The “Super Committee” also known as The Joint Select Committee on Deficit Reduction is looking for ways to cut $1.2 trillion in deficits over the next decade. To achieve this goal, the Super Committee must watch out for a flaw in the federal student loan program that threatens the federal budget.

The federal government guarantees repayment of most student loans meaning each loan default eventually piles updeficit. Since majority of the graduates were paying loans off, the cost of defaulted loans was negligible.

However, the rising cost of defaulted student loans is now getting more attention. According to The Department of Education the overall default rate for federally guaranteed student loans had risen to 8.8percent, up from 7 percent the previous year. But that 8.8 percent refers only to the 320,000 graduates out of 3.6 million who defaulted within two years of their first payments being due. Four years out will be worse.

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The Department of Education tries to prevent students from falling into the default category by postponing the repayment requirement through deferments and since the repayment requirement begins only when students are out of school, they enroll in graduate or additional undergraduate programs. But in time, the student’s only permanent solution to student-loan debt is obtaining a job that pays well enough to start repaying the loan. However, they can’t find jobs because of the weak economy and a flaw in the student loan program.

Congress provided grants to help kids go to college. These Pell grants give children the chance to prepare at college for rewarding careers. Congress also established numerous guaranteed loan programs as supplementary student aid for college costs – student loans must be repaid after graduation or after leaving school without graduating.

The Super Committee should recommend that student loans require proof of ability to repay them by scrutinizing students’ academic records, credit histories, and other criteria of credit-worthiness. Tightening eligibility for student loans would treat student loans as risky investments and ensure they are given only to student borrowers with a good chance of repaying them.

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