Bringing Sanity To Student Loans

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WASHINGTON--There's something wrong with America's education policy if 18-year old Josh Coyne, a brilliant African American musician who has been accepted at New York's Manhattan School of Music, cannot get a government loan.

One of the most common loans through the U.S. Department of Education is the Direct Parent Plus loan. But low-income students find it difficult to get them. Either their family's credit history isn't good enough, or their families would face a crushing burden of debt upon graduation.

Josh, who just graduated from high school in Maryland, plays violin, viola, saxophone, and piano. He also is a talented composer. He composed the score for Anne & Emmett, an acclaimed play written by Janet Langhart Cohen, and he conducted the premiere of his ballet True Love.

Over the past several years, Josh has given his time and talent to help others in need. With his compositions and performances, he has already raised thousands of dollars for Haiti earthquake relief efforts and for arts education scholarships for at-risk youth.

Josh has played his violin for Vice President Biden and Attorney General Holder, and a documentary is being filmed about him called "Prodigy."

Former Secretary of Defense William Cohen wrote in a recommendation, "I believe that Joshua is one of the great young talents of America, and has a future that is unlimited in scope and depth."

But Josh faces the problem of thousands of other young Americans: His single mother, Jane Coyne, who adopted him when he was two, doesn't earn enough at her job with the National PTA to send him to college without financial help.

Josh has been admitted to one of America's leading conservatories, Manhattan School of Music, near Columbia University. It's a four-year program, where he's one of only two entering students admitted to major in composition.

Josh has been given a scholarship from the conservatory covering $25,000 of the $53,000 in annual fees. The federal Pell grant, the Work-Study program, two kinds of Stafford loans, the Supplemental Educational Opportunity Grant, and the Perkins loan bring in another $11,800.

However, Josh's acceptance letter states that the conservatory expects his family to use the U.S. Department of Education's Direct Parent Plus loan to pay for the remaining $16,000.

Here is the problem. Ms. Coyne doesn't earn enough to borrow through Direct Parent Plus. On June 9, Department of Education spokeswoman Sara Gast told me that "borrowers have to start paying interest right away, which would make these loans unattractive to those with low incomes."

On June 15, Ms. Gast corrected herself. She told me that a borrower could be eligible to defer repayment on the Parent Plus loan until six months after the student graduates. Still, it is not clear that Ms. Coyne could get such a loan, because she would owe $64,000 when Josh graduates. It's hard to see how she could pay it back.

The unpleasant truth is that the Education Department is helping not the lowest-income parents, but middle- and upper-income families.

There is a reasonable policy question about whether the federal government should be in the student loan or grant business at all. But, given that the government is already in that business, why should the government make education accessible to some families while excluding less affluent ones?

Just as we taxpayers provide Food Stamps and medical care to low-income Americans, we should make college grants and loans to talented students so that they may, eventually, progress economically. And, with his acceptance at the Manhattan School of Music, Josh has shown he has talent recognized by musical authorities. His prospects are bright.

Some disagree, saying that college aid goes beyond the safety net, which has to do with food, health care, and shelter. However, as the Chinese saying goes, it is better to teach someone to fish than give him a fish. Education gives people the ability to help themselves.

The policy implication for Washington is a reorientation of student aid away from the current system that is income based: the more your parents earn, the more you may borrow as a student.

A more reasonable alternative would be independent of parental income: the better the performance of a student, the more the student may borrow. Call it performance-based aid in which all children, regardless of income, have a chance to compete. After all, to the extent the government has an interest in promoting post-secondary education, it should be to invest in promising children, not affluent parents.

Such a reorientation would serve a worthy purpose-enabling talented boys and girls to attend fine universities and thereby enhance their prospects for future employment, income, and tax payments.

Josh is clearly not going to get a private loan from a bank. As the student loan provider Sallie Mae helpfully explains on its Web site, "If you're a student with little or no credit history, it may be difficult for you to qualify for a loan without a creditworthy cosigner." And, with Josh's family income, his mother is not eligible to co-sign.

Debra Kinzler, director of public relations for Manhattan School of Music, said, "He's a promising student, and he's going to be a wonderful addition. It's up to the parent to find the extra money."

No doubt, many parents and students find it hard to find the extra money. If Uncle Sam wants to continue federal support for student grants and loans, it's time to figure out a better answer for Josh and countless other promising young Americans than "Sorry, your parents don't earn enough money."

For more information about Josh or to contribute to his tax-deductible scholarship fund at the Manhattan School of Music, he may be contacted at

Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter: @FurchtgottRoth.   

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