A National Service Corps Can Solve the Student Loan Crisis

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Suddenly, and finally, everywhere we turn somebody is talking about the student debt disaster. Headlines scream it. The presidential campaigns are beginning to seriously talk about it. Congress is starting to focus on it, well….as only Congress does. Last week, once again demonstrating its ability to turn a simple box into a Rubik's Cube, in two separate votes a majority of Democrats and Republicans rejected each other's proposals to extend the low 3.4% rate on many student loans that expires in July.

While the extension would help a lot of struggling Americans, it is little more than trying to suspend a pup tent over a crater. It's time to stop applying Band-Aids to this gaping hole in the body politic. One meaningful solution is a new National Service Corps.

Our banking culture has coaxed the last few generations of students into a false sense of security around the affordability of a college education. A new caste system emerged with the majority of our future workforces willingly entering into indentured scholarship to get a shot at the American dream.

With more dough loosened up via Federal guarantees, tuition rose in an institutional money grab that, even adjusted for inflation, is insane. For-profit colleges pushed loans that rivaled the marketing efforts of reverse mortgages and penny stocks. From 1978 to 2008, the cost of college education increased at more than triple the rate of inflation. Meanwhile, government aid to institutions of higher learning has nosedived in recent years.

The system of higher education in America is broken. That much is certain. But how could a National Service Corps fix this very complicated problem? The mandate is daunting: end the student loan crisis by shining a light on the dangers of skyrocketing student loan burdens while providing a framework to exert downward pressure on the cost of tuition with a workable alternative.

It starts with a change in mentality. People need to stop thinking of college as something they borrow for, and start thinking of it as something they work and save for. A National Service Corps could be the catalyst we need. The G.I. Bill worked in post-World War II America, in part because tuitions were so much more reasonable then, but also because people worked for it. I imagine an NSC that is part employment agency/part vehicle for personal growth and contributing to society.

The National Service Corps would be an umbrella organization that routes people to areas of service that best suits their personal interests and skill sets. People could serve before, during or after college. It would not be mandatory, but it should provide enough incentive for people to want to do it. For roughly each year of service, the NSC would provide participants with the necessary funds to cover one year of tuition, room, board and fees at any public university, or comparably priced trade school (in addition to a modest salary). The amount could also be applied to the tuition at more expensive private universities, though I'd like to see the private universities give NSC participants a tuition break. If you don't participate in National Service, and attend college right out of high school, it is appropriate for you to pay more, in order to keep tuition manageable for students receiving NSC subsidies.

[Related Article: For Middle-Age Students, Is College Worth the Risk?]

In terms of the types of service people could do. I envision the following:

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