The national education albatross

The federal government now holds $1.34 trillion in outstanding student loans, a jaw-dropping quantification of the importance Americans place on a college education.

According to new data released by the Department of Education, 57 percent of borrowers owe less than $20,000. But more than one-third, 37 percent, owe between $20,000 and $100,000. The largest group of borrowers, 41 percent, attended public universities. Just 22 percent attended a private school, although they hold 32 percent of the outstanding debt.

Critics of subsidized student loans note the government’s increasing role in funding higher education hasn’t done anything to lower costs. As “more” money became available, schools increased tuition, forcing students to take out more loans. Private schools, already more expensive than their public counterparts, have an incentive to keep tuition and living costs as low as possible to fill classroom seats and dorm rooms. But even they aren’t immune to raising fees, especially for graduate students, knowing federal loans are relatively cheap and easy to come by.

The amount of outstanding debt wouldn’t be so bad, even at subsidized rates, if the government expected to get all that money back, with interest. But a large portion will fall on taxpayers to write off, either through defaults or legitimate forgiveness programs.

In July, the Congressional Budget Office estimated the government would write off $24 billion in student debt through Public Service Loan Forgiveness, a program that requires borrowers to work in a qualifying government or nonprofit job for 10 years. In 11th year, the government cancels the outstanding loan balance, whether it’s $5,000 or $50,000. Other programs also allow borrowers to write off potentially large balances while working in any job they want.

Given the increases in student debt in the last decade, it’s not surprising free college tuition plans are gaining traction. A recent poll by the Campaign for Free College Tuition, an obviously biased source, puts support for free state schools at 73 percent. Democrats are much more interested in such a plan, with a whopping 89 percent expressing support. But 56 percent of Republicans also voiced interest, showing how desperate students and parents are to make higher education more affordable.

I’ve written before about one conservative solution, championed by former Indiana Gov. Mitch Daniels, now president of Purdue University. Brown University, an Ivy League school, has rolled out its own plan to keep students debt-free. Through The Brown Promise, the Providence, R.I., school pledges to remove all loans from student aid packages beginning next year. The loans will be replaced with grants that don’t have to be repaid. Administrators expect the plan will only add $4.5 million to the annual financial aid budget, in part because the school already stopped asking for parent contributions for students from families making less than $60,000. It also already stripped loans from aid packages for students from families that make less than $100,000 a year.

Brown probably won't have much trouble raising the $120 million it needs to fund the program, given its elite status and deep well of high-earning alumni. But what would it take for a small Christian college to implement such a program? Is it possible to imagine a time in which Christians pulled together to give their children a high-quality, Christ-centered education that didn’t handicap them with seemingly insurmountable debt just as they begin their adult lives?