THIS week President Clinton sends to Congress two bills that promise big changes in the way students pay for a college education. The president's objectives have merit.
Announced on Friday, the National Service Plan is driven by the twin ideals of expanding access to higher education and fostering a sense of community responsibility. Open to people at least 17 years old with a high school diploma or equivalent, the plan would grant $5,000 toward tuition in exchange for one year of full-time public service work. The maximum grant: $10,000 for two years' service. While working, participants would earn $4.25 an hour, 85 percent of which would be paid by the federal governm ent, the rest by state or local agencies. States would be allocated "slots" based on population, which they would assign to specific projects. State and federal governments would monitor the program for fraud or abuse.
According to the College Board, the average annual cost of a college education at a four-year public college hit $7,584 in the 1991-92 school year, or $30,336 for four years. A $10,000 grant would clearly make that expense more manageable.
The second bill seeks to reform the federally insured student-loan program, for the most part by eliminating middlemen: Students apply for the loan, the school determines the level of aid, as it does now, and the federal Education Department writes the check. The loan repayment schedule would be determined by salary and could be collected through payroll deductions.
This approach is designed to cut costs. Defaults on student loans run at about $3 billion a year, and the government subsidizes banks and other lenders to keep interest rates below market levels. Initially, the government would fund the program through bonds; ultimately, it is to pay for itself.
Both programs would be phased in, taking full effect in 1997. Advocates should be willing to stretch that period if problems arise. They also should give serious consideration to alternatives: The Coalition of Student Loan Reform, whose members have a stake in the current system, has offered a plan that seeks to meet objections to the current program without cutting the private sector's role.