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Richard Davis: Let students perform service to retire their loans

Published: Wednesday, July 3 2013 12:00 a.m. MDT

Student loan debt has mushroomed in the United States, as have defaults on those loans, but there are ways to avoid or reduce debt.

Jaren Wilkey, BYU Photo, All

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I went to a graduation ceremony in May to watch my son receive an MBA degree. In a sense, it was a very expensive ceremony to attend. He is now tens of thousands of dollars in debt for his college education. Nor is he alone. According to the Federal Reserve, the total student debt today is over $870 billion. And that is owed by approximately 37 million people. The average student debt is over $23,000. One-quarter of those debtors owe more than $50,000.

These are staggering amounts for anyone to pay, much less those who are just starting out in life. The problem is exacerbated by many college graduates' inability to find decent-paying jobs in a down economy. They face student loan payments while being under-employed. No wonder many end up in their parents' basements when facing the choice between paying rent and utility bills, or making the student loan payment.

Is there any way to relieve this problem? One way to reduce that debt would be to provide some debt forgiveness for student loan debtors who engage in community service. Debtors could work as volunteers in schools, hospitals or clinics, non-profit organizations or local government agencies for up to two years and in return receive credit toward their debt. Whether they were trained to be accountants, teachers or journalists, these graduates would gain valuable civic experience working in behalf of the community.

This solution would offer a win-win for the community and former students. Many civic organizations beg for volunteers to help staff soup kitchens, Meals on Wheels, and hospital volunteer teams, as well as youth organizations such as Boy Scouts, Girl Scouts, and Boys and Girls Clubs. This program would provide many of those sorely needed volunteers. In turn, young people would learn the value of community volunteer efforts while getting out from under some of the massive debt they carry.

A program called Teach for America works under a similar concept. New graduates work as teachers in public schools on Native American reservations, in rural Appalachia, and throughout large cities in the United States. They work toward certification and earn a teacher's salary, but they also receive an education voucher they can use to reduce their student debt.

Similarly, under this plan, recent graduates could earn credits toward payments on their student loans for every hour of volunteering. Placement in volunteer organizations may have to be arranged. And a record of volunteering would be needed to assure the service was provided. Moreover, the individual must commit to fulfill a certain number of hours in order to enter this program.

Some might ask whether the federal government doesn't already do this. The federal government does run the AmeriCorps program. But AmeriCorps provides full- or part-time jobs where compensation is provided. This program would be well suited for those who already have jobs. And there would be no compensation since the individual would be volunteering.

The next question is: Who would pay for this program? Funding could come from private donations. Foundations and individuals would be solicited to donate to the endowment for debt forgiveness. Teach for America operates on the same basis. Those foundations with a particular interest in civic involvement probably would participate because of the emphasis on volunteerism.

Higher education needs to be made more affordable for future generations so the United States can continue to have a well-educated population, particularly in an age of global economic competition as well as increasing technological demands. This idea would not solve that problem. However, it could ease the burden for many people who have now, and yet will, seek a college education to make life better for themselves and their families. At the same time, it also could better our communities.

Richard Davis is a professor of political science at Brigham Young University. His opinions do not necessarily reflect those of BYU. Email: Richard_Davis@byu.edu

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