Spitzer: How to Fix Student Loan Mess

Peg students' payments to their income
By Ambreen Ali,  Newser User
Posted Mar 4, 2009 5:33 PM CST
Spitzer says "smart loans" will let students choose careers that pay less, but may hold more social value.   (AP Photo/Tim Roske, file)
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(Newser) – In his latest Slate column, Eliot Spitzer shifts to education, with a solution on how to reform the student loan system. "We need to fix how Americans pay for higher education," writes the former New York governor. Rather than crippling loans that prevent bright graduates from pursuing worthy but low-paying careers such as teaching, Spitzer suggests "smart loans" that let students repay a fixed percentage tied to their income.

"The current system of hitting graduating students with immediately sky-high payment obligations just as they enter the work force is nonsensical," writes Spitzer. "Pegging repayment amounts to income earned is common sense." He says the idea, already used in Europe, is popular with conservative and liberal economists alike.