Opportunity Knocks in the Form of Student Loan Relief
The White House and the Biden Administration recently announced plans to provide relief for nearly 43 million student loan borrowers, including about 20 million whose debt will be wiped clean. This unprecedented debt forgiveness represents one of the best opportunities for the nonprofit sector to enhance their donor pipeline.
Over the last decade in the nonprofit sector, everyone… and I mean everyone has all been trying to solve the same million-dollar question; why is the donor count declining? In 2002 the percentage of US households giving to some form of charitable organization was 67.6%, two decades later than percentage is now 56%. The exact numbers vary based on the reporting service, but the trend is clear. Una Osili, the Associate Dean for Research and International Programs at the Lily School for Philanthropy at Indiana University “suggests this is, in part, because the Great Recession made it difficult for some younger Americans to establish a habit of giving. The study found only about a third of households headed by someone under the age of 40 gave to charity in 2018.” The Lily School publishes its research and findings every year and monitors trends closely.
It is also no secret that transfer of wealth and the prevalence of upward mobility has been somewhat stalled in America. In the 1940’s it was a near certainty (over 90%) that a child would grow up to earn more than their parents. That number has steadily declined, and now a child born in the 1980’s has only a 50% chance of achieving this long-monitored benchmark. This depends heavily on a variety of factors studied heavily by the Economic Innovation Group and The Social Capital Atlas, but the fact remains, it is less likely now than ever that a young adult is in a more advantageous situation than one’s parents.
Ages 25-34 and ages 35-49 represent the two biggest groups of people who hold any amount of student loans. A group who nonprofits have struggled to reach consistently, perhaps because they feel weighed down, by debt, or because they simply don’t have enough to give.
Some estimates show there are 20 million Americans out there earning less than $125,000 who will have their student loans forgiven entirely, and who will get back between 10%-20% of their expendable income. There are also 23 million more who will receive some kind of relief paired with lower monthly payments. This represents potentially millions of new donors available to the nonprofit sector if organizations are able to position themselves in front of these demographics in a way that is relatable and approachable.
If you are one of those out there who will be receiving relief from student loans, consider paying it forward. As long as equitable access to higher education is still an issue. Organizations like College Possible, iMentor and Equal Opportunity Schools have reputations spanning decades of providing access to opportunities in higher education for those who normally would not have access. Additionally, vocational schools and skilled trade workers are notably missing from this plan and discussion. “An aging workforce, emerging new technologies, and continuing decline of trades in high schools and community colleges will result in an estimated two million unfilled manufacturing jobs in the U.S. over the next ten years.” (Jane Addams Resource Corporation (JARC)) Local organizations like JARC in Chicago and Baltimore are working to create viable alternative career paths that do not necessitate a college degree. Seek out your local vocational school, nonprofit or otherwise, and learn how you can support.
