Letter: Make student loans rationally

Government-guaranteed student loan practice must be greatly improved. Very many of these loans substantially exceeded the value of the underlying asset (degree) and the ability of the borrower to protect taxpayers’ money. It also misleads immature students and naïve parents to believing all college degrees have adequate job-market value.

Student loans should be based on three things that relate strongly to the probability that the loan will be paid on time in full.

First is field of study. A bachelor’s degree in electrical engineering is a more valuable asset and much more likely to lead to a job that pays enough to cover a reasonable loan than a doctorate in the history of the philosophy of pre-Ming dynasty chamber pot design.

Second is the school. Marketable-skills degrees from legitimate schools are much more valuable than similar-sounding degrees from scam, online, or for-profit (or pseudo-nonprofit) schools.

Third is the ability of the student. A bottom-of-the-high-school-class performer with a very low SAT score is highly unlikely to get into a decent school, successfully pursue a rigorous, well-paying degree, and graduate.

Government-guaranteed student loans should be made rationally, just like auto loans or mortgages. What’s the asset worth, and will we taxpayers be forced to bail out a deadbeat?