Student loan debt is a trillion dollar problem. Simultaneously, the military is facing a recruiting crisis that poses an extreme risk to our nation’s national security.
Student loan debt relief programs, such as the Army’s College Loan Repayment Program (LRP) act as an incentive for college students to consider military service as a route to help shoulder the burden of that debt in exchange for time and commitment to military service. Programs such as the LRP cover: Supplemental Loans for Students (SLS), Stafford Loans, Perkins Loans, William D. Ford Loans, and Consolidated Loans (incurred for the Soldier’s education). However, when it comes to Parent PLUS loans, they are only covered if they are in the servicemember’s name (i.e. you are a parent taking out loans on behalf your children).
Why is this a problem? Because there is a significant population of student loan borrowers who were dependents at the time of starting college and needed to have their parent(s) take out a PLUS loan to cover the tuition cost not covered by Direct Subsidized and Unsubsidized loans (which in many cases due to the soaring cost of tuition, is the bulk of the debt).
This essentially means that the LRP in its current form will not pay a single penny towards a large balance of high interest rate debt that a parent took out on behalf of their child who is a servicemember. The Post 9/11 GI Bill and ROTC scholarship cover the entire cost of college for servicemembers who have served before/during college, and yet those wanting to join the military after college are effectively punished by this oversight.
Personal anecdote: In 2023 I graduated with a Bachelor of Science in Computer Science. My undergraduate degree from a four-year university cost me approximately $80,000. Of that debt, I was only eligible for $28,250 in Direct Loans Subsidized and Unsubsidized. These loans are around a 5% interest rate whereas the remaining ~$52,000 of debt taken out by my parent (in agreement that I will repay the entirety of the loan after college) is sitting around a 9% interest rate. I will not refuse to pay this debt despite it not legally being in my name, as it is my responsibility to leave my family unburdened by my choice of higher education.
Upon the rude awakening of graduating into an extremely tight labor market where following around 1500 job applications over the course of a calendar year, I was unable to secure a full-time job as a software engineer. Desperate for a way to come up with a means to eliminate this debt soon to enter repayment at $1000/month (31% of my take-home pay of a low paying long-term internship I had at that time), I had looked into commissioning as an officer in the United States Army as a means to both serve my country and attain financial freedom. However, upon learning that the Parent PLUS loans borrowed on my behalf were ineligible, I recognized that from a financial perspective, it would be a poor financial decision to go this route because of the promise of higher pay in the private sector.
For millions of American families, this student debt crisis has become an unmanageable death spiral of modern-day debt slavery. The state of the labor market is extremely poor, following two years of mass layoffs, to the degree that President-elect Trump has dubbed it “Hurricane Kamala”. With no immediate sign of relief, due to consecutive months of minimal job growth in the jobs reports, many borrowers (myself included) have elected to pursue graduate level education to defer these loans for temporary relief of the unmanageable costs. However, this only pushes the problem somewhat into the future and more burdensome than before, as the capitalization of these high interest rate loans cause many young Americans to lose hope of ever being able to afford a home or start a family, as the tremendous debt, rising cost of living, and poor job economy make financial freedom seem impossible.
Therefore, in order to give American servicemembers the path to financial freedom they deserve, I propose:
-
The expansion of military student loan debt relief programs to include Parent PLUS loans borrowed on behalf of an active duty servicemember by their parent/guardian
-
An increase of the cap on military student loan repayment across ALL branches to the full loan balance based upon a variable amount of years of service (i.e. Army LRP currently pays 33 1/3% per year only up to $65,000, less taxes - so that cap would be removed for perhaps 20-25%/year of service)
-
The removal of taxation on any loan repayment money paid to the servicemember’s principal balance