We Don't Need Another Student Loan Repayment Program

For the past several weeks the massive and ubiquitous student loan debt of American college graduates has been a major news story, along with the attempts by President Obama, Mitt Romney, and the GOP-controlled House of Representatives to make political hay of the issue while ostensibly advancing plans for resolving it. Of the ideas floated, President Obama’s appears the least serious and most political, particularly because his approach would expand the scope of federally subsidized loans -- in effect pouring good money after bad.

According to the most recently compiled data, the average college student graduating in 2010 owed an average of $25,250.  According to the marketing research division of American Student Assistance (which advises collegians on loans and debts), there are approximately 37 million Americans with some outstanding student loan debt. This spring another 1.7 million will graduate with bachelor's degrees, as well as 833,000 with associate's degrees, 696,000 with master's degrees, 102,000 with professional degrees, and about 74,000 with doctorates (happily, Starbucks should have no problem filling its ranks with the latter). The cumulative student loan debt which right now stands at approximately $870 billion will no doubt increase even more.

The prospects of repaying such crushing student loan burdens look bleak for recent graduates, considering that over half are unemployed and the remainder are “underemployed” -- a result, for far too many, of having bought into the Pelosi propaganda that a creative writing, womyns’ studies, or theatre major would work in the Obama economy. In fact, “only three of the 30 occupations with the largest projected number of job openings by 2020 will require a bachelor’s degree or higher to fill the position -- teachers, college professors and accountants…[c]ollege graduates who majored in zoology, anthropology, philosophy, art history and humanities were among the least likely to find jobs appropriate to their education level….”

A proper discussion of whether American society wrongly promotes college at the expense of less-costly, more marketable vocational training is beyond the purview here. Instead, I wish to focus on the veritable legion of programs for repaying student loans which already exists -- and which are woefully under-reported by the media and our government spokespersons.

The largest and most potentially lucrative loan repayment source is the U.S. military. For certain enlisted jobs, up to $65,000 of student loans can be repaid (the maximum currently authorized by Congress). At this juncture only the active duty Army will allow that $65k maximum (for a three-year enlistment, 1/3 per year), but all the other branches except the Marines have some form of substantial loan repayment available (albeit usually for a four-year hitch): Army Reserves, $20,000; Air Force and Navy active duty and Reserves, $10,000; Air National Guard, $20,000.

Note that the qualifying jobs are generally shortage ones that require extensive training. In the Army, as of last week (when I spoke to a recruiter), the only slots that would pay back $65k in loans were 68A (Biomedical Equipment Specialist) and 68D (Operating Room Assistant). But either of those positions would translate well into a civilian health care job, and the aformentioned zoology majors with poor job prospects would probably find the training amenable. Other Army enlisted jobs that often qualify for substantial loan repayment are 35F (Intelligence Analyst) and 35M (Human Intelligence Collector) -- the latter of which usually are sent to Defense Language Institute in Monterey, CA, for extensive foreign language training.  Again, as with the zoology major and a medical field job, one would think an unemployed, debt-laden anthropology major would find such a prospect tantalizing, to say the least.

In addition to loan repayment, the Army, Navy, and Air Force offer the opportunity to save money for college or graduate school, via the Montgomery GI Bill, as well as various bonuses for certain jobs and/or possession of college credit.  (Caveat: the maximum monetary award to any individual is $65,000, and the GI Bill and loan repayment programs are mutually exclusive.)  For example, enlisting with a college degree in any field (even creative writing!) nets you a $5,000 bonus; having 60+ hours of college credit, $4,000; and over 30 hours, $3,000.