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Fall 2007
ISSN 0890-913X
Volume 23, Number 1

The Market Failure for Student Loans

Andrew B. Carver, The College of New Jersey, School of Business
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/jpe/index.php?action=ajax&rs=GDMgetPage&rsargs[]=Fall2007 6.pdf&rsargs[]=0
JournalofPrivateEnterprise,Volumexxin-,Number1,Fall2007TheMarketFailureforStudentLoansAndrewB.CarverTheCollegeofNewJersey,SchoolofBusinessAbstractScholarshavearguedthattheuniquenatureofaninvestmentineducationresultsinamarketfailureforstudentloans.Thismarketfailureissaidtoexistdespitetheempiricallyestablished,attractiverisk-returnprofileofeducationalinvestments.Thispaperreviewstheliteratureonschoolloanmarketfailureandarguesagainstthemarketfailurehypothesis.Italsosuggeststhatthemostsignificantthreattotheschoolloanmarketisafailuretoproperlydefineandprotectaborrower'spropertyrightstohisownfutureincome.Finally,itmakesthecasethatprotectingpropertyrightsandeliminatingloansubsidiesshouldresultinahealthiermarketforeducationalfunding.AndrewB.Carver101
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