A few months after Eli Williamson returned from his deployment to Iraq in 2004, his college loan officer called. Scrape together $2,200 in 20 days, the officer said, or default on the loan.
While attending Luther College in Iowa, Williamson and childhood friend Roy Brown joined the Army Reserves. Both served deployments in Iraq. The friends racked up student loans because the G.I. Bill wouldn’t cover everything.
Because Williamson was active duty, having bad credit could cost him his security clearance and his military career. He earned money by playing his guitar on the streets in northern California.
“This was kind of ridiculous,” Williamson said. “We both served our country.”
Even though military programs like the G.I. Bill are supposed to help soldiers pay for college, loopholes can force veterans to take on student loans. Four panelists this week discussed the veteran student loan debt before the Senate Committee on Banking, Housing, and Urban Affairs. They addressed how conflicting rules confuse many students, and how the government should—or should not—intervene.
Will Hubbard with Student Veterans of America (SVA) told senators the G.I. Bill has enabled some young veterans to buy houses. But when others default on their loan payments and lose their clearance, the military also loses trained employees. “That is a direct impact to the national security of the United States,” Hubbard said.
After their experiences, Williamson and Brown co-founded Leave No Veteran Behind, a scholarship program that helps deserving soldiers pay off student loans. The nonprofit uses private donations to settle the debt while veterans do community service—one veteran they helped set up a gang violence policing program for Chicago youth.
The veterans who apply to the scholarship write letters explaining their situations. Williamson is using these letters to develop a study with SVA and the Ford Foundation about the effects of student loan debt. Many could not buy houses and improve financially because of their loans.
Hubbard recommended the government provide veterans refinancing options and streamline current student loan repayment programs for enlisting service members. The government does not pay student loans in one bulk sum, so it ends up paying interest over several years.
“It’s not a very effective program,” Williamson said.
Not all agree that more government intervention is the answer. Heritage Foundation educational fellow Lindsey Burke testified that government subsidies do little to help students escape debt.
“Subsidies shift the responsibility of paying for college from the student to the taxpayer,” Burke said.
Instead, the government should cut back on higher education spending, be up-front about the real cost of federal loans, and separate debt financing from school accreditation, Burke said.
Some veterans still find the current system helpful. Navy Reserve Lt. Haraz Ghanbari graduated from Kent State University with less than $5,000 in debt because he used military scholarships and programs. After getting a full-time job as a photojournalist, he paid off the debt in less than a year. Now, as the military liaison at the University of Toledo, he advises roughly 400 student service members. He recommends military students seek scholarships, get involved in their communities, and work.
“The resources are there,” he said. “Nothing is necessarily free in life. Sometimes you’ve got to make a sacrifice.”