The wasteful and unfair federal student-loan programs.

Before Bill Clinton starts looking for ways to pay for the new aid to college-bound students he's proposing--or Congress returns to its budget-cutting fervor--both ought to take a refresher course in the perversities and absurdities that abound in our current student-subsidy programs. There's big money to be saved. Just two programs--Pell Grants and subsidized student loans--made up $22 billion of the Department of Education budget (about two-thirds), and a lot of that money is spent in dubious ways.

About 10 percent of that $22 billion goes down the rat hole to students who, either because they lie about their qualifications or because the government makes a mistake, don't, in fact, qualify. Another few billion goes to students whose major qualification is that their parents are divorced. Billions more send middle- and upper-class kids to expensive private schools. Still more millions subsidize such odd groups as single mothers with rich parents.

To be fair, Clinton inherited this mess. But he also made a big deal out of reforming it. His accomplishment? He's stopped banks from taking advantage of the system to skim a few hundred dollars off the top of each new student loan. Meanwhile, the system's other, much bigger abuses (some created on Clinton's watch) continue unabated.

Silly Social Incentives

The Department of Education has the common-sense idea that if parents have the means, they ought to help their kids with their college costs before taxpayers are asked to assist. But Congress has created a handful of handy ways to ditch rich parents. Follow these rules to become an independent student, and no matter how much your parents make, the government will consider you poor and in need of aid.

Tie the knot: Suddenly parents' income and assets no longer count toward determining whether or not a student is poor. Of course, young marriage is the most likely to end in divorce.

Do nothing: If a kid sits around till he's 23, he becomes an independent student, too, not because his parents kicked him out of the house, but because, well, just because. And, for the kid who can't quite get his or her act together, the government is willing to pay for up to six years of undergraduate education. Has this subsidy contributed to an increase in the number of years it takes to graduate? Today, fewer than 40 percent of college students graduate in four years; a quarter century ago the number was 50 percent.

Have an illegitimate child: This special qualifying factor, added by Clinton and the 103^rd Congress, is solely for the benefit of upper- and middle-class single mothers, who are now allowed to disregard their parents' income in applying for loans and grants. Remember, getting married already separates college students from their parents in Washington's eyes, and poor kids are already eligible for Pell Grants and subsidized loans. As a result of these and other ways to make students legally independent of their parents, the number of independent students has skyrocketed--in the '70s, fewer than 20 percent of undergrads were independent; today more than half are.

Dump dad: The granddaddy of all the stupid social incentives isn't for kids, it's for dads. If you're a middle-class dad who can't afford to send your child to college, divorce your wife. The taxpayer will end up sending your kid to school because divorced fathers' income isn't counted under current rules. (Even though married dads aren't legally required to pay for their kids' college either, their income is always counted by the feds.) This policy helps explain why there are 50 percent more kids with divorced parents among student-aid recipients (more than a million in total) than among the general student population, according to the Center for Education Statistics. Private schools count the father's income in determining if his kids are in need--Uncle Sam should, too.

Waste