For the past couple years I have been following the increasing cost of higher education very closely. I despise having student loans, especially considering that my parents have stressed the importance of being debt-free.
Thankfully, I’ve been fortunate enough to work throughout college, and have managed to receive financial aid so I’ll graduate with about half of the thirty-thousand dollar debt figure released by the Project on Student Debt. I’m living at home, and saving money where I can. Sure, life isn’t as convenient as it could be, but sacrifices must be made.
Student Loans = Risk
With that being said, I firmly believe that student loans are stifling young entrepreneurs. Think about it, if you graduated with thirty-thousand dollars in debt and had several months to find a job before the loan grace period runs out, will you start your own company, or pursue a “less risky” alternative?
Many startup businesses require a personal up-front investment to begin generating income, and it can take months (or years) to start making a profit. President Obama has implemented some changes, enabling students to pay 10% of their discretionary income per payment. Although this is a decent start, I think much more should be done.
For example, Gen Y Capital Partners is eliminating student loans for entrepreneurs who are accepted to their program. That’s all private investment, and no taxpayer money is being used. On top of that, they will even pay up to two years for students who want to live on campus. As a student, that encourages me to pursue the life of an entrepreneur!
Where’s the Benefit?
I think it’s extremely important to recognize that successful entrepreneurs are a huge asset to higher education. In my opinion, higher education should be facilitating young entrepreneurs every chance they can. Why? Here’s a couple reasons below:
1. Marketing – Similar to a great athlete, a successful entrepreneur can gain national exposure. Just look at the publicity that the UMaine golf balls made from lobster shells generated earlier this year.
2. Alumni Contributions – Successful entrepreneurs give back. Considering the fact that alumni contributions continue to drop at schools nationwide, facilitating entrepreneurs can pay off in the long-term, both financially and with job opportunities for recent graduates.
I can’t imagine the publicity that a university could generate if they offer a business plan competition with the winner(s) receiving a free college education, in conjunction with capital to start their business. Sure, it’s an investment, but if Cindy Blodgett was paid over a hundred thousand dollars to stop coaching, couldn’t this be possible at a public university?
What are your thoughts? Or am I the only crazy one?