Sometime this month millions of recent college graduates will have to start paying their student debt. Most of these graduates, however, will be either unemployed or working at a part-time job, unable to make the payments on their loans. As good as one may be at filling caramel macchiato orders, graduates have better opportunities in the form of service programs.
In a stark contrast from where these Millennials were six months ago, graduating from some of the nation's top universities, they are now some of the newest victims of the recession. No less different from the class before them, they entered a grim world where the promise of a better opportunities guaranteed by a degree were hard to find.
Today, of more than 2 million recent college graduates under the age of 25, over 700,000 have been hired to a position that doesn't require anything more than a high school diploma. What is worst, is that these new entrants to the workforce will on average have to payback more than $20,000 in loans -- loans that come due this month.
As the six-month grace period on their financial aid ends, graduates will be forced to make difficult choices. They will have to choose between paying their rent or Sallie Mae, feed themselves or dish out to Nelnet. This has pushed more than a third of Millennials to seek financial assistance from their families.
President Obama has made great strides to reform the student loan industry and to make college more affordable. When he signed the student loan reform bill in 2009, he more than tripled the college tax credit for working families and simplified the federal student aid application, easing the process to apply for financial support. Mr. Obama's signature also doubled the total funding for Pell Grants and increased the award size to match the rising cost of higher education.
Unfortunately, these new measures will not affect recent graduates who have already taken out loans to pay for school. Still lost in legislative limbo, members of this misplaced generation are still burdened to make hefty payments and will not feel the benefits of the president's reforms.
Unlike other generations caught in the economic downturn however, recent graduates have the ability to be more adventurous to tackle new opportunities until the economy rebounds.
The silver lining in their budding careers could be in service programs. Organizations like Teach for America, AmeriCorps, and the Peace Corps can utilize recent graduates in service projects around the country and the globe. These programs provide members with living allowance, student loan forbearance, and health care. It will give recent graduates the opportunity for civic engagement while providing real world experiences to help strengthen their job prospects after a tour of service.
The professional development that will be gained from service from these programs will be invaluable to the participants. It will foster entrepreneurship, leadership abilities, and communication skills that will be carried into their next job. These organizations also offer graduate school and employer partnerships that once finished with their commitment will open the door to opportunities they would otherwise have difficulty gaining in a depressed market.
These programs are assets to the communities where they have a presence. Allowing graduates serve as community organizers working with businesses, public organizations, government offices and educational institutions will put new leaders to work and stir development in distressed neighborhoods. A win-win situation for everyone involved.
The president and Congress have already showed signs of supporting these types of policies before. Recently the Congress expanded the Income Based Repayment (IBR) program, allowing those who choose lower-paying careers in public service, to cap payments on their student loans to 10 percent of their income.
Whether or not the new Congress has the fortitude to expand these programs during these difficult times, still remains unclear. If they are creative, they have the can expand these programs without massive spending increases. If they don't, Millennials can expect to continue to ask, "Would you like whip with that?" for a while longer.