Stupid Idea: The Gap Year Savings Plan.
May 28, 2009 – 10:25 pmProblem: Post-college gap years are great opportunities for young people to pursue their passions, exercise their newly developed self-directed learning abilities, and find ways to contribute to the world. They’re tough to bootstrap up, though – you’ve got to find ways to minimize the startup costs (in money, time, or otherwise) enough that you’ll be able to gather sufficient resources to do it. A lot of folks who’d benefit from a gap year find themselves unable to take it because their dream plans don’t match up with their available resources.
I was lucky enough to know I wanted to save for a gap year starting my freshman year of college, managed to work and save enough to take one, had it in mind all four years of undergrad as an option I should plan for, and… it is the best investment that I’ve ever made in terms of dollars-to-magnitude-of-life-changing-impact. Some of my friends saw that, followed, and likewise had a phenomenal experience. What if other people were made aware of the possibility that they could do the same? How do you do that without taking away the autonomy that makes a gap year truly yours?
Proposal: A program that consists of a linked set of 4 4-year CDs (or something else that’s stable with a fixed term and a guaranteed high interest rate… bonds?) into which you put $250 a month, every month, each year you are an undergraduate. That’s less than $10 a day. (Perhaps you could also hook them up with jobs which they could earn and save that much doing.) Assuming that the CDs average interest rate over those 4 years beats inflation, you’ll be able to draw a monthly stipend equivalent to $1000 of today’s dollars for a year after you graduate while doing Whatever The Heck You Want.
What happens to the interest generated that doesn’t go into beating inflation? That goes to fund the rest of the program, which provides bi-annual coaching sessions (with gap year alumni) and access to networks and directories of gap year opportunities plus a support network during the actual gap year and some followup afterwards. These networks will be open to the public, but the assumption is that people may be more willing to make a risky investment in a relatively unproven young person if there’s a coaching/support network in place to raise their chances of success.
Okay. That’s the idea; it’s very naive. Now tell me why this won’t work; I’m sure there’s something missing. (Or maybe there’s a better solution, too.)
4 Responses to “Stupid Idea: The Gap Year Savings Plan.”
Hell yes. I wish that I had been able to do the same, and having that idea presented to me early, probably by someone who had done it and could tell me what they did and why it was awesome, would be great. Obviously, it could also scale. For those who can’t afford $250 a month while in undergrad, a lower stipend at the other end could be enough for them to live in a low-income part of a cheap city and volunteer teach for a year. For people who would need a larger income to support hefty travel or more expensive activities, their initial monthly input could be greater. I wouldn’t be surprised if there were ways to get this corporately funded, too, with money and services (i.e. airline discounts, hostel discounts, “Care packages” of products to support people with essentials that then inspire brand loyalty). Let me get a job and I would love to help you put this together.
By Andrew on May 29, 2009
Why this won’t work: that “perhaps you could hook them up with jobs which they could earn and save that much doing” caveat. Considering Olin pay rates, that would put a freshman working nine hours a week and a senior working seven and-a-half, assuming they don’t pay any taxes or spend more than $2 a week. (The validity of even these assumptions rests on the student not needing to pay for any of tuition, room, board, books, etc.) And to get a job that pays higher than Olin rates generally requires either a vehicle or use of public transportation, either of which cost more money and subtract additional amounts of usable time.
I don’t think that’s actually a reasonable assumption for most college students, though I know many of us are in a low tax bracket. This also requires all students to have an extra 7-9 hours per week that could be put towards earning this money, which for many is sufficient burden to impact their classwork.
This also requires them to more than break even during all summers and breaks, reducing opportunities for other enlightening travel/programs/volunteerism.
By Bonnie on May 29, 2009
I funded my gap year savings pool by working multiple simultaneous jobs ~15 hours a week every semester while I was at Olin (excepting 1st semester freshman year, when they won’t let you work). I usually had a maxed-out courseload, 2-3 jobs (all on-campus jobs at the low student payrate), and then the extracurricular stuff like running the campus paper would start…
It was tough, but not unbearable. Granted, I had scholarships that kept me from having to worry about student debt, which was a huge help. (And granted, I tend to be more masochistic and sleep less than the average student, perhaps.)
There’s got to be a way to set money aside, though; once you need to make something happen, it becomes a lot more possible. Matching corporate donations? Minigrants?
Perhaps a broader way of phrasing it is that I want to get people thinking about what they want to make happen, what they want to do, without immediately dismissing it as something impossible to be indefinitely deferred – and then we’ll worry about making it possible, and whittling things down to bootstrappable size if needed.
By Mel on May 30, 2009
Oh – and I should note I did work summers and more than break even – not because I earned a lot (I averaged about $10/h) but because I lived cheaply and saved up. Generally speaking, I try to save at least half of what I earn – going out for movies/dinners/drinks, buying shiny new technologies and books, and suchlike occasionally bowed to the longer-term goal of I Want A Gap Year.
Again, it helped that I didn’t have debt to pay off… which was partly from my decision not to spend and get myself into unnecessary debt, and partly being extremely lucky to get an awesome scholarship that meant I didn’t have to take on “necessary”* debt.
*well, okay, “educational.”
By Mel on May 30, 2009