Address cause of problem with college debt

President Joe Biden has wisely resisted pressure to issue blanket forgiveness for graduates’ college debt of up to $50,000 per borrower. Instead, the president has chosen more targeted — and fair — approaches.

Those include allowing debtors to stop paying on their loans during the pandemic without owing any additional interest on the loan; canceling the debt of severely disabled grads and those who were taken in by forprofit schools that made false promises or that closed down before they could finish their education; and making fixes to the troubled program under which students were supposed to receive debt relief if they entered public service.

But another form of student debt relief is about to end in August — the pandemic-era moratorium on payments. As a result, Biden faces renewed pressure to make a sweeping, $1 trillion loan forgiveness of up to $50,000 per borrower that would wipe out two-thirds of the college debt in the country. He has indicated that he’s more inclined toward canceling $10,000 of debt, which would cost less than half as much and reach the largest number of students per dollar.

Student loans have mired about 43 million Americans in debt. Not all of those are unable to meet their obligations and not all of the debt involves federally guaranteed loans. But economists have shown that the added financial strain keeps many borrowers from buying homes and cars and starting families — a trickle-down effect on the nation’s economy and social structure. Total debt nearly doubled from 2011 to 2021.

The nation needs a plan to permanently reduce student debt through basic college reform. After all, today’s college graduates might get relief, but what about next year’s grads, and those in the years and decades to come?

Free college as modeled on the systems of other nations isn’t the answer. German public universities, for example, are tuition-free but bare-bones; few are admitted; students generally live at home and commute, class sizes are large, and student activities and services scant.

Still, the U.S. and its colleges could learn lessons from other countries about controlling costs. Team sports play a much smaller role in other nations. The number of administrators is much lower. The Department of Education should be putting colleges on notice that they must reduce these costs to continue receiving federal aid.

Another solution is to give high school graduates the option to get skills training without having to obtain a degree. The U.S. and its employers have overemphasized four-year college degrees for earning a good living rather than the skills needed to do the job. It’s about time American high school students had access to paid apprenticeships to students who aren’t college-bound. That’s not just

for work in the trades but careers in management, banking,

programming, customer service and many more fields.

The federal government should provide incentives for thrifty behavior by college students who attend public institutions, and start out their college careers in community colleges, as well as those who work for a few years and save some money to help defray the costs. For example, those students should be first in line for debt relief in the future.

This nation should subsidize no interest or very low interest on student loans — again, prioritizing public institutions or students who have found other ways to reduce their college expenses. Because they tend to be long-term loans, the interest rate is especially burdensome. It should be enough that students repay the amount they borrowed, plus a limited amount more in interest. Better that than widespread loan default.

It’s a rare student who enters college with no intention of paying off his or her loans. But this nation has normalized an unsustainable level of debt for many young Americans. People who file for bankruptcy must attend courses so that they learn to manage money better. Is America ready to learn its lesson on college finance?