The only good thing about student loans is that the day I die my children will not have to pay for them,” says Judith Tuck. As Education News reports:


A college degree is supposed to pave the way to a better life. It didn’t work out that way for Judith Tuck. Tuck graduated from the University of Arizona in 1996 with a master’s degree in rehabilitation counseling and $44,000 in student loans. She had every intention of keeping up with her loan payments, but after a series of low-wage jobs in her field, her debt began to snowball. Tuck, a 73-year-old widow, now owes more than $136,000. Her wages have been garnished and she faces losing everything, including her home. …

Outstanding student loans topped $1 trillion last year, exceeding the total amount of credit card debt. Thousands of borrowers are postponing getting married, buying a home or having children until their debts are paid off. Defaults are rising, which typically leads to larger loan balances. And the problem isn’t limited to young adults. Some borrowers are older adults who went back to school. Others are parents who co-signed loans for their children. There’s widespread agreement that student debt is a problem, but there’s little consensus on how to solve it.


USA Today looked at five possible solutions: bankruptcy reform, loan forgiveness, Pell Grant increases, linking aid to affordability, and educating borrowers. Trouble is, none of those solutions gets to the root of the problem: Few, if any, incentives for students or schools to keep costs down. (See here, here, and here).

Students should plan ahead and realize that going into a field that pays two, three, or more times less than the cost of earning a related degree is not a good investment—for them or the taxpayers who subsidize it. Second, institutions should stop spending student and taxpayer dollars on non mission-critical enterprises and make it easier for students to complete degrees in a timely manner.

State policymakers could help, too, by directing lump-sum operations appropriations to students directly in the form of grants. This way, institutions get public funds only for the students they attract and retain, incentivizing them to keep costs down and graduate students on time. Students are incentivized to shop wisely for the best programs at the best price.

The alternative—even if we were to follow USA Today’s featured “solutions”—is for students to remain in school earning degrees they don’t necessarily need or want just to delay the day of reckoning when their student loans come due.