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He said: "In our bailouts we didn't help the universities, we gave money to some dying industries, but not to the industries of the future, including higher education."
"Those graduating from college or high right now are facing a very tough job market. They are not eligible for unemployment insurance, they are caught in between."
Stiglitz added that those who are in school or training are usually eligible for some form of benefits in Europe, something the US could implement.
He also thinks the US would have to at some point reduce the burden of student debt.
"Australia has a very good system based on Income Contingent Loans where the amount paid is related to your income and even after 20 years if you made the choice to go into [low paid sector] then they forgive the loan," he said.
Stiglitz added: "These are valuable years which you shouldn't be wasting feeling disconnected or resentful, I would put a high priority on that type of a programme."
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