Student loan debt in the United States now totals $1.5 trillion, and it keeps rising. This is a massive burden for students and graduates and holds back the entire U.S. economy. Because of increasing tuition and student loan debt, the number of students attending college has declined for seven years in a row. A lack of a skilled, knowledgeable workforce severely harms the ability of the U.S. economy to compete on the global stage.
Presidential candidate Elizabeth Warren has proposed that we cancel, or pay off, the student debt of 42 million Americans. There is no free lunch--the money must come from somewhere, or someone else. My proposal allows those with student loan debt to reduce their loans by volunteering for public service, in the Peace Corps, Americorp, the military, as a teacher or a doctor in underserved communities. In other words, a reduction in student loan debt should be earned, not given away. It is unfair to those who have paid off their student loans to cancel the debt of those who have failed to reduce their loans.
About 3.5 million students graduate from high school in the U.S. every year. Of those graduates, only about 100,000 go into national service in the military, Americorp or the Peace Corp. That is a meager three percent.
The military is always struggling to obtain high-quality recruits. Americorp and the Peace Corp could do so much more good in the United States and around the world if they had more participants.
National Service Volunteers Should Receive College Loan Forgiveness
We should provide an economic incentive to volunteer for the military, Peace Corp and Americorp by providing loan payoffs for every year of service. After World War II, Congress enacted the GI Bill that gave military veterans living expenses and tuition for college. Ten years after World War II, a total 7.8 million veterans used G.I. Bill educational benefits to advance their civilian careers and drove the U.S. economy to all-time highs. Most historians and economists have found the G.I. Bill to have been a major political and economic success.
A new GI bill is now in effect that pays for veterans' college expenses in a similar way that the original G.I. Bill did after World War II. The main provisions of the act includes funding 100% of a public four-year undergraduate education to a veteran who has served three years on active duty since September 11, 2001. However, unlike the original GI Bill, no living expenses are included.
We should expand the current federal law to provide similar benefits for those volunteering for Americorp, the Peace Corps and other public service. In addition, the law should provide student loan forgiveness to those who become public school teachers, as well as nurses and doctors who work in rural communities underserved by the medical profession.
You Are On Your Own
If you are one of the patriotic and selfless Americans who volunteer for the Peace Corp or Americorp you should get assistance with college and/or apprenticeship training costs. Now, on the PeaceCorp's website, the U.S. government says "Student loan benefits. Student loans are your responsibility while you are in service." In other words, concerning college loans, "you are on you own." Good luck with that.
Effects on the Economy
If we can cut student loan debt significantly, college grads and those who attended apprenticeship training will see their disposable income rise dramatically. Home sales, car sales, and consumer product sales will take off.
A new National Service Program will cost the U.S. government about $10 billion per year. This is based on a cost of $20,000 per person for 500,000 graduates. The total of federal spending is about $4 trillion a year. This National Service Program represents a miniscule 0.25 percent of the budget. However, the military already pays for more than half of this. If every high school graduate participated, the cost would rise to $70 billion per year, still a small price to pay for the benefits.
Cost Benefit Analysis
We know the costs. But what are the benefits? Domestically, Americorp will help teach those in underserved communities. Americorp will also help rebuild inner cities and rural communities that have been devastated by abandoned factories, by floods, earthquakes, fires and other natural disasters.