Why the Treasury Department is Better Suited to Manage Federal Student Loans than the Department of Education
In a world where the wrong people are often given the right jobs, it’s no surprise that the Department of Education is responsible for issuing federal student loans. However, upon closer examination, it becomes clear that this task would be better suited for the Department of the Treasury. Not only is the Department of Education ill-equipped to handle loans and credit analysis, but it also represents a conflict of interest. It’s time for a change.
Currently, the Department of Education administers all federal student aid programs, including loan origination and collection. They set policies, manage loan servicing, and act as a de-facto student loan clearinghouse. However, if student loans were overseen by the Treasury Department, there would be a seismic shift in the management of the federal student loan business.
The Treasury Department’s credit analysts would assess creditworthiness and manage financial risk. This means loaning money based on income, verifying repayment plans, deferment, and forgiveness programs. If students seemed unable to repay their loans in a timely manner, analysts would likely turn down their loan requests. This represents a turn toward fiscal accountability, which the Department of Education currently lacks.
Additionally, credit analysts would oversee risk management by loaning money to students based on the degree program they were seeking. If a student wanted a loan for a degree program that would not yield a market-based return, they would not receive the loan. This approach ensures that students are making financially responsible decisions and not burdening themselves with unnecessary debt.
Imagine a Treasury Department credit analyst, who is an education specialist, directing students into degree programs that best fit their capabilities and future earning potential. This educational financial advisor would ensure both a useful educational path and a financially responsible outcome. It’s a vision of an America that prioritizes individual success and fiscal responsibility.
Currently, federal student loans have become partisan folly, with the White House advocating for loan forgiveness regardless of income. However, the average federal student loan debt balance is $37,088, hardly a debilitating amount. It’s important to remember that the American dream is achieved through hard work, dedication, and drive, not solely through higher education.
Congress must reevaluate the federal student loan program and shift responsibility and management to a proper financial department. This common-sense approach would prevent the system from falling victim to constant partisan abuse and create a stronger American workforce. Unfortunately, significant changes to the program would require legislative action, which could take a long time to accomplish.
In conclusion, it’s clear that the Department of Education is not the best-suited entity to manage federal student loans. The Treasury Department, with its focus on credit analysis, risk management, and fiscal accountability, would be a better fit. It’s time for Congress to rethink the federal student loan program and make the necessary changes to ensure a brighter future for American students.
