Students and families can finance higher education in three ways: grants, government-backed loans, or private loans. Contemporary research and debate typically focus on grants and federally supported loans. Meanwhile, despite its explosive growth, the private loan market remains minimally researched and poorly understood. This made sense a decade ago, when the private college-loan market was marginal. Today, however, in an era marked by radical changes in the ranks of higher education providers, the makeup of the college-going population, and the availability and utilization of credit, it is time to look much more thoughtfully and imaginatively at the role of private loans.

AEI has launched a new research effort to examine the student-loan industry, the role it plays in higher education finance, and its implications on college access and affordability. AEI director of education policy Frederick M. Hess has commissioned scholars and analysts to explore the industry, document its innovations, consider the promise and the peril of private loans, and contemplate the implications it will have on policymakers, students, and those who work in higher education. On September 25, 2006, AEI will host a major public conference at which the research will be presented and discussed. Speakers will include Alan Bersin, Secretary of Education of California; Catherine B. Reynolds of EduCap, Inc./Loan to Learn;  Richard George of Great Lakes Higher Education Corporation; and Bridget Terry Long of Harvard University.