A regrettable proposal for student loans

Health care isn't the only system on the verge of being overhauled. Federal student loans, which six out of 10 families rely on to pay for college, could soon see their most dramatic changes since 1965. Given the stakes, it would be wise for policymakers to heed some of lessons found right here on these pages.

Since February, the Star Tribune's "Streamlining Minnesota" series has examined ways to achieve a more efficient public sector. Its blend of ambitious goals, idealism and pragmatism could teach national policymakers a thing or two.

A plan is now before Congress to eliminate the Federal Family Education Loan (FFEL) Program, which serves 90 percent of Minnesota schools. Replacing it would be the Federal Direct Loan Program, which come July 1 would be the only federal student loan program.

It's truly unfortunate that the proposed Student Aid and Fiscal Responsibility Act hasn't been subjected to the kind of evidence-based analysis advocated by "Streamlining Minnesota." Had it been, a strong case would have been made for preserving a program model based on consumer choice and borrower service.

Take two principles advanced in an article from March:

First, focus on results, not dollars. "The bottom line of government isn't dollars," Public Strategies Group cofounder Babak Armajani said. "It's results per dollar."

Yet it's exactly the dollars that have most influenced the thinking on the FFEL elimination proposal. Too many have been unduly swayed by the government's claims of gargantuan (read unrealistic) cost savings from eliminating the program.


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