THE GUARANTEED student loan program now costs the government more than $3 billion a year. Only half that is available for the intended purpose of subsidizing interest rates. The rest is consumed in making good on defaults. These retreats from responsibility are now the third largest single expenditure of the Department of Education.

The administration has made a number of proposals to staunch the flow. Now if a student walks away from a guaranteed loan, the federal government is liable for the entire amount. The administration suggested that a little of this exposure be shifted to the banks and states, on the theory that the banks would then become more selective in making loans and both would become more aggressive about collecting them. But the banks and states resisted, and Congress basically left them off the hook.

Now Education Secretary William Bennett has opened a second front. He proposes to bar from the program, by regulation and after a number of years, any educational institution where the default rate exceeds 20 percent; he will start right away to expel those where the rate exceeds 50 percent.

This too is being resisted. Of the 7,300 institutions with students in the guaranteed loan program, 30 percent had default rates greater than 20 percent last year; 533 had rates over 50 percent. The high-rate institutions tend almost by definition to be those that cater most to needy students, who are higher risks. Community colleges, the flourishing industry of for-profit trade schools and historically black colleges and universities would be among the hardest hit.

Their argument -- true to some extent -- is that the administration proposal would narrow access to higher education by making loans harder to get. "That is unconscionable," said the president of the National Association of Trade and Technical Schools.

But so is the present volume of default; it is an ethical as well as fiscal hemorrhage. Supporters urge a tolerant view, reminding that there will always be some leakage when a program runs the risks of broadening opportunity. But these are more than occasional and tolerable failures. In settings where the default rate is over 50 or even 20 percent, students and schools are exercising the wrong kind of self-help. Mr. Bennett is right to try to crack down.