Blog No. 174

October 17, 2023

Fixing America – Idea 33

By Mack W. Borgen

University of California at Berkeley (Honors, Economics); Harvard Law School; National Award-Winning Author; 2023 Listee – Who’s Who in America.

Call Me Anytime

General Business Planning

or Corporate, Business or Real Property Law Matters

805-450-2602

—

Quick Facts 

A Glimpsing of the American Workforce and Work Practices

The most dominant change in American work habits over the last decade has unquestionably been the growth in the practice and expressed desirability of flexible or hybrid work.

Some New Buzzwords:

Coffee Badge:  The act of going into the office to “show face” for a few hours and then leaving work.

Polyworking:  Workers who have a second job or a “side hustle.”

Some data:

69%   Workers who believe their employer company is requiring them to work from the office due to traditional work expectations.

23%   Employees who changed companies in 2023.

33%   Workers who spend 1 hour to 1.5 hours a day commuting.

46%   Workers who are polyworking (i.e., with a side hustle) (and another 36% plan to start doing so in the future).

25%   Workers who would be willing to sacrifice 15% of their annual salary for flexible working hours.

58%    Hybrid workers who regularly “coffee badge.”

56%    Workers who feel their stress has increased in the last year.

94%    Workers who could be convinced to come to the office.

54%    Workers who believe that business trips have returned to a pre-pandemic level.

68%     Managers who believe that hybrid/remote working employees are missing out on impromptu or informal feedback.

From 41% to 66% – Increase in in-office workers between the years 2022 and 2023.

46%      3-days in the office: By far the most popular working style amongst hybrid  workers (46%).

Source: owllabs.com (“The State of Work 2023”).

“Fixing America” Series of Article

                Over the last three years, I have presented a wide range of ideas for “resetting” and “fixing” America. This blog presents Idea 33 in this his “Fixing America” series of articles.

Fixing America – Idea 33

Repayment of Student Loan Debt

Creation of Means for the Honorable Loan Repayment of Student Loan Debt — Rather Than Debt Cancellation

Background: The student debt problem in the United States is substantial. It is a problem for both the nation and the millions of individual student debtors and their families.

Starting with the GI Bill in 1944 and the National Defense Education Act of 1958, the U.S. government for many decades has assisted students finance their higher education in order to bolster our country’s economic independent and national security. However, student loan debt has grown enormously in recent years – in fact, it has doubled over the last two decades. Student loan debt now affects millions of U.S. families with 44 million U.S. borrowers aggregately owing about $1.6 trillion. In the U.S., only aggregate home mortgage debt ($12.0Trillion) is higher.

Over the last several years there have been multiple proposals to “forgive” substantial portions of these debts by legislation or Executive Order. However, in each instance they have faced fierce political and fiscal objections.

For many reasons – and especially because student loans are critical to assisting young Americans in getting such higher education, the elimination of student loans is not a real choice. Also because of the rapidly increasing cost of U.S. universities (tuition, housing, etc.), student loans will continue to be both necessary and advisable. However, this author suggests that loan forgiveness is not the best solution to the repayment difficulties faced by many young Americans. Indeed, there is a far better way.

The recommendation against mere loan forgiveness has at least three (3) easily identifiable reasons. First, such forgiveness would be offensive (and, de facto unfair) to the millions of students and their families who did pay off their student loans. Second, such forgiveness would send the dangerous and misleading life message that debts, once incurred, do not need to be repaid. Third, there exists an honorable means by which students can efficiently and fully pay off their student loans early in their career.

Idea: The federal government should allow all (or some substantial percentage of) student loans to be deemed “paid in full” upon the completion by the student borrower of X months or years of national public service. Military service should be deemed only one form of debt-paying qualifying service. Indeed, it should not – and need not – be the only manner in which young Americans can repay their debt by service. Upon graduation, students should be allowed to repay their student loans by volunteering for any number of national or state programs. Qualifying loan repayment programs could include service in AmeriCorps VISTA (originally established in 1965), the Peace Corps (originally established in 1961), or in a multitude of federal and/or state conservation, parks and national forest, or teaching or inner-city programs. An inspiring model for such public service is certainly the glorious Civilian Conservation Corps (the “CCC”) which existed from 1933 to 1942. This program was major part of FDR’s New Deal, and it supplied jobs and offered work relief to hundreds of thousands of young men (ages 18-28) during the depths of the Depression. Equally importantly, the CCC completed hundreds of amazing conservation and development projects in rural lands owned by the federal, state and local governments (structural improvements (e.g., bridges), transportation (e.g., truck trails and minor roads), erosion control (e.g., dams), flood control (e.g., irrigation and drainage), and on and on. Qualifying loan repayment public service programs can achieve similar results for this country.

The amount of student debt repayment achievable under a government service program as here proposed, could be calculated based upon matching repayment funds equal to all or a percentage of the individual’s salary.

America would benefit from the enhanced growth of these volunteer service programs, and the student debtors would benefit from not being burdened for years by substantial levels of student debt. To a degree, this could be viewed as a de facto form of compulsory national service. If it is so viewed, then this author believes that would be fine and honorable as well.

(NOTE: While it is beyond the scope of this article, the federal government should also aggressively scrutinize any student loans owed to for-profit universities. It has been reported that while only 10% of the defaulting students attended for-profit colleges, almost 40% of all student loan defaults were to “for-profit” attendees. Maybe this is not surprising – but it is tragic – that the schools with the highest amount of debt are “universities” like the University of Phoenix. Especially if the U.S. government is going to participate in a means for the honorable repayment of student debt, governmental review and scrutiny (and, if and as necessary, closure) of these “for-profit” institutions is critical.

Implementation: The implementation of this type of service repayment plan could be relatively simple. Much of the “repayment infrastructure” is already in place. First, wholly apart from 2- and 3- year military enlistment plans, many non-military community service programs already exist at both the federal, state, and even local level. All that would be required is for the U.S. government, in its capacity as the loan guarantor, (i) to review and select qualifying community service programs, and (ii) thereafter, to track student borrower services and to eliminate their student debt depending upon the length of their service in such qualifying programs. 

Authors Note: I have long advocated some form of compulsory governmental service (military or non-military) (Borgen, M. “Fixing America” Idea No. 9, Nov., 2019) and achieving this — while at the same time assisting our young students in their honorable repayment of their student debt — could be extremely beneficial for this country.

 Quotes for the Day 

Luck is when an opportunity comes along,

and you are prepared for it.

 –

Don’t judge each day by the harvest you reap,

But by the seeds that you plant.

Robert L. Stevenson

 My Most Recent Publication

GET YOUR COPY NOW

The White Binder (2022)

Get Your Personal and Estate Planning in Order

Detailed Personal Asset Distributions and Liability Management,

Estate Organization, and Disposition Planning

 –Order Today–

Just email me at mwborgen@live.com (Mailing Address and Number of Copies)

(Binder Format, $49.95 plus $6.95 Shipping, Pay After Delivery)   

Copyright 2023 by Mack W. Borgen. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, except in the case of brief quotations embedded in critical articles or reviews, without prior written permission by the author.