President Donald Trump’s 2018 budget eliminates a student loan program that wipes away education debt for some students who go to work as police officers, nurses or in other public service jobs. That’s bad news for a program that has been generally successful and is popular. The good news is that loans will be paid off for more than half a million current beneficiaries.
President Donald Trump’s 2018 budget eliminates a student loan program that wipes away education debt for some students who go to work as police officers, nurses or in other public service jobs. That’s bad news for a program that has been generally successful and is popular. The good news is that loans will be paid off for more than half a million current beneficiaries.
The White House budget released in May calling for the end of the Public Service Loan Forgiveness program raised alarm for students who are on their way to having their loans forgiven. But education officials have since clarified that the president’s proposal only affects people who take out the loans on July 1, 2018, or later.
Among uncertainties about the program is whether borrowers will have to renegotiate their loans to receive forgiveness, or if their current loan terms will suffice. The Consumer Financial Protection Bureau reports that some borrowers have filed complaints about loan-servicing companies delaying or denying them access to loan forgiveness due to incorrect or insufficient information about their loans.
A path to a debt-free future for teachers, nurses, first responders and other public servants is an excellent concept. Administrative problems making it difficult for borrowers to participate should be fixed, but let’s keep the program.
The CFPB has issued guidelines to try to fix problems loan-servicing companies are having.
The program began in 2007 under President George W. Bush and expanded under President Barack Obama.
To qualify, a borrower must make 10 years of loan payments and be employed in a public service job.
Payments for the first group of beneficiaries is due to begin in October. Government estimates show that a fourth of the nation’s public sector workers could be eligible. Repaying their loans could add up to more than $100 billion.
With that figure looming, the program became an obvious target for Trump’s budget-cutters, but may not survive congressional scrutiny. Trump has proposed a less generous program available to graduates regardless of their jobs. Unfortunately, that won’t help the goal of encouraging students to work in government or nonprofit public service.
The program helped get college graduates to accept low-paying public service jobs in exchange for having their educational loans paid off. Many have discovered fulfilling careers they would not have found otherwise.
This is an area where a scalpel is needed, not a hatchet.
— St. Louis Post-Dispatch