The individuals I spoke to explained their struggles with cash flow, and how helpless they felt as available startup and operating funds were siphoned off to pay loan debt. Fearing default, since such debt is inescapable even in bankruptcy, some are working part-time jobs as progress in their entrepreneurial ventures slow.
There is a lot that can be done to help young entrepreneurs manage college loan debt, and as I explained to students, this is perfect time to make their voices heard about initiatives such as the student loan forgiveness and deferment programs presented in the Youth Entrepreneurship Act as we approach the 2012 election.
While existing programs such as the SBA's Student Startup Plan (recently announced alongside reforms to Income-Based Repayment) and Gen Y Capital Partners will help a portion of the young entrepreneur population responsibly pay down its debts while they build their businesses, more reforms are needed. Defaulting on a student loan should not have the ability to ruin the rest of a potential job creator’s financial life. Under Income-Based Repayment (created under President Bush and reformed by President Obama), program subscribers who go into public service, have their loans forgiven after 10 years. Why is this not available to entrepreneurs who create jobs, rather than take them? These are the sorts of questions I was asked at the White House, and undoubtedly, they will be echoed again during the upcoming presidential election.
In a time when America is in desperate need of economic recovery, our nation cannot afford for any willing entrepreneurial group to be sidelined; especially not our most educated. Before we begin the typical back-and-forth political banter about student loan forgiveness deferment programs, we need to think about this: Setting this generation back will not just hamper 20-somethings from starting businesses today, but rather, it will also have a drastic impact on the 30-, 40-, and 50-something job creators of tomorrow. Our nation's long-term economic recovery will depend heavily on our ability to activate countless numbers of new business owners. Stifling them now will have dire long-term consequences, whether your child (or grandchild) is an entrepreneur or not.
The Young Entrepreneur Council is a peer-to-peer mentorship organization founded by Scott Gerber in 2010. The YEC promotes entrepeneurship as a solution to youth unemployment and underenmployment, and provides its members with access to tools, mentorship and resources that support each stage of a business's development and growth.