Shutting the Money Trap

It’s time that the U.S. government and universities work together to help students to give back. In March of this year, Harvard Law School announced a new program to waive tuition for third year students who spend five years working for nonprofit organizations or the government. Though the program received little press coverage, it merits a great deal of praise since not all roads should lead to lucrative private sector jobs. Programs like these are an important step towards eliminating a socioeconomic barrier to entry for public service. Significantly, it also incentivizes the best and the brightest to consider non-profit options right out of school.

Since the late 1980s, several elite law schools have instituted similar—though less extensive—Public Service Loan Repayment Programs (PSLRPs) that help graduates repay educational loans if they pursue a public service career. The percentage of debt repaid by the university varies based on the loan interest rate and salary earned by the student, and the specifics of each program differ from school to school. Nonetheless, all of these programs help to ensure that debt will not dictate the career choices of students by encouraging graduates to pursue nonprofit careers.

Given the obvious merits of such programs, similar models should be instituted at undergraduate institutions. Elite colleges with large endowments have already taken measures to address the problem of student debt by moving from student loans to student grants in 1998—an initiative led by Princeton. Consequently, Princeton and Harvard, as two of the few need-blind institutions, no longer have many students graduating with large debts. However, student loans are the only form of financial aid available for hundreds of other American colleges, where students continue to graduate with an exorbitant amount of debt. In fact, between 1997 and 2002, the average undergraduate debt rose from $11,400 to $18,900. Since then, the amount of debt which students graduate with has continued to rise, significantly faster than the rate of inflation. For a student graduating with more than $20,000 of debt, a public service career is not a viable option. This is the very barrier that PSLRPs for undergraduates would seek to topple.

Similar efforts have been made in the past. The Truman Scholarship, for example, has been working towards this goal by awarding scholarships to over 2,000 students who plan to pursue graduate studies in public service. Since the scholarship’s inception in 1977, it has granted over $40 million to Truman Scholars. Yet, there is a limit to the amount of grants that can be given all in all. Harvard has already increased financial aid resources tremendously and most universities are in no position to follow suit. As a result, a system of loans would enable universities to help more students than the select few who receive scholarships and fellowships.

Beyond the obvious benefits to students, such an initiative would benefit the public service and nonprofit employers, including, of course, the US government. According to a New York Times article from 2006, the United States will need to recruit two million new teachers in the next few years to fill our growing classrooms. With this challenge in mind, in 2004, Congress attempted to institute “debt forgiveness on new student loans to help recruit more math, science and special ed teachers to underserved areas.” Similarly, a number of states—like New York—have added various incentives to the same effect. However, neither of these steps has worked to address the crux of the teacher-shortage issue. Given that student debt is “unmanageable” for 38 percent of aspiring teachers and 55 percent of aspiring social workers, all existing federal and local loan programs fall short. Larger, university-funded PSLRPs targeted specifically at those entering public service careers, are the answer.

A similar model has spread to other graduate programs, such as medical schools. In 2002, Congress agreed to finance a loan-repayment system through the National Institutes of Health designed to encourage physicians and scientists to work at public hospitals and research facilities, forgoing private practice. Large salary differentials between the public and private sectors, causing a dearth of medical and scientific researchers, prompted this initiative. Like law school PSLRPs, the National Institutes of Health’s program enables medical students to enter the public service realm by reducing debt upon graduation.

Still, no such program exists on a wide-scale basis for undergraduates. Regardless of the ultimate details of such a program, the need for a public service specific loan-repayment program is clear. It would enable students to pursue their ideal career without worrying about the monetary implications of the decision. Perhaps more importantly, it may even encourage students to take two years off and do charitable work before entering the for-profit workforce. Ultimately, it would allow some of our most crucial social institutions to have intelligent, motivated and driven college-graduates in their ranks.


Katherine C. Harris ’10, a Crimson editorial editor, is a history concentrator in Pforzheimer House.