The Post's editorial ''Untangling Student Aid'' {Jan. 14} tangles some bad ideas in with some good.

The upcoming congressional reauthorization of the Higher Education Act of 1965, which governs all federal student financial aid programs, may very well be ''the most important social legislation of the next two years.'' When Congress reauthorizes the act, though, it should not use the student loan default problem as a reason to set up another government agency or as an excuse to limit students' access to education.

The proposal to turn over direct student lending to the federal government is more than a question of federal budget accounting procedures. We already know that defaults cost taxpayers about $2 billion a year and that banks are leaving the program in frustration over the complexity and lack of profitability of the program. The government's performance in a more direct role under the old federally insured student loan program was a disaster. Why would we think that the U.S. Department of Education has dramatically changed and that turning the program over again would save us money? This approach only masks the real question: why we as a nation continue to force our neediest students to assume enormous debt burdens.

Student loan defaults have grown over the past decade because the volume of loans to lower-income students has grown as the real value of grants has been cut in half. Loans are made to students, not to schools, and the fact is that lower-income students have a higher tendency to default than upper-income students. That is true regardless of whether they use their loans to attend state universities, private colleges or privately owned colleges or schools.

To assert that a certain group of private post-secondary schools is somehow responsible for a disproportionate share of the defaults is to fail to recognize that they generally tend to serve a larger population of lower-income students. Similar loan default rates are experienced by students attending urban area community colleges and historically black colleges.

Privately owned schools have demonstrated time and again that they provide a service, meet needs and offer real value -- not just to their students but to society as well. They train aircraft mechanics, broadcasters, commercial artists, computer programmers, interior designers and electronic technicians. And unlike public and private tax-supported institutions, they receive no tax subsidies.

There are valuable proposals being made to deal with student loan defaults that do not involve more government overhead or limiting students' access to diverse educational programs. We need to focus on proposals that will strengthen the responsibility and authority of the states, the accrediting organizations and the U.S. Department of Education. ROBERT B. KNUTSON Chairman and Chief Executive Officer Education Management Corporation Pittsburgh