A lot has already been said about the Supreme Court’s decision on federal student loan forgiveness but what’s missing from the conversation is how we constructively address the larger issue — a broken federal higher education system in need of significant and lasting reform.

First, the federal system does too much for too many and not enough for those who truly need support. Too many resources are being used to fund loans to students and families with little need for taxpayer assistance. This practice diverts money that could be used to make grants to students with demonstrated need, and for whom assistance will make a critical difference in their ability to afford higher education.  

Further, by offering some federal student loans in virtually unlimited amounts, without consideration of a borrower’s ability to repay them, the federal program allows, predictably, unsustainable levels of debt. This unlimited lending jeopardizes the financial health of families seeking higher education while denying them the incentive to seek more affordable education options that still meet their needs. The New America Foundation described the unlimited lending of certain federal student loan programs as “predatory.” At a minimum, the system as it currently operates allows too many families to borrow more than they can reasonably afford to repay.

Second, problems with the federal financial aid system have consequences not only for current students but also for future students. These systemic flaws in federal aid contribute to the college cost inflation that confronts students and families of all income levels. In fact, according to U.S. government data, the cost of college has risen 169 percent from 1980 to 2019. A study by the Federal Reserve Bank of New York found that tuitions rise — for all students — because of federal student loan credit increases. People seem to understand that to address college costs, we need to look at the way the government lends to families. Recent polling shows most Americans believe that addressing the unlimited nature of federal loan programs would be an important step in protecting students and making college more affordable. A recent editorial in the Washington Post agreed.

Third, there is also agreement that borrowing should never be the first option for lower-income and historically marginalized students, yet the federal financial aid system is poorly designed to avoid it. Resources should be redirected to fund, and award, grants that will make a meaningful difference for aspiring students who have real, demonstrated financial need. Larger Pell Grants would increase college retention and enrollment rates for low-income students, but we need to make sure those who qualify for Pell Grants actually apply for them and the process isn’t overly complex. In 2022, $3.6 billion in Pell Grants went unclaimed — billions of dollars that could have put higher education within reach for students with demonstrated financial need. 

In addition, letting students use grant aid on short-term job training programs or apprenticeships, for instance, could help more young people find a long-term path to professional and financial success by matching employees to employers who need them.

If we fail to make significant structural reforms to the federal higher education system, another generation of students and families will inevitably face the same hurdles so many face today. The Supreme Court’s decision is a call for us to come together and work toward meaningful reform.

Jon Witter is the CEO of Sallie Mae.