Amid the buzz about the economic stimulus plan brewing in the nation’s capital, young professionals may be inclined to ask where their bailout is. With the House of Representatives’ recent approval of the president’s bill and pending Senate discussions drawing near, it’s possible that young workers may get their financial wishes after all.
The House passed its version of the package, totaling $819 billion, on Jan. 28. Among the most appealing provision for college students is the “American Opportunity” education tax credit for 2009 and 2010. The measure includes a $2,500 credit for tuition and expenses. In addition, an increase in the income limitations would mean that more taxpayers would be eligible to receive this education credit. The credit is not applicable, however, to pay tuition sustained before this year.
The more encompassing “Making Work Pay” credit was also included in the House-approved bill. The tax credit, which would be available to 95% of working individuals and families, would come in the form of a direct deduction in income taxes, explains a committee spokesman from the U.S. House Committee on Ways and Means. “Simply put, workers will receive more money in their paycheck each pay period. Workers will receive up to $500 in 2009 and up to $500 in 2010,” the spokesman says. “Up to $1000 in the case of married filing jointly.”
Young professionals who are still on the market for a job may find that the plan will also ease some of their unemployment and underemployment woes. “Economic Advisors to President Obama and leading economists have estimated the provisions in this package will create or save 3-4 million jobs nationwide in a broad range of occupations, including new jobs in health information technology and renewable energy production,” the spokesman says.
This plan comes not a moment too soon for students and recent graduates about to enter the workforce. Because of tough economic times, these constituents have more difficulty trying to handle education-related debt and living expenses.
Ashleigh Gregory, for example, is a May 2008 graduate of Spelman College who is now an elementary school teacher for Miami-Dade County Public Schools. Gregory got the job after joining Miami Teaching Fellows after graduation. "It’s hard to find a job being fresh out of school. You either need experience or you need to go back to school, but I was in no way ready to go back to school right after graduation," she says.
Like many college graduates, her most pressing financial obligation is to pay back the student loans she has already incurred. In order to reduce her educational debt, Gregory took a second job at the front desk of a Hyatt Regency Hotel. "Of course if you mess up on your student loans, your credit is out the window," she says.
Like Gregory, Florida A&M University graduate student Chatney Spencer also worries about paying for school. Spencer, who plans to go to medical school after receiving her Master’s degree in chemistry, is trying to figure out how she will pay for that medical degree. "I’m hoping I can get another scholarship," she says. "And I’m considering going into the Air Force. You get hands-on training, and you would just owe them the years that they funded for your education."
Young professionals who graduated before the recession may have escaped job market uncertainty, but they still have financial concerns. “After graduation, I quickly realized what it would take to support myself,” says Chris Stephens, a May 2007 graduate of Georgia Southern University. Stephens now works as an account executive for the Atlanta Dream WNBA team. “With a job position slightly above entry level and in the pro sports industry, these financial concerns are never far from my thoughts,” he adds.
Whether current student or recent graduate, members of Generation Y have a unique stake in how the stimulus plan will pan out. Giving their input, these three young professionals reflect the concerns of their peers.
Spencer hopes that banks will be better able to help their patrons. "If I can’t get a loan, how can I go to medical school?” she wonders. In the mean time, Gregory has expectations of her own. “I would push for some kind of tax cut for people who are paying back student loans," she says.
Stephens expressed his own concerns for the financial well being of the country as a whole. “It seems we are creating debt to pay debt,” he says. “I will only feel hopeful about these stimulus plans when we can publicly track where the money is being spent.”
The Senate is expected to work on its own version of the legislation during the first week of February, and the bill is still on track to be completed by the middle of the month. If all goes well during the Senate’s discussions, these young professionals—as well as their peers—may see their wishes come true.