Re: The Aug. 18 Bloomberg Opinion editorial “Another View: Congress has a chance to fix the student loan mess”:

I would like to point out that politicians, academicians, journalists and most students and families miss a central point about higher education and the so-called “student loan crisis,” which is that it doesn’t exist.

Not any more than a “mortgage crisis” exists.

What I mean is that the current financial aid system all accredited colleges and universities subscribe to, comprised of federal, state and institutional components, works just fine. There already are extensive income-based repayment plans (put in place during the Obama administration), which work well.

The problem is that families are not properly educated about borrowing, and are inclined to allow their kids to borrow more than they should.

Let me make it simple: Every student, rich or poor, should limit his/her borrowing to the Federal Direct Loan program (also referred to as the Stafford Loan) – up to (and no more than) $5,500 per year. That makes the “cost” to the student for a four-year bachelor’s degree $22,000. At the current fixed interest rate of 2.75 percent, that’s a 10-year repay of $209.90 per month. Your kid can be working at Starbucks and sharing an apartment and be able to afford that.

Never take out alternative loans (ones that need to be co-signed for). It’s the responsibility of the family to pay their “fair share,” after which the state/federal government and the individual schools must make up the difference. If they don’t, you can appeal, and if your appeal is unsuccessful, you must choose a different school to attend.

What is a family’s “fair share,” and who determines it? Colleges refer to it as the “expected family contribution,” and it’s derived from a percentage of a family’s income and assets. It can be a bit mysterious, but the true definition of “fair share” is determined by the family: It’s the amount they can afford, over four years, without sacrificing retirement savings, home equity and the education of their additional children. It’s no more difficult to figure out than your budget for the next family vacation – be prudent, realistic and honest.

Understand this and there is no student debt crisis. School counselors and college admissions officers need to do a better job understanding this themselves, and educating our students and families.

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