White House called on to help student loan market


One of the latest potential victims of the credit crunch to emerge has been the student loan market. Democratic Congressman Rep. Paul Kanjorski of Pennsylvania., chairman of the House Financial Services subcommittee on capital markets, and 20 other members of his party sent a letter Friday to Treasury Secretary Henry Paulson and Education Secretary Margaret Spelling asking them to take steps to shore up the student loan market.

They wrote that "We urge you to work without delay ... to address this problem before it significantly decreases access to higher education opportunities for students and their families."

They may have a point, although Department of Education officials say that they haven't yet seen a problem emerge. But before we start to talk about unspecified government solutions to students not being able to borrow enormous sums of money to pay for college, I think we need to look at more common-sense solutions. As the Dolans discussed in a recent video, community college for the first 2 years is a wonderful way to save a ton of money on college. More incentives that encourage kids to pursue this option -- perhaps in exchange for better terms on student loans after they transfer to a state university -- could serve 2 purposes: eliminating the need for the government to pump money into student loans, and decreasing the size of the anchor that so many kids graduate college with.

Too many kids feel like attending a private college for 4 years is a birthright and I worry that these well-meaning Congressman may be feeding into that illusion. We shouldn't be talking about ways to make it easier for people to borrow money for college; we should be talking about ways to make borrowing huge sums of money for education unnecessary.