What the U.S. could learn from Australia’s student loan program

The interest rate on new federally subsidized student loans doubled on Monday from 3.4 percent to 6.8 percent. Congress may work out a deal in the next two weeks to soften the blow. But left as is, the interest rate hike could cost the average student $2,600. Yet critics say the larger problem is the level of the debt itself, which can be crippling. Is there a better way?

Bruce Chapman, economist at the Australian National University in Canberra, is the architect of a system that’s attracting some attention in Washington, DC. He joins Marketplace Morning Report host David Brancaccio to discuss Australia’s “study now/pay later” formula.