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Este Griffith
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A Risk Sharing Proposal for Student Loans
In this paper, the authors propose a risk-sharing system for the student loan program. Institutions with low repayment rates, as measured by a new cohort-based repayment metric, would be asked to pay a fee in proportion to the degree to which they miss repayment rate targets. This fee is intended to be a nudge to encourage institutions to improve matching between students and programs, program quality, completion, and other factors that relate to repayment outcomes.