Rethinking student loans
By Eli Evankovich
Published: Monday, Aug. 26, 2013, 9:00 p.m.
Given the recent attention being paid to student loan debt, I wanted to weigh in on the matter from my perspective as a father, student loan payer and state lawmaker.
Because of changes incorporated under the Affordable Care Act, the federal government is the sole distributor of federally subsidized student loans. Private banks and states have largely moved away from offering student loans. That move places the responsibility of student borrowing almost entirely in the hands of the federal government and out of the hands of state government.
As a father, I see the growing burden that could be placed on the shoulders of my children. As a student-loan payer, I have firsthand knowledge about our own education mortgage. As a lawmaker, I search for solutions across the higher-education system to better prepare students for careers, while at the same time putting them in a position to afford both their lifestyles and student loan payments after graduation.
The conversation in Washington, D.C., seems to be centered on interest rates. We should remind ourselves that this “interest rate debacle” is a crisis created by federal government action, or more accurately, its inaction. From my point of view, fixing the interest rate issue does not even come close to addressing the real problem.
I believe the major problem with student loans stems from one primary imbalance — the value of the education versus the cost of the education.
Most of us can relate to applying for a loan to buy a home. The bank doesn't approve that loan based on what we want to pay for the home; it approves that loan based on the assessed value of the home. Banks do this to protect their investment to help ensure they are able to be repaid. This age-old concept protects the bank, but it also protects you from borrowing too much! The same protections are not in place for students who borrow to pay for college.
I feel that the value of a degree should be based on what that student can expect to earn with his education. If a history major will, on average, earn less than an engineering or accounting major, I think that it makes perfect sense to give him the protection against “over-borrowing” for his education.
If students were able to borrow based only on the value of their degree, wouldn't it cause students to think more closely about their course of study and what it will mean to them after college? Wouldn't it also require colleges and universities to reconsider the costs of their programs? And doesn't it make sense that if borrowing is tied to expected earnings, the student will have a more reasonable expectation to be able to afford his student loans when he graduates?
Student loan debt has surpassed the $1 trillion mark and will continue to grow as a percentage of income for the same generations that are also being asked to pay for the nearly $17 trillion federal debt, countless trillions of unfunded Medicare and Social Security obligations, and public-sector pension debts, among others.
We cannot afford to limit the scope of our national conversation about student loan debt and the cost of higher education to interest rates only — other ideas must be considered.
Eli Evankovich is serving his second term as state representative from the 54th District in Westmoreland and Armstrong counties.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Host of Steelers veterans look toward career survival mode
- Steelers film session: Polamalu not at fault on long run
- UPMC doctor killed trying to help at 50-vehicle pileup
- One dead in officer-involved shooting in Monroeville
- McKeesport Festival of Trees raised holiday spirits of needy
- Young defensemen lift Penguins to win
- Pirates notebook: Huntington narrows team’s offseason targets
- McKeesport progressing toward resolution of suit
- Versailles moves to join enterprise zone
- Search continues for abductor
- Expert: KO doesn’t mean ‘worst’ concussion for Pens’ Orpik