In the United States we have a growing problem that is severely hampering our economy. Student Loan debt now exceeds $1.3 trillion, $300 billion which has been added in the last three years. After reading the first two sentences of this essay you may think that I'm going to attempt to write a magnum opus about how student loans are the sole source of blame, but the problem is actually a lot more complex. Student loan companies and the Department of Education (which owns the majority of student loan debt) deserve some criticism, but they are simply filling a market need caused by the explosion of tuition costs (up 600% since 1980).
The rise of tuition costs have led to the need for giant amounts of student loans, so Universities and state schools should share in the blame for their exploding costs. In my opinion, the biggest problem that owners of crippling student loan debt face is the lack of opportunity to find a career in their field of study that would allow them to pay back these loans. I feel that the reason this issue doesn't get the attention it deserves is the majority of the burden falls on two groups:
1) Anyone who has graduated from college since 2005 (the year that legislation was passed to prevent bankruptcy from eliminating student loan debt).
2) The parents of these graduates who have to support their children for much longer than they ever anticipated.
Although you may disagree with my proposed solution, I think we can start with a basis of information that we can all agree on:
- Student loan debt is expanding at an exponential rate and now exceeds $1.3 Trillion
- Our Infrastructure is crumbling and is in need of serious repair
- There are very few jobs available for new graduates in their fields of study and due to this fact most "Millennials" have a difficult time repaying their debts
- Student loan debt has exceeded credit card and automobile loans for the first time in history
- Apathy, selfishness and ideologies are dividing this country at a time when we should be coming together to solve all of our pressing issues
Ideally, absolving the entire $1.3 trillion would be the best solution for millennials and their parents, but waiting for that to happen would be the equivalent of waiting for a unicorn to show up in the morning to take you to work. The Department of Education made $41.3 billion dollars of profit on the interest of the student loans they now own (Although Secretary of Education Arne Duncan takes exception to the word "profit"). If the DOE was a business entity in 2013 they would have been the third largest company in the world behind Apple and Exxon Mobil. As offensive as I find this, I also realize that if the DOE didn't provide the federal budget with that revenue stream then the $41.3 billion dollars would have to be accounted for somewhere else in the budget, most likely to the detriment of programs that support our working poor, public education, support for the elderly or once again, our crumbling infrastructure.
Ideally, we would eliminate loopholes in our tax code that allow corporations to avoid taxation or store money overseas ($2 trillion and growing is the current amount that corporations have taken out of our economy and placed overseas), but in case you've been in a coma for the last 15 years, you should realize that corporations now control our government. We certainly shouldn't ignore the vampiric actions of corporations that hide behind the fact that the United States does have the highest corporate tax rate in the world (35%, which is significantly less after you add up all the loopholes, exemptions and subsidies that they take advantage of), but that is a much bigger systemic change that needs to occur (in 2009 Exxon Mobil made a $45.2 billion in profits but paid $0 in federal taxes). I'm offering a solution that will provide immediate relief while we work as a country to fix our bigger systemic problems.
The lack of opportunity for newly graduated students not only impedes their ability to participate in the economy, but also impedes the ability of the generation that raised these children to be full participants in the economy. Many of the parents of millennials are forced to delay their retirement, take out a second mortgage on their home and/or continue to support and house these graduates after college. The inability to absolve this debt turns it into a lifelong problem for millions of Americans as I can personally attest to. It also stunts their individual financial growth and their ability to be a full participant in the economy. If I had an extra $1000/month (which is what I pay towards my debt every month $400 in student loans and $600 in credit card debt that I accrued while attending college) I would have been able to buy a house, build equity and accrue disposable income. Now I'm a reasonable person and realize that declaring bankruptcy due to a bad investment, such as a house that can no longer be paid for is different than declaring bankruptcy due to the inability to pay back student loans. The major difference is that in the home scenario, the lender would get back some of the debt it was owed in the form of assets. Outside of a full frontal lobotomy, the lenders of student loans would receive no form of assets in return for the elimination of the debt. Granted, bad debt expenses are write-offs for tax purposes so no tears are going to be shed for the private student loan vendors, but the majority of the debt is now owned by the federal government ($675 billion of the $1.3 trillion) and you can't write off a bad debt expense when you are the entity collecting the taxes.
Take a large portion of the money already allocated for the budgets of our infrastructure (which plummeted after the 2008 global economic collapse), bring it back up to the levels it was at prior to the collapse and invest in a new United States Youth Corps whose sole purpose would be to repair our crumbling and sometimes disastrous infrastructure. In exchange for one year of service in the United States Youth Corps, you would receive a $30,000 stipend to be applied to a secondary education. Not only would this be an investment in something that is already potentially dangerous (unless you like the thrill of driving on a bridge that may collapse), we would also be investing in the future of our economy. When the cost of college makes it prohibitive, what do you think the effects of a less educated populous will be on a society in 10-20 years? Will we be able to solve complex societal or environmental problems? Will we be able to support Social Security, Medicare and Medicaid with a less educated populous that no longer has a manufacturing industry? These questions and many more would be topics for their own discussion, but I think most reasonable people can work out the answers to these questions without too much effort.
So what would a United States Youth Corps look like? Seniors in high school who are college bound would continue their current application process in the same way they currently do, but there would be an option to delay admission for one year in order to work for the United States Youth Corps. Once they are accepted to a public university they can then apply to be in the United States Youth Corps. If accepted to a public university they would be granted automatic access to the USYC. In the first summer after they graduate they would start a two-month training, based on a specialized field of infrastructure repair. Once they were placed in the field they would work in their new position for ten months to complete a full year and end in the same month they began working for the USYC the previous year. This would also allow them to have one summer to get ready for college. The USYC would not replace the existing positions that are already allocated towards infrastructure repair. If anything, we will need the existing infrastructure repair and maintenance entities more than ever for their expertise during the implementation and follow through of this project. The USYC will be able supply a gigantic workforce to the communities and states that need infrastructure repair and maintenance.
What would the USYC actually do? This group of college bound students would work in under-served communities with the highest priority of needs. Some early proposals of the type of work they would be doing include, but are not limited to: building parks, planting trees, fixing pot holes, painting projects, working in homeless shelters, baby-sitting for single mothers and/or fathers so they can look for or attend work, building roads, repairing bridges, beautification projects, cleaning up trash, abandoned cars, abandoned buildings and rubble from downtrodden cities, working for and operating safe havens for drug addicts that will double as rehab centers, replanting grasslands in order to absorb more Co2 from our atmosphere, repair dams and levees, clean our lakes, rivers, oceans and make a difference in numerous other projects. USYC workers would get free room and board, free food and a monthly per diem. USYC would also be granted three weeks of vacation time and all major holidays.
Not only would these projects help many of our crumbling communities, but the USYC would require young adults to work with other young adults from all over the country, exposing them to new ideas, new points of view, new geographical locations and new cultures. This could only be beneficial in expanding a young adult's world view as well as how they view their fellow Americans. We are an extremely divided nations when it comes to ideologies and perhaps the USYC could be a step in bridging that divide. People with different points of view can work together for one full calendar year and being exposed to that type of thing at a young age could be extremely valuable later in life when trying to work together to solve problems in the not so distant future. From my own personal experience, I grew up in California and I could have benefited a great deal by working towards a common goal with someone from New York, another person from Arkansas, another from Kansas and another from North Dakota.
What potential roadblocks could this face? The major argument that will probably be levied against this proposal is that it's more big government. I would argue that this a dual investment not only for our crumbling infrastructure, but for the financial well-being of the generation that is going to have to solve an incredible amount of big problems we're facing in the 21st century. If we want Social Security, Medicare and Medicaid to be solvent in fifty years we are going to need the youth to finance it by having an opportunity to contribute to each of the programs pool of funds. If American students are $25,000 in debt when they leave college and the rest of the Westernized world is starting fresh because they get free secondary education, how are we supposed to compete on a global scale? Could you imagine if the $1.3 trillion that is locked up in student loan debt was actually flowing through the American economy right now? I can only speak for myself, but if didn't have student loan debt I would have already purchased a home, started a family, creating a savings account (imagine that?), made investments and spent disposable income. If $1.3 trillion of a singular debt were to be unlocked, the stimulus that would have on an economy would parallel with the war economy that pulled us out of the great depression in the early 1940s. I would also argue that sometimes you need big government. Our military is big government. So is Social Security, Medicare and Medicaid. Education, highways, disaster relief, all big government. I don't know too many people that would abolish any of the things I listed as big government, so if the USYC alleviates two growing and potential catastrophic problems in the United States then we need to decide as a country to move forward with it.
What if I already have student loan debt? How does this help me? Anyone who has student loan debt could also join the USYC and earn up to $30,000 towards their repayment. If you have less than $30,000, you could work for the pro-rated amount of time in order to repay your full loan. If you have more than $30,000 of student loan debt, say $100,000 for a law degree, then $30,000 would at least allow you to make a dent in your large loan. You could also work a second or third year with the USYC to pay off the entire loan. If you have already started your life and a year in the USYC is impossible then there needs to be a structured re-payment plan directly tied to income AFTER taxes. I propose a re-payment plan of 3% of income after taxes. If you're unemployed, you shouldn't pay a dime towards your student loans. If you are underemployed (i.e., working at Starbucks with a law degree) you shouldn't be required to pay anything that exceeds 3% of your income.
Can I work for the USYC if I don't plan on going to college? Yes, but not in the same capacity. There will be a major requirement for administration staff, medical centers, office managers, food centers, dormitories, etc. These would be hireable positions to be filled by a human resources department.
Have I thought of everything? Of course not, but the purpose of this proposal is to promote a conversation. If you like anything that has been proposed by this article, own it as yours and spread the word. Put pressure on your legislators at all levels (local, state and federal). We may not have the lobbyists or the money to get access to our legislators any longer, but a growing discontent of this magnitude cannot be ignored forever. After all, this is not a liberal issue. This is not a conservative issue. This is an American issue and at some point we are going to have to look in the mirror and acknowledge the fact that we've got some serious issues which threaten the well-being and future of this once great country. We can, should and will become that great nation once again, but it will never happen if we do not unshackle the handcuffs of debt that grow tighter with each passing year. We need to take a stance as a nation that nothing is more important than investing in our youth. If we make that important decision and begin to reinvest in the ENTIRE education of our youth I can assure you that it will pay unquantifiable dividends in the future. Without action, I fear that our days of being the world's leading superpower will tick away like a dusty old grandfather clock in an abandoned house. Each click, one step closer to the inevitable silence of ineptitude. Tick... we can fix this. Tock... but can we come together as a nation? Tick... will we act in time? Tock...