LETTER: A way out of the student loan fiasco

In response to your recent editorial, “Congress tinkers on edges when it comes to tuition costs”: I agree with your comments but would like to focus on several of them.

You correctly note that the Democrats want to continue “down the same path” which has created the current situation in which we have a $1.75 trillion deficit from student loans. This deficit is due to several reasons. First of all, interest on these loans ranges from 3.1 percent to 8.1 percent and repayment options do not necessarily cover the interest accruing on these loans, as payments are based on student income. Also, payments may not exceed 10 percent of net income and could be far less.

Also, after making required payments for 10, 20 or 25 years, the government writes off the balance of these loans. Ten years for those who choose public service work, 20 or 25 for others depending on when the loan was initiated. Why the disparity for non-public service? But eventually everyone gets their loans written off. All of which leads to the current deficit in student loans.

All of this is why I’ve been proposing that the interest rate be retroactively lowered to 1 percent to 2 percent to just cover the cost of servicing the loans. This would reduce the deficit significantly and lower everyone’s balance, thereby increasing future paybacks and reducing the amounts written off, helping both students and taxpayers simultaneously. This should garner bipartisan approval as everyone wins.

And finally, to your point about reforming the system, my suggestion would do so and would eliminate the need for future “interventions” in the student loan program.