The Biden-Harris student loan plan has been both praised and hammered. For some of the 48 million Americans burdened with $1.8 trillion in student debt, the initiative is a long-awaited way to provide credit-crushing debt relief. But for many who have managed to repay their student loans, the plan is an unfair taxpayer-funded giveaway.
From all angles, the student debt cancellation program is a missed opportunity. A different approach to this calamity could have relieved borrowers and simultaneously helped solve another national problem. And it could still happen if a court ultimately strikes down the program.
While unpaid student loans have increased, volunteering in the United States has seen a downturn. Since 2008, there has been an annual decline in the number of adults willing to volunteer time to meet the unmet needs of underserved people, a deteriorating environment and neglected animals.
Instead of giving student loan holders what some critics consider a free lunch, a more productive option would be to offer borrowers a way to “volunteer” out of debt. The Bureau of Labor Statistics values each volunteer hour at about $29. Got an outstanding student loan of $10,000? In three years, that financial dark cloud largely disappears if you volunteer two hours a week for a qualified nonprofit organization.
Here’s what it would take to make this plan work:
• Use qualified nonprofit organizations. To obtain loan compensation, volunteer time should be provided to 501(c)(3) nonprofit organizations that address high-priority social challenges. Qualified organizations should also demonstrate that they can effectively use donated time and talent. It is estimated that only about half of the more than one million nonprofit organizations in the country fall into the “willing to volunteer” category.
• Match volunteers to critical needs. A daunting task? Not really. Many volunteers already prefer to give their time to organizations struggling with serious community issues. The main causes that attract volunteers today are: (1) hunger; (2) homelessness; (3) health/wellness; (4) faith and spirituality; (5) animal welfare; (6) children/youth; (7) environment; (8) environment/conservation. For qualified nonprofits active in one of these categories, adding volunteers could make a significant difference.
• Capitalize on the demographics of loan holders. It’s not the crowd that just graduated college struggling with unpaid loans. More than 22 million Americans aged 35 and over must pay over $1 trillion in student loans. To get the most out of volunteers, qualified nonprofit organizations should consider age, experience, and physical and mental fitness along with other factors when determining how to get the most out of donated hours. .
• Rely on an established lending platform. “Here we go again…another federal mess” is a predictable reaction to this alternative loan forgiveness proposal. No doubt the plan would require certifying nonprofits, validating volunteer hours, adjusting outstanding loan amounts based on donated hours, and more. Bureaucracy is always an imminent threat to any national business. But the federal government could build on another loan forgiveness plan already in place – the Civil Service Loan Forgiveness Program, which forgives some civil servants’ student debt after 10 years of on-time service. full. The program has had some hiccups, but it has made a difference for many of the 1.3 million teachers, firefighters, nurses and other program participants.
Such a program could appear as a thinly disguised forced labor program. But it could be offered as an option. Volunteer or continue to pay principal and interest on your loan (usually around $300 per month for five to 20 years).
The ‘volunteering instead’ alternative would bring additional benefits to both the loan holder and society as a whole. Studies have shown that volunteering has a positive impact on the emotional, mental and physical health of individuals. Since the gift of time also often leads to greater civic engagement, the result could be a healthier, safer, and more inclusive America.
Sometimes a solution to one problem relies on a solution to another.
Curt Weeden of Mount Pleasant founded Georgetown University’s New Strategies Program and the Association of Professionals in Corporate Citizenship and is a retired vice president of Johnson & Johnson.