by Ashley
Has anyone seen this news story floating around the interwebs?
The headline reads: “Trump to Propose Scrapping Beleaguered Student Loan Forgiveness Program.” It’s got a big picture of Betsy DeVos face floating around with the headline.
In the story, reporter Jillian Berman discusses how a leaked education budget shows plans to eventually chop the Public Service Loan Forgiveness program (PSLF). Its not a sure thing. The budget plans are not yet finalized and, even if they were, it would require Congress’ approval.
I’ve seen lots of panic and political drama surrounding it on Facebook. My mom tagged me in one such post to get my thoughts on the issue.
And here I am, sitting on the sidelines. I graduated with nearly $100,000 in student loan debt (now sitting right at $65,000 – latest debt update here). I’m taking the position that I’ve never wanted to depend on any of the government loan forgiveness programs. For many years – long before Trump took the presidency and appointed Betsy DeVos as Secretary of Education – I’ve been saying that I didn’t trust these government programs. I’ve always maintained the position that I don’t want to depend on the government and that the PSLF program (or any of the loan forgiveness programs) could ultimately just disappear one day. I don’t want to make major career decisions on the basis that I need to go into this field or work for that sector in order to qualify for PSLF because WHAT IF the program ends up discontinued?? Then what? Where would that leave me? Up shit creek with no paddle, that’s where!!!
Instead, I personally have always taken the view that I just want to PAY OFF my loans as quickly as possible. Don’t get me wrong – I have nothing against the loan forgiveness programs. If I were already on a career-trajectory where I intended to be in public service I would certainly be looking into it – I just don’t want to force myself down that road simply for the hope of possible loan forgiveness at the end of it. Actually, I’m on an income-based payment plan where any unpaid interest on my subsidized loans has been forgiveness. It’s not loan forgiveness (it’s only interest forgiveness…and only on some of my loans), but it’s a related student loan program and I’m taking 100% advantage of it while I can. But in terms of the major government-backed loan forgiveness programs (like PSLF), they have never sounded like appealing options for me.
What are your thoughts on the controversy? Is anyone signed up for the PSLF program that would be directly impacted if it were to be discontinued? How scary!
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Freshly 40, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
Yes, this has been all over my FB feed today. Many of my colleagues, if this were to come to fruition, would by greatly impacted by this cut. Upon graduation the average law school graduate has over $150,000 in debt and that doesn’t include undergrad or other grad programs. Less than 5% of attorneys (at least the ones I know) make less than $75,000 a year. That means they have to support themselves, a family, AND repay the loans on that budget after taxes. For these colleagues and friends that have chosen public service, the one benefit was the student loan foreignness program. I have a friend that works at Legal Aid. He works 70+ hours a week and has a huge case load. Yes, his salary is not enough to EVER support his loan payment (without IBR) and live a reasonable quality of life (forget European vacations and driving a nice car). He chose this path because he wants to help others and loves his work. Cancelling the program would force him and many similar wonderful people working other needed programs (medical, education, law, social work, etc.) to literally choose between staying at their job and cutting out the necessities to make the loan payments on this huge debt with no hope of every paying it off. But wait, it’s not that easy. These same people have chosen a career path and it’s not like they can just go out and find a salary commensurate with said experience and then pay back their loans that way. By choosing public service (e.g. Legal Aid) that career trajectory will have taken many out of the running for other jobs. Very few law firms are going to pay an attorney with 10+ years experience a decent living wage because they will not be bringing in paying clients and they are too experienced to hire as a new associate. Thus, this has disaster written all over it.
Like Ashley I have chose to pay off my loans and not be burdened by the whims of the system. I am lucky that I have a supportive spouse with a good paying job that assists in me making larger payments. However, I know many teachers and lawyers, because of the path they chose to try and make a difference, don’t have that option. I will be curious if this actually does happen and even more so if they will grandfather people who are currently enrolled in the program to continue until completion.
If you took out a student loan you should have to pay it back.
I don’t disagree with your comment in principle. I personally took out loans knowing I intended to and would pay back every penny. However, there are (or at least used to be programs) that would use the student loan forgiveness program as a recruiting tool. I have seen this in law, medicine and education. This may have stopped in recent years, but when I was going to school if someone had an interest in public interest work that required a high ed degree they saw this as a solution to the issue of $200K+ in loans and the willingness to serve on a small salary.
Plus, programs such as this are a way for the government to encourage people to go into low-paying but needed careers, e.g., practicing medicine in rural areas, public defender, etc.
These are exactly the programs I am thinking about!
You’re exactly right Jen. This program is an excellent recruiting tool. I’m sorry to see it on the chopping block.
I have to admit, I clicked on the link expecting a huge piece in support in favor of student loan forgiveness. I must say, I’m impressed with your stance. Maybe it’s my generalizations of so many people expecting the government to provide for them. I’m in about $77k of student loan debt from nursing school. I would never want (or expect) the government to take care of my decisions that put me in debt. Similar to law, nursing in the public service sector pays little. I opted to not go into the public service area.
However, I think this topic has so many areas to touch and I’m not an expert in this area so I can only say what I believe:
a. On your point about teachers: education spending continues to increase – wages are nearly flat for teachers yet education administrator pay continues to soar.
b. I just read a book called Rise Of The Robots about automation of jobs. Essentially, the case is that workers are screwed. Since the huge recession of 2007/8 corporate profits have sky rocketed and so has productivity (thanks to automation of the work place) yet job wages are still pretty stagnant and full time jobs are incredibly hard to come by (ACA?).
I hope I’m wrong but I think there could be some tough times ahead in the next 10-20 years.
Just like anything, you shouldn’t be buying things you can’t ultimately pay for, including an education.
Also, by cutting these federal programs, maybe that could impact school pricing since the colleges couldn’t depend on them either, potentially making pricing more competitive?
I’ve only known people that use the interest reducing programs, not the loan forgiveness programs so I’m responding based on my experiences only.
I also think there should be a larger push for trades and not “college for all”, and those educations seem more affordable.
You are definitely entitled to your opinion; however, I think you are being a little critical of many individuals that are just trying to better their lives by getting an education. I personally know many hardworking middle class individuals that went to college and got higher ed degrees with the promise/ideal of a better job. This was pre-2008. When I started law school the economy was booming and jobs were abound. By the time I graduated the economy had tanked and there were no jobs. Schools (maybe this has changed some) do not do a good job about educating students about the seriousness of borrowing money, what repayment looks like, and what is the backup plan if you don’t get a job. The system is flawed, I strongly believe that. But there is a lot of blame and finger pointing to go around. I will never sell someone short and tell them they shouldn’t dream the dream of college just because they don’t have a way to pay for it-maybe resist the dream (start at a community college), but we should be in the business of changing the system and educating people about how it works rather than crushing dreams.
This doesn’t sound good either.
http://mobile.reuters.com/article/idUSKCN18F29N?utm_campaign=trueAnthem%253A+Trending+Content&utm_content=591f7a1f04d30128b8af4b88&utm_medium=trueAnthem&utm_source=facebook
I’m interested by all of the negative comments on those taking advantage of the program. I know a few people using this option and it’s definitely not about expecting the government to take care of a debt they can’t pay back – more like this program allows them to work as a primary care doctor/ nurse practitioner at a safety net clinic rather than having to work in private practice to make more money and pay their loans. The same is true for lawyers who could be working for a larger firm but are working in legal aid, public defenders, etc. Those jobs benefit a lot of people in this country but don’t always let you pay back the cost of a medical or legal education and also pay rent and eat.
Well I would like to add my 2 cents. To Matt yes you are right, public service like law and medical pays much lower, (I am a RN in a state psych hospital) (I,m in my 60’s college was cheap in the 70’s). And as you say that’s one reason for your different career choices. So if this repayment closes I believe many people will not be able to go into service having to choose higher paying jobs, then what? Will the public service have to raise their pay to compete? So same money different pot and people in need may go even more under served. Believe me these are not cushy jobs but much needed and there should be a draw to work in them.
I think that each department should be responsible for funding their own benefits if that includes student loan repayment. Teachers are paid a comparable wage in my community and only work 8 months a year but qualify for this program. We do not have a shortage of teachers in my area either so this is an unnecessary program.
Also, not to give Ashley a hard time but it annoys me that taxpayers are footing the interest bill on her student loans. She has a full time job in her field. They just bought a house with a 15 year mortgage. Her husband opted to quit his job to go back to school. I don’t see how they are qualifying for income based repayment. I would estimate that they made around $120,000 last year based on their tax bill. At a certain point, we just need to put the breaks on the handouts.
According to the 2018 budget that will be submitted to Congress, the student loan forgiveness program will continue for those already in it. There will be massive changes for those who would like to enter it in 2018.
I am of no strong opinion about whether this program should exist or not actually but I think that it is unlikely to be popular or well-supported to take away the program from those already in it. I could see it closing down to new people though in the future.