS
•An educated citizenry is a desired
societal goal - society benefits
•Balance access, cost, student rights &
responsibilities, institutional rights &
responsibilities
•Work In Progress
•All data - US student loans
•Terminology defined

3. HOW MUCH IS ONE TRILLION DOLLARS?
TOTAL U.S. STUDENT LOAN DEBT NOW EXCEEDS
$1,000,000,000,000+
AND INCREASES BY APPROXIMATELY
$3,000 EVERY SECOND

4. Source: Consumer Finance
Protection Bureau and American
Student Assistance, 2013
Average debt
2012 graduate
$29,400
Since 1985 the
cost of higher
education in the
US has risen
500%
Current default
rate is 14.7%

5. WHY IS STUDENT LOAN
DEBT A PROBLEM?
• Limits choice and opportunity for borrowers -
economic, social, additional education
• Negatively impacts economy
• Negatively impacts college accessibility for some
students
• Contributes to the increasing cost of higher education

6. THE$
ETHICS$
$OF$
STUDENT$
LOANS$
CARE
Adapted'from'Starra-,'1991'
JUSTICE
CRITIQUE
PERPETUATION$OF$A$FLAWED$SYSTEM$
WHO$CONTROLS?$$
WHAT$LEGITIMATES?$
WHO$DEFINES?$
BEST$INTEREST$
OF$STUDENTS$
$TO$BE$
$MAXIMIZED$
HOW$
SHALL$WE$
$GOVERN$
$OURSELVES?$
STUDENT$
TRUST,$
QUALITY$OF$
LIFE,$&$
EMPOWERMENT$
WHAT$$
DO$OUR$$
RELATIONSHIPS$$
ASK$$
OF$US?$

7. THE ETHIC OF CRITIQUE
• Social arrangements lack neutrality - the usual structure
benefits some segments of society at the expense of
others (Starratt, 1991)
• Critical Theory - expose which group has the advantage
over others, how this social arrangement came to be, and
how this situation is structured to maintain the legitimacy
of the social arrangement (Adorno, 1973; Habermas,
1973; Horkheimer, 1974; Young, 1990)
• Ethical challenge is to enable those affected to have a
voice in evaluating and changing the arrangement
(Starratt, 1991)

8. THE ETHIC OF CRITIQUE
WHO CONTROLS?
WHO LEGITIMATES?
WHO DEFINES?
• Federal Legislators
• State Legislators
• Lenders & Collection Agencies
• Lobbyists
• Colleges and Universities
• Financial Aid Counselors
• Admissions & Career Counselors
• High School Guidance Counselors

9. Who benefits
at the
expense of students?
Who controls
the loan process?
Source: www.collegescholarships.org

10. PERPETUATING A FLAWED SYSTEM

11. STUDENT CRITIQUE
DID I BORROW THAT MUCH??
• Financial aid/loan information is confusing,
complicated, and not timely
• It’s difficult to compare cost and financial aid award
information across institutions
• Where’s the information on outcomes?
Career/Income counseling? Loan Repayment?

12. THE ETHIC OF JUSTICE
HOW SHALL WE
GOVERN OURSELVES?
• Principle of Benefit Maximization (Strike, Haller, and
Soltis, 2005) The best interest of the students is the
benefit to be maximized.
• Students must play by loan and education funding
rules they have no part in formulating (Howe, 1993)
• Students have a right to receive the information
needed to make competent choices and “decide
responsibly” (Strike et al., 2005)

13. THE ETHIC OF CARE
WHAT DO OUR RELATIONSHIPS
ASK OF US?
• Students should be treated as ends not means
(Starratt, 1991)
• See and respond to student needs (Gilligan, 1982)
• What are the motivations behind the relationships?
Students, lenders, legislators, lobbyists, counselors
(Starratt, 1991)
• Desire to see a person enjoy a fully human life (Strike
et al., 2005)

14. ...SOLUTIONS??
• Standardization of financial aid and loan information
and loan/debt counseling
• College and university accountability for cost
containment and outcomes
• Redesign the higher education funding system
• Student loan forgiveness - BIG debate!

15. ?????

16. REFERENCES
Abernathy, P., Asher, L., Cheng, D., Cochrane, D., Mais, J., & Thompson, J. (2013).
Aligning the means and the ends: How to improve federal student aid and increase
college access and success. Retrieved from The Institute for College Access &
Success website: http://www.tcias.org
American Association of State Colleges and Universities. (2007, July). Student loans and
public accountability. Washington, D.C.: Hillman, N.
Chen, H. & Volpe, R. P. (1998). An analysis of personal financial literacy among college
students. Financial Services Review, 7, 107-128.
Collinge, A. (2009). The student loan scam: The most oppressive debt in U.S. history and
how we can fight back. Boston, MA: Beacon Press.
Howe, K. R. (1993). The liberal democratic tradition and educational ethics. In Strike &
Ternasky (eds.), Ethics for Professionals in Education (Chapter 2, pp. 27-42).
Johnson, C. L. (2012). Do new student loan borrowers know what they are signing? A
phenomenological study of the financial aid experiences of high school seniors and
college freshmen (Doctoral dissertation). Retrieved from http://lib.dr.iastate.edu/etd/
Gilligan, C. (1982). In a different voice: Psychological theory and women’s development.
Boston, MA: Harvard University Press.
Ross, A. (2013). Mortgaging the future: Student debt in the age of austerity. New Labor
Forum, 22(1), 23-28. doi:10.1177/1095796012471638
Starratt, R. J. (1991). Building an ethical school: A theory for practice in educational
leadership. Educational Administration Quarterly, 27, 185-202.
Strike, K. A., Haller, E. J., & Soltis, J. F. (2005). The ethics of school administration (pp.
7-20, 52-64). New York: Teachers College Press.
Vedder, R. K. (2004). Going broke by degree: Why college costs too much. Washington,
D.C.: The AEI Press.
Whitsett, H.C. & O’Sullivan, R.O. (2012). Lost without a map: A survey about
students’experiences navigating the financial aid process. Retrieved from NERA
Economic Counseling website: http://www.nera.com