Social Entrepreneurship, Public Service, and Student Debt

Every second, the national student debt balloon grows larger and larger. Student loans have far surpassed any other type of outstanding debt in America, and most people know someone that is struggling to balance their monthly payments with other basic life needs.

At the same time, students and recent graduates are in prime positions to make significant change to the world around us. Today's universities, with their access to the world's best academic experts and cutting edge technology, are breeding grounds for innovation.

So why is American entrepreneurship dying?

Many would say student debt is the culprit. The average recent grad is burdened with over $35,000 in loans, a figure that greatly influences decisions on where to live, when to get married, and what type of career to pursue. Starting a business may not be high on the priority list when you're living paycheck-to-paycheck.

The impact is even greater for graduate students looking to pursue a career in public service. The lower salaries of nonprofit and government workers is enough to deter many from applying to these jobs, even with incredibly beneficial federal debt relief programs like income-driven repayment plans and Public Service Loan Forgiveness. Recent grads may have their hearts set on public service work, but feel pressured to accept a higher-paying job in order to quickly start paying off their student loans.

With an increasing number of Americans postponing their public service careers, the burgeoning social entrepreneurship industry is bound to take a hit as well. Social entrepreneurs, for the uninitiated, are people who start nonprofits and businesses to create new solutions for pressing social problems.

It takes seed money to start these innovative organizations, but many budding social entrepreneurs have difficulty securing funding. Programs like Ashoka and Echoing Green financially assist social entrepreneurs during the start-up phase, though such opportunities are highly competitive (Echoing Green's acceptance rate is about 1%). Crippling student debt may also lead to a low credit score, which can result in an inability to secure a bank loan.

What are today's debt-ridden social entrepreneurs to do?

The first step is to take advantage of the aforementioned federal debt relief options. It is certainly possible to start a public service career while entering loan repayment, but it takes careful planning and knowledge of the Public Service Loan Forgiveness program. It's also important to note that income-driven repayment plans are available to everyone, regardless of career type. Since it's based mostly on income, these plans will be a great safety net for those interested in starting their own public service organization.

Some social entrepreneurs are using crowdfunding platforms like Kickstarter, GoFundMe, and IndieGoGo to secure seed funding. The platforms Funding Circle and the SoFi Entrepreneurship Program were created specifically for small businesses, and focus on helping owners overcome student debt burdens to achieve their dreams.

Millennial recent graduates are open-minded, independent, and tech-savvy thinkers - all the makings of a great entrepreneur. Student debt crisis aside, it takes a lot of courage to strike out on your own and build a new business or nonprofit. With the right financial planning and research, it's not such a far-fetched dream.

Equal Justice Works can help you out with some of that planning - we host monthly webinars on student debt relief options, and also have a free student debt e-book available for download. Don't let your student debt stand in the way of your goals!

Ashley Matthews is a Program Manager for Law School Engagement & Advocacy, managing the Student Debt and Student Engagement programs. Prior to joining Equal Justice Works, she worked as Communications Manager for Legal Services Corporation, where she helped design strategies to increase congressional awareness of federally funded civil legal aid. She also led the digital content and communications team for, a public service initiative of the National Association for Law Placement (NALP). Ashley received her J.D. from the University of Miami School of Law.