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Daniel Burrus

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The Real Way to Avoid a Student Loan Debt Crisis

Posted: 05/01/2012 4:05 pm

The recent recession forced many people out of jobs and back to the classroom to learn new skills. As a result, we now have an impending student loan debt crisis. Current reports show that U.S. student loan debt is surging above one trillion dollars, surpassing credit card and auto loan debt. Additionally, the majority (80 percent) of student loans are government-guaranteed, with 30 percent of these government-backed loans past due 30 days or more. That means the taxpayers are on the hook should the loans default.

But the real problem is not the student loan debt itself. Rather, the real problem is that even with their shiny new degrees, graduates (both young and old) are not finding jobs. What's the solution?

First, we have to retrain the high school and college counselors who give students advice about which major and career to pursue. Students aren't getting jobs when they graduate; yet, there is a great need in the U.S. right now in the areas of science, math, and engineering, as well as in areas that don't require a bachelor's degree, such as fiber installers, electricians, and mechanics.

Too many counselors aren't helping students see the path to employment based on the degree they're picking. Instead they tell students to "follow your interests and passion" and pick a major based on that. How about giving students a three column list that shows the path to employment based on various majors? The list can show the jobs you can get with a two-year technical degree, such as machinist and electrician; jobs you can get with a bachelor's degree only, like teacher, accountant, or engineer; and the jobs you need a masters degree or higher to get work, such as psychologist or sociologist. If more students knew that their chosen major requires an advanced degree to find employment, chances are high that they'd choose a different major.

Second, the U.S. can't maintain its competitiveness without people who have degrees in science, math, and engineering. So why not provide incentives to get students interested in those fields? For example, a student who gets a two-year tech degree to become a machinist, or a four-year degree in engineering or math, and then works in that field could get a tax break on their student loans every year they are employed. Yes, they'll pay less in taxes, but the money they would have paid in taxes is still collected because it's going toward paying off their student loan and they are helping to keep employment high.

Finally, we need to look at any existing programs for students and expand them to graduates. For example, some states use their lottery proceeds to offer high school students with a 3.0 or higher graduating grade point average free tuition if they go to an in-state college. Why not expand this program to help science, math, and engineering majors who have already graduated reduce or eliminate their student loans if they work in the state?

Remember, the real problem we're facing is not the amount of student loan debt. The real problem is that the U.S. has an under-employment crisis, meaning we have people who are trained for jobs that are going away or are trained to do things that there aren't jobs for because they need advanced education. If we're going to be competitive in the 21st century with China, India, and other places around the world, we need to give better guidance and counseling to our students, and we need to reward the behaviors and choices we want so we get more science, math, and engineering majors. Such an approach is good for all of us because it will make the U.S. more competitive internationally -- and that is the real cornerstone of our country's future prosperity.

Daniel Burrus

Article first published as The Real Way to Avoid a Student Loan Debt Crisis on Technorati.

 
 
 

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aliceandthecat
the most curious thing I ever saw
12:34 AM on 05/14/2012
just graduated from Phoenix College CC with a associates in science moving forward to a university to get a degree in biochem - a stem field. Thinking of leaving US to get away from from student loans - how to change ID. Most fellow grad were arts/humanities I gazed on them and though future waitresses/maids/unemployed. I wonder how many will file for deferment of loans under newly discovered disabilities? STEM is better, but under fascist Amerika who knows. What is the best country to flee to? Cuba? Med Tech is a good job, but I am female and 46....please anyone with advice or experience in this...no trolls (I haz em for nom nomz)... say up.......
09:52 AM on 05/06/2012
That tax break idea is discriminatory and unfair. The incentive to go into those fields should be the higher income these grads will be receiving. I know people received those engineering degrees and landed 120k job right out of college. So basically it's more tax breaks for the wealthy. Go figure.
12:19 PM on 05/02/2012
Americans are prerejected from STEM employment due to H1B infestation and offshoring.

We need more jobs.

We don't need more college graduates including STEM.

Young Americans are abandoning STEM because of the extremely grim job prospects.
06:33 PM on 05/02/2012
STEM has better job prospects than the liberal arts and humanities. Going the management route is better from the STEM background, preferably with a few years working in the field before doing a solid MBA. And STEM prepares you for tech startups (I have done 3).

Yes there is offshoring in STEM, but there is in Legal, Medical, and most professional services as well, and I won't say anything about offshoring in manufacturing.
07:23 PM on 05/02/2012
College is a pretty poor financial investment for the vast majority of students. STEM might have better job prospects but it is still a ticket to the unemployment line.
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GHY1
12:18 PM on 05/02/2012
Anyone have any good ideas for someone who has a BS in chemistry and minors in Math + Physics from back in 1976. I ended up doing mail and shipping work because of epilepsy. People wouldn't hire me because of seizures. Now seizure free about 10 years
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05:55 PM on 05/03/2012
GHY1

Seizures probably are not the problem. Your age is working against you. If you are willing, with your science background, you can go into teaching without getting any further education. The school district will train you for free after you go to work. Where I live, science majors are in such short supply that you will earn $3,000 a year more than other teachers, right off the bat. I don't know where you are, but I live in Texas. Check it out.
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Mollyannie
Thinking "I can't" guarantees failure
06:55 PM on 05/01/2012
How about not incurring $100k in debt for a job that pays $30k/yr.
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06:00 PM on 05/03/2012
Mollyannie

Thank God. At last, someone with an ounce of common sense. I had someone from the
The World Owes Me Something generation tell me that he follows his passion in life rather than wasting it working at a job that suck said life out of him. This was said while he was whinning about having to repay his college loans. I applaude him for following his "passion." I just he did not expect me to pay for it.
06:14 PM on 05/01/2012
Sometimes I wish that I was stronger in math/science, but I really didn't enjoy those courses as much as social studies and english. What do you tell those kinds of people, that they need to force themselves to take on those course even if they don't enjoy it or are simply weaker in those areas? Yes I agree, the STEM (science, technology, engineering, mathematics) fields are crucial, but there still needs to be a balance between those areas and others too in the work world
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06:04 PM on 05/03/2012
monicahoger08

I certainly feel that you should be able to take the courses that you enjoy. We all need to tip-toe through the tulips as much as possible. Just do not expect the tax-payers to pay for your useless degrees.

Get a decent job to support yourself, and you can still have an advocation in the area of liberal arts.
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05:26 PM on 05/01/2012
Revamp the GED to include advanced degrees. Verify and reward self initiative. Adults will need a cheap way to revamp skills every 5 years. Instead of one time only skill hoarding.

Research main dendritic organizational pathways for memory and design learning around clustering kids around teaching methods/pathways that best match their brain physiology - rather than age group. Alternately program etextbooks that offer the same lesson with appeals to multiple pathways. (color, frequency sweeps, etc etc)
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07:03 PM on 05/03/2012
Ginzu Mawa

Not age grouping is a tough one. A 6 year old who needs naps and a lot of potty breaks and wants his mommie with him will not fit well with a 13 year old whose main purpose in life is to ogle the girls and has not spoken to his mother in the last 2 years. Regardless of IQ and learning style.

A lst grader reading on a 6th grade level cannot be taught the same way as a 12th grader who reads on a 6th grade level.
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08:31 PM on 05/03/2012
mixed age classrooms allow older kids to influence younger kids and allows for influence of emotional growth. locking kids in by age limits access to range of maturity and influence of such. ... use of tele-presence to group kids across the country by subject level and age. we dont live in 1900 anymore. we live in the future - get used to it.