If you're worried about student loan debt, what it means for graduating seniors and for the future of our nation, congratulations. That means you're paying attention. Now that Americans owe over $1 trillion in student debt, more than they owe on their credit cards, many people are beginning to see that our country's current way of paying for college cannot be sustained.
Unfortunately, as I mentioned in this space last week, our leaders are not taking the problem seriously. For all the suave coolness President Obama displayed during his "Slow Jam" on student loan debt, his call to keep the interest rate on federally subsidized Stafford loans at the current 3.4 percent will not have much of an impact. It's a distraction from the looming crisis.
Here's the problem, folks: In America right now, an entire generation is mortgaging its future. And the chances that they'll ever succeed in paying off that debt are growing ever slimmer. As tuitions continue to increase, the job market stagnates and median wages -- especially for the young -- trend downwards, we are now trapping millions of young people in a cycle of high debt and low opportunity from which some will never escape.
There is a better way.
I call it the National Service Corps. The idea is simple: In exchange for a few years of service to their country, young people would receive significant financial assistance to pay for college.
The idea is not new, of course. After World War II, the G.I. Bill sent millions of returning soldiers to college and technical school. Some veterans even had their entire tuition paid to attend the top Ivy League schools. The result: A generation of highly-experienced young people, trained in business, engineering and science, led our nation into the longest period of sustained economic growth the world has ever known.
The situation we face now is not so different from what we faced in 1944, when the G.I. Bill was first passed.
Then as now, America faced a new technological era that swept away millions of jobs that were never coming back (think Dustbowl farmers replaced by tractors then; bank tellers replaced by smartphones now).
Then as now, newly ascendant world powers threaten to overtake our leads in education and scientific research.
Then as now, a generation of young people faces the prospect of systemic unemployment and shaky economic futures.
What's also true is that young Americans are just as ready to serve their country in 2012 as they were in 1944. And now more than ever, America must invest to give its young people the skills they need to lead us into the future.
The basics of a National Service Corps haven't changed much since the G.I. Bill, or since I first wrote about the idea as an aide working in Congress in 1969. If you give service to your country, then your country will help you go to college. Young people who choose to participate could choose to serve in the military, or they could do civilian projects in education, community service and infrastructure building, similar to the work done now by Peace Corps and AmeriCorps volunteers.
Americorps, in fact, was created by the Clinton administration and expanded dramatically under Bush 43. Given the fact that it is a federal program, it is of course complicated: It is part of the Corporation for National and Community Service, which also oversees related programs that you probably haven't heard of, like the Senior Corps and Learn and Serve America. AmeriCorps itself has three divisions, which incorporate things like the Vista program, which is the domestic version of the Peace Corps, and has been around since 1965. Although experience can widely vary, most members of AmeriCorps earn a stipend of about $5,000 a year which can be used to offset existing student loans, certain health benefits and living expenses while they're enrolled in the program. While the program has cachet and is good as far as it goes, $5,000 a year for college in the U.S. doesn't go very far.
The time has come for the re-creation of AmeriCorps, and the rethinking of the government role in borrowing for education. Specifically, the country needs to address three major problems:
Should all volunteers join the National Service Corps at age 18, right after high school? Or should they be allowed to choose whether to participate during college or even after college, depending on their financial and educational needs?
Should all National Service Corps volunteers serve two years? Or should civilian volunteers serve for three years while military volunteers -- who put their lives on the line -- serve only two?
Answering these questions and probably even discussing this idea will be a challenge. To be large enough to solve the problems of looming college debt and structural unemployment, a National Service Corps could cost billions of dollars a year. In the current political environment, arguing for any new or expanded program, especially one as large and important as this one, might be viewed as a risk few politicians are in the mood to take.
We must not allow what amounts to political cowardice to stop us. We cannot accept the United States as a waning world power, simply because we are too myopic to invest in our own future. We cannot accept generations of young people drowning in a sea of debt and underemployment. We cannot accept politicians who distract us with silly -- but cool -- gimmicks, however well intentioned. It's time to act.
This article originally appeared on Credit.com.
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At current salaries and costs none of this is sustainable.
There are some champions in the fight to eradicate some of the issues towards the student loan debacle.
Robert Applebaum his determination to change the current political trends of ignoring the 1 Trillion dollar Student Loan Debacle and all actors involved: you can find more information here:
http://forgivestudentloandebt.com/ OR https://www.facebook.com/groups/forgivestudentloandebt/
&
Denise Smith https://www.facebook.com/groups/aging.with.student.debt/ who is feverishly working for those older student who are over 50 that are saddled with student loan debt.
And although, I believe an informed and engaged society is mandatory for citizen commitment, recourse, and discourse; there are grassroots organizations touting “don’t pay your student loans; and just walk away.” That is ludicrous, you can never walk away from that form of debt, and your student loans will follow and haunt you forever. There are ways in which to deal with your student loans, but walking away from that debt is not one of them. There are many programs to assist in managing your student loan debt: exhaust all possibilities of repayment before just walking away and opting out of life.
http://studentloandebacle.blogspot.com/
Interesting side note is that many prestigious schools are cheaper to attend for poorer students than many state schools due to a university's endowment. I studied engineering at an Ivy League school and it was less expensive than the major state university -- even considering in-state tuition.
We don't need new ways to shift the cost of education onto third parties - what we need is reform that pushes the cost of education down.
We need to let the market discover what kinds of degrees are needed, and we need to let the market discover new ways of delivering educational services.
This authors article is proposing deluding ourselves about the cost of education by spreading its cost on the society as a whole, a scheme which encourages individual consumers of educational products to make bad choices. In this case the cost of their bad choices is in part at least absorbed by the community.
We don't need a government that actively misleads the marketplace in order to satisfy some notion of entitlement. We need a government that enforces fair dealing, and allows the liberty of the people the opportunity to develop the ways that we live.
I would be in favor of this if it were funded through block grants that would expire a couple years down the road, presumably when the economy has improved. The problem comes when we structurally incorporate something like this into our budget perminantly. The idea here is to preserve human capital through tough economic times while addressing the student loan bubble. It would have the potential to garner more bipartisan support if people could be reassured that it wouldn't add billions of dollars in pensions to an already overloaded economy. We've seen what that looks like in Europe and it aint pretty.
Look, it's financial crap.
You work one year for a stipend of $10,000 and at the end of the year you get $4,700 that can be used to pay for college. It's that same amount as you'd get working for minimum wage for one year!
Want a real program? Make Pell Grants worth $20,000 per year. Debt will END.
Watch UC Berkeley graduate default drop like a rock!
We have just seen our kid's lives casually thrown away by a Republican administration which uses a "shoot first and ask questions later" foreign policy, partly because they are incompetent to find diplomatic solutions, and partly because the war industries who thrive on perpetual war are willing to pay massive bribery to keep it going. And, they want their noses in everyone elses' oil.
I once saw a picture of a german citizen pushing a wheelbarrow of dm down the road (not sure, to buy something like a loaf of bread)..granted that was after one of the world wars, are we headed for the same?
the corporate/political system is abusing and wasting our nations GDP