Letter: New payback system would ensure future of student loans

Jun. 06, 2013 @ 11:37 PM


Students with excellent credentials are failing to apply to colleges or quality trade schools because they fear student loans will be too difficult to repay. This does not bode well for the economic security of our country. Excellent talent is being wasted in a country that needs all the skills available to keep us a strong and healthy nation. My solution is simple:

  • Continue to make funds available to students who qualify.
  • Provide a payback system that will benefit both the student and our country.

My payback system would remain optional with 100% of the decision left to the student. It would work as follows:

Whatever funds were borrowed through a government program could be paid back over time with a commitment to work in their degree field for the government for a fixed number of years at the normal pay rate for that position. Student must complete studies in consecutive time period and not take semesters off to "find themselves" or some other excuse for delaying completion of education. They must graduate to qualify and not have to maintain a predetermined grade/point average.

If they leave the government position early or choose to enter the private sector, whatever balance remains on the loan must be paid back at current interest rates. If they were fired from a government position, the remaining balance would be due in full at current interest rates.

It is a carrot/stick approach. Once the student has the degree or trade school training, they have a skill that can be put to good use, and with maximum benefit to our country.

Simple example: Student graduates with a degree in education. They have borrowed $100,000 to get the degree. Average private sector pay rate for their degree is $45,000 year. Comparable government rate is $30,000 year. The government will reduce their debt by $10,000 year for as long as they stay and remain an employee in good standing. They can leave at any time for private sector and pay back the balance or stay until full debt is repaid. Up to them.

What is the benefit? We now have a student who has a skill comparable to their ability and passing it on to benefit our nation. For fear of debt, they may not have gained a skill at all and possibly end up costing us greatly in subsidy program payments. How much money is being lost to the government because many current students have no realistic way to repay?

Without education, and the benefits of same, our country is needlessly digging a big hole that could be prevented. You must invest to get a return. Let's invest wisely.

Richard White