Many of Alabama’s 2018 high school graduates will start college this fall. Unfortunately, many recent college graduates report putting off buying cars or homes, saving for retirement, or marriage due to student loan debt. Will Alabama’s new grads face this fate?

Student loans now total almost $1.5 trillion, with 2016 graduates averaging $28,000 in debt. With over 10 percent of loans in default, taxpayers may eventually pay much of that $1.5 trillion. A closer look at the numbers, however, offers hope for grads and suggestions for ensuring access to college without excessively burdening students or taxpayers.

The $28,000 loan average is only for grads with debt; 30 percent of grads managed to complete college without borrowing. Students burdened with six figure loans, often featured in news stories, inflate this average and have frequently borrowed for graduate or professional degrees, or to attend expensive private or out-of-state universities.

Attending a public university and paying in-state tuition allows pursuit of a degree with little debt. High schoolers can also earn college credit through dual enrollment and advanced placement courses. Two-year colleges provide a low cost way to begin studies, particularly for students with marginal test scores and grades. College graduates earn 60 to 70 percent more than high school grads, but students who never earn degrees struggle to pay back loans.

Some students will never pay their big loan balances thanks to forgiveness programs. Although student loans are very difficult to discharge in bankruptcy, the Public Service Loan Forgiveness plan cancels remaining balances for government or not-for-profit sector workers after ten years of payments. The plan makes some sense: why collect extra taxes to pay government workers to pay back government loans?

The program, however, lets students planning on public service careers take on debt they will almost surely never repay. Georgetown University used this plan to offer free law school for aspiring public interest lawyers.

Mortgage-sized debts raise the question of why exactly the Federal government is in the student loan business. An economic argument arises from the nature of lending: unlike cars or homes, college degrees cannot readily be repossessed (and indentured servitude is illegal). Students may be unable to borrow for college if they or their parents lack collateral, despite the value of degrees. A market would exist in the absence of Federal student loans, in all likelihood using test scores, college grades, and choice of major in decisions.

I believe that equality of opportunity explains the student loan program, not the economics of lending. The earnings premium shows that for many, college is the gate to the middle class. Americans like everyone to have an opportunity to succeed through hard work. Some nations ration access to college using standardized tests, with a teenager’s poor test performance limiting college options. Americans like people whom experts and bankers think will fail to still have a chance.

Markets generally outperform government programs, but I’m okay with government loans for college. Why? Arthur Brooks of the American Enterprise Institute contends that about two thirds of Americans support markets, in principle if not always in the details. Furthermore, this support correlates with the perception that America is a land of opportunity. Maintaining support for markets may require loans to some marginally qualified students.

Access to college as part of an opportunity society suggests focusing loans on undergraduate students. The Urban Institute, however, found that 38 percent of loans now go to graduate students. And the Government Accountability Office found that 30 percent of outstanding loans would likely be forgiven under various programs.

We should rely on market loans for graduate and professional schools. While this may limit some students’ pursuit of advanced degrees, college graduates already earn 30 percent higher salaries than the national average. Why should taxpayers pay for college-educated Americans to pursue even higher salaries?

Alabama’s college-bound 2018 high school graduates need not end up with mortgage-sized student debt. And Federal student loans can provide opportunity for Americans without overly burdening taxpayers.