The total amount of student debt surpassed the total amount of credit card debt in 2010, and the amount of all auto loans last year. That comes out to an average of more than $25,000 per graduate. On the human rather than statistical level, that means a host of horrific stories of recent grads saddled with humungous monthly payments at the very start of their careers.
These options may work for a few incredibly talented and driven individuals, but they're highly risky and limited. Is there another solution to bridge the gap between high school and starting a business for more entrepreneurially minded young people? Virgin founder Richard Branson, himself a famous nongraduate, offered a suggestion while speaking recently at Salesforce's Dreamforce event in San Francisco.
In the U.K, I have been lobbying the government to do entrepreneurial loans instead of student loans...For some people it’s much better to just get out in the real world and say, “Screw it. Let's do it,” and give it a go. You learn so much from being in the jungle and building a business from scratch.
The best way of learning about anything is by doing.
Here's the complete hour-long video of the interview if you're interested in the deep dive into Branson's remarks:
This means implementing entrepreneurial loans in the U.K. would probably work much differently than any such scheme in the United States. But in both countries the case could be made that smaller amounts of debt given as entrepreneurial loans could help recipients earn more money more quickly than traditional student loans.
Do you think entrepreneurial loans could be part of the solution to the U.S. student-loan problem?
JESSICA STILLMAN is a freelance writer based in London with interests in unconventional career paths, generational differences, and the future of work. She has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist. @EntryLevelRebel