Few To Benefit From Public Service Loan Forgiveness (PSLF) Program

Back in 2008, I wrote a quite critical rundown of the College Cost Reduction and Access Act of 2007 noting that, in a nutshell, it comes nowhere near addressing the astronomically rising costs of attending college.

I'll also note that the student loan experience is personal for me, as well. I'm the first in my immediate family to have received a 4-year college degree and had zero financial assistance from my family in doing so. Almost two decades after attending college and grad school, I'm still making monthly payments on my student loans.

The College Cost Reduction and Access Act included a benefit for those who work in public service. To summarize, someone who makes monthly payments, while on the correct payment plan, for 10 years while working in full-time public service as defined by the US Department of Education, can have the balance of their federal loans forgiven.

In 2008, I noted:

"In addition, your loans must be what are called federal 'Direct Loans' held by the Department of Education. Private loans, which have higher interest rates than federal loans, are not eligible for forgiveness....

In addition, this provision does nothing to reward those who have already been working in public service. For people who, for instance, have been working at a nonprofit while paying down their loans for say the past 8 years, their years of public service for purposes of this loan forgiveness provision will still begin in 2007, just as a new graduate's will. Then after 120 payments beginning in 2007, any student loan debt that is remaining will be forgiven."

I knew then that it would be difficult for many people to remain eligible for this benefit. For one, public service salaries tend to be much lower than private sector salaries, which means if someone is working in the public sector with a huge student loan debt, it can be difficult to make ends meet or to meet other life milestones a person might also want to meet, such as buying a house and/or starting a family.

Also, as detailed in an important Mother Jones piece (worth reading in its entirety), many borrowers run into barriers with federal loan administrators, who often make mistakes, give conflicting information, and miscount payments, but are rarely held accountable. So that now, the current situation is as follows:

"October 2017 should have been a moment for celebration for those sunk by debt—it was the first time a cohort of PSLF participants, after 10 years of payments, could be forgiven. Yet of almost 900,000 people who have submitted at least one payment to the PSLF program and FedLoan since 2012, the Education Department expects fewer than 1,000 to be forgiven by the end of its fiscal year. The reasons for these astonishingly dismal statistics are myriad, but one fact is clear: A decade after McIlvaine and scores of others began paying into the program, many are only barely closer to their goal of being debt-free. And some are even more in debt than when they started."

Despite how difficult it already is for borrowers to benefit from the PSLF, the Trump Republican Administration wants to get rid of it.

As the Mother Jones piece details, Republican policy around tuition is grounded in a philosophy wherein college students have a "personal responsibility" to assume the risk of taking on massive debt for a college degree.

All in all, it's a real win for Jill Stein voters in the 2016 election. She trashed Donald Trump's opponent for months and promised the cancellation of student debt altogether, so now nobody's getting anything even remotely close to that!