Saturday, March 9, 2013

A Real Stimulus Program


                                                                                                                         02/16/2012
                                                  A Real Stimulus Program

I looked at the legislation to see if the $5250 tuition reimbursement Program could be used to pay back a student loan. It can not! The legislation in the current form is to send current employees back to school for more training to help increase the productivity of the employee,and to help their current employer to be able to grow and compete with their competition.

There are several states that are using the tuition reimbursement program to pay back student loans on the state level right now. These states are bringing back motivated, highly qualified, and a younger work force back to their states. Maine and Rhode Island were smart enough to understand the student loan crisis and use it to help each other.
 
Now the question is what would need to be changed in the legislation to include student loans on the Federal level?

Student loans have surpassed $1trillon dollars and recent government figures show nearly 10% of borrowers of federal student loans had already defaulted within two years of starting repayment. Two-thirds of the national college class of 2011 finished school with loan debt; the average of $26,600 up 5% from the class before!

The statistics above do not include "For-Profit Schools".
I believe the "For-Profit Schools" are going to cause a bigger problem than our public institutions!

 Data from USA Today October 18, 2012:

The President talks about taking a percentage of income from the graduate to pay off student loan over the next 20 years? This will help but, it’s more a ban-aide. The above statistic show that this is a problem that has to be corrected quickly. 

 I think we would all agree the cost of college will continue to be more expensive year after year until the average American will not be able to afford college any longer.

Small to medium size companies can longer compete on a level playing field. The large corporations with their purchase power continually grow the distance between large and small companies.

I would like to give you an example in a small retailer:

This is a newer company that has 7 different boutique store concepts. Their budget for a new hire is $11 to $ 12 an hour or about $24,960 a year. A recent college graduate her degree; a major in fashion merchandising with a minor in marketing. This seems like the perfect fit? How does she pay back over $400 a month in student loans, pay for an apartment, car, groceries, electric etc…. Now if she can afford to pay all these bills and nothing is ever left. Her job performance is going to suffer because all she ever worries about is the “WHAT IF” the car breaks down etc….or worst yet she starts running up credit card debt!

Now we offer the small company the tax incentive $5250 tuition reimbursement to hire this graduate. Two things happen here; the smaller company now has the ability to grow, prosper, and be competitive. The graduate that before could only make $11-$12 an hour in a small company like this now has a way of paying his or her loan back and can grow with this company. Now this graduate has a chance to live the American Dream. Buy a house, a car etc…….

Is this not what a Stimulus Program is supposed to do?

I challenge each of you to think of another small to medium size business it that could grow much faster, prosper quicker, increase their work force, increase tax revenue, the very thing that tax credits or incentives are suppose to do. A couple of things come to mind; a young architectural firm, and up start computer company, let your imagination run wild.

Our economy is a mess and getting worse everyday. It time to think outside the box! It seems our Congress and President answer is always more loans.Don't we have enough debt already?

We give our large Corporations, Banks, and Wall Street all of these tax incentives and credits that only they benefit from??? I thought that tax incentive and credits were to help us as a whole nation not just a select few?