Student loans

Student borrowers do not deserve “pardon”. They deserve an apology.

Still unconvinced that the nation should seek discharge from debtors, not the other way around? Consider the facts.

First, there’s the Free Federal Student Aid, or FAFSA, app that for decades has hitched millions of students and families each year to its cumbersome, question-buzzing and confusing form — and infuriating – the “expected family contribution”. The new legislation reduces the number of questions to a maximum of 36 from 108, but it too is so complex that changes take years to complete. And that does nothing to bridge the chasm between what the federal system (and a second, CSS profilethat many private colleges use) “expects” and what seems realistic for many families.

What about Pell grants?

They were named for Senator Claiborne Pell in 1980, although earlier versions have existed for years as it has long been clear that lower income teenagers cannot afford many colleges. But the aid offered by these scholarships has declined because lawmakers have not set the annual amount per person to track any college cost index.

Philip Levinprofessor of economics at Wellesley College and author of a new book titled “A Problem of Adjustment: How Complex Pricing Harms Students and Universities,” calculated just how short it can leave low-income students.

Take teens from households with an income of about $37,000, or about the 25th percentile of income and assets. By his calculations, the public schools he reviewed will charge students who live on campus to pay about $14,000 each year, after accounting for Pell Grants and other scholarships. Even if these students max out their federal loans — $5,500 for most of these freshmen — and take jobs through the federal work-study program, there will still be thousands of dollars left over each year to cover. No one cares about this gap.

As we ask these teenagers to borrow tens of thousands of dollars that we would never lend them for anything else, the government offers a menu of loan options. With some of that debt, interest starts accruing right away, years before you can even drink a legal beer.

There wouldn’t be so much of a debt problem if, as a nation, we made it a priority to subsidize public higher education. But we don’t. Among the 26 nations that the Organization for Economic Co-operation and Development surveysonly Britain has higher average tuition fees for public universities than the United States.