As Congress works to reauthorize the Higher Education Act and strengthen student loan policies, the challenges are daunting:
Student loan debt now totals about $1.1 trillion — and is growing. That’s almost twice the total outstanding debt from as recently as 2007.
This year’s college graduates owe, on average, $32,500 in college-related debt.
There is no question this debt is a challenge to our country. This isn’t just about dollars — it’s about dreams.
So how can Congress fix what’s broken, not merely affix a bandage to buy some time?
In fairness, many members are working on the problem. A few have even proposed legislation. Yes, it is tempting, as some have suggested, to simply lower the interest rate on all student loans across the board or, as others propose, to write off some outstanding debts entirely. By doing this, we would slide down a slippery slope where there would be no rewards for responsible financial behavior and no consequences for unwise, if understandable decisions.
Instead, Congress should devise solutions that reflect the proven principles of our economic system, such as incentivizing desirable behavior.