College loans are, as I guess we all know by now, really burdensome. Why are the rules for the loans so crappy then?

Thus wonders Erin Dillon, senior policy analyst at Education Sector. As she writes at Ed Sector’s blog:

The 2009 and 2010 graduates are fortunate that they have income-based repayment available, which allows them to repay their loans as a percent of their income. But IBR requires students to file paperwork to enroll and file more paperwork if their income situation changes. Ditto for other options available to postpone or reduce payments, like forbearance and deferment.

Having an assortment of programs, all with their own rules and paperwork, to help struggling borrowers may make sense if those borrowers are the exception. But when median starting salaries aren’t enough to comfortably cover median debt loads, we probably need to start thinking about a system that treats repayment struggles as the rule, not the exception.

What to do about this problem? Dillon recommends moving toward a system of income-contingent loans – borrowers repay their debt based on their income. As graduates make more money, as people tend to as they age, they can pay more money toward eliminating their student loans. Such a system “would look a lot like what they’re already doing in Australia, New Zealand and the UK,” where borrowers service loan payments automatically through the tax system.

I’m not entirely sure if this is the best system possible (certainly the U.K.’s “pay when you can afford it” plan is a lot worse for students than its earlier “don’t ever pay” plan) but considering we’ve already decided to go with debt financing for college, isn’t it about time to consider rules that are appropriate for people’s real lives.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer