Letter: Find a better way on student loans

Student loan debt now exceeds $1 billion. More than 1 million loans are in default. Good intention; failed result.

We know as fast as individual student borrowing limits rise, student tuition and fees rise even faster. Therein lies at least part of the problem. Little risk for the schools.

A recent letter to the Wall Street Journal made sense. To paraphrase the letter from a Stuart Levy, let’s get the colleges to have some skin in the game. Instead of the government lending money to students, the government could lend the money to the schools at no interest under liberal terms. The colleges and universities could lend the money to their students with the lowest interest rate they can. As the loans got repaid, that money would go into the pot for future student loans.

The difference between no-interest on the government loan and the interest charged to the students should offset the additional overhead of the schools to administer the loans.

Currently, the cost of failed student loans is a loss to the government (i.e. you).

If the schools had to take the loss for bad loans, I bet they would get better at controlling the rising cost of tuition and fees. Some Ivy League universities have billion-dollar endowments, yet you, the taxpayers, are assuming the risk for their student loans.

Remember what President Barack Obama said about Cuba: if the past approach failed consistently, try a new approach.

This story was originally published April 7, 2017 at 3:25 PM with the headline "Letter: Find a better way on student loans."