According to most everyone in the personal finance blog-o-net, student loan debt is worse than the latest Melissa McCarthy movie. Oh stop pretending she’s done anything good since 2013. This is an actual shot from her latest movie, The Boss, which I had the misfortune of seeing in the theater.

tire fire

Anyhoo.

The main reason why people hate student loan debt so much is because so many of them fell into it to get their education, and then had to work really hard to get out of it once they got a job. Some even took such terrible steps as (gasp!) moving back into their parents’ basement or getting a roommate or whatever.

I know. Such sacrifice. Little orphan Jimmy with no hands or feet wants you to have his last dollar, personal finance blogger who had to cut out takeout coffee to get out of debt slightly faster.

As I’ve argued before, student loan debt isn’t so bad provided you use it to get somewhere you want to be. Getting a degree in women’s studies, psychology, or theater probably isn’t a good idea. Degrees in nursing, accounting, or education are usually much better bets, since they usually come with pretty good employment prospects.

Related: Instead of whining about student debt, do something to help

Look at it this way. Say you have income potential of $40,000 per year if you don’t go to school or $60,000 if you do. And it’ll cost you $25,000 in student loan debt to do so. Why wouldn’t you spend $25,000 to make a $20,000 increase in annual income? I’d do unwholesome things for a return that succulent.

Okay, perhaps it isn’t student debt itself we have a problem with. People are happy to get into debt assuming it gets them better income prospects. Maybe it’s the amount of student debt that peeves everybody off.

With stories of six-figure student loan balances common, we all know there’s definitely people out there who borrowed far too aggressively. For every doctor with $100,000+ in student loans, there seems to be an equivalent amount of people who somehow managed to rack up that much getting a PhD in some arts subject that isn’t compensated very well in the marketplace.

But it turns out even that’s wrong.

The reality of student debt

It seems counter-intuitive–at least, at first–but the New York Times confirms it. People with large amounts of student loan debt are not the big problem.

According to an article from last year, the people with the highest student loan amounts ($100,000 or more) were actually the least likely to default. People with more than $100,000 in student debt in 2009 only defaulted at an 18% rate by 2014.

That’s compared to people who owed between $1,000 and $5,000, who defaulted almost double as much, or 34% of the time.

So what gives? The explanation is pretty simple. People with the most student loan debt tend to have the best employment possibilities. Those with small amounts likely failed out before they got started, meaning they have no additional income potential. In fact, many probably saw their earnings potential take a hit because they quit steady employment to pursue schooling.

The solution to our student loan problem is always presented as finding ways to have people borrow less. But it’s obvious that isn’t all these is to it. It isn’t so much the amount borrowed that’s the problem; it’s the ability to pay it back that separates a good risk from a bad one.

The easy solution

There’s an easy way to create a system that accomplishes this. All we need to do is limit the amount of student loans to degrees that don’t have much in earning prospects.

I don’t know many teachers who aren’t gainfully employed. I do know at least one theater major who currently works as a server in a restaurant. If they both owed equal student loans, I’d bet on the teacher being able to pay them off over the drama student.

Although that might be my Canadian bias showing since teachers tend to get paid pretty well up here. They start at $60,000 per year here in Alberta.

But that still doesn’t cover people who go into debt to take very specialized courses. How many real estate agents do you think go into debt only to discover they’re terrible at sales? There are probably a million more examples, never mind people who got pressured into taking college courses who never should have gone in the first place.

The solution to that is perhaps forcing each borrower to enter into an income-based repayment program. That would make payments affordable for everyone, even those who see no additional salary bump because of their education. Other ideas outlined in the Times article include stretching out the payment period from 10 years to 25 in select cases or switching students to an income-based approach as soon as they fall behind.

Student loans are complex. I’m not sure I have a solution, but it is interesting to think about them in deeper ways than they’re currently analyzed.

Tell everyone, yo!