Bad Loans, Bad Schools

Millions of students borrow to go to college. Most repay the loans, but thousands default. Dropouts are the most likely to avoid repayment, according to a recent UCLA study of students at two-year colleges and trade schools--institutions with the worst records. The information is not startling, but in the current political climate it can be misused as ammunition to penalize deserving students.

The Reagan Administration has consistently reduced the amount of federal aid available, so there is less money to go around. A high default rate, at taxpayers’ expense, further persuades politicians, who subscribe to the narrow politics of self-help no matter how impoverished the student, to tighten the purse strings.

Federal education officials have suggested limiting guaranteed loans to high-school graduates--a restriction that would exclude mature students who lack diplomas but deserve a second chance. Federal authorities also recommend stronger counseling programs to inform borrowers of their responsibilities, complete with exit interviews when they graduate or leave for other reasons. Counseling will pay off when more students are guided toward a timely completion of their classes and helped in a search for jobs that pay more than the minimum wage.

Students who default cannot escape blame; they are reneging on a commitment. Dropouts may feel gypped by trade schools that promise but do not deliver, but two wrongs do not make a right, and gypping back by failing to repay debts hurts other students more than it does the schools.

Responsibility for the high default rate must be shared, however, with the leadership of the two-year colleges and vocational schools. They must work as hard to deliver an education as students do to receive it.

The California Student Aid Commission, the agency that ordered the UCLA study, suspended six private vocational schools last week because of bad track records. The crackdown is appropriate. Trade schools--beauty colleges, secretarial schools, schools for auto mechanics and television repairers and others--range from quite good to absolutely indifferent. The best of them provide avenues to decent jobs; the worst take the money and run.

The federal program of guaranteed loans is the largest single source of financial aid for all higher education. It would be a tragedy to have it fall victim to high default rates. Government must continue collecting from disillusioned students. It must be just as strict with schools that let students down.