So @hebegebe you are saying that the low salaries paid by governmental entities and non-profits is bad behavior? Under PSLF, the employer has to meet the definition of a Qualifying Employer.
Any U.S. federal, state, local, or tribal government agency is considered a government employer for the PSLF Program. This includes employers such as the U.S. military, public elementary and secondary schools, public colleges and universities, public child and family service agencies, and special governmental districts (including entities such as public transportation, water, bridge district, or housing authorities). Federal Student Aid
Certain not-for-profit entities can also be qualifying employers, such as private schools and colleges.
The whole point of PSLF was to incentivize graduates to choose lower paying public service jobs. For example, both public defender and district attorney offices rely on the availability of PSLF to recruit law graduates, as do civil legal aid societies and court personnel offices.
America relies on a host of dedicated public servants to ensure that people in our country have access to essential services like health care, education, and fairness in our justice system. This is made possible in many areas by the Public Service Loan Forgiveness (PSLF) program, enacted in 2007 by then President George W. Bush, which makes it possible for graduates to devote their careers to addressing the most pressing needs of their communities. Recognizing the need to overcome the barrier of high student debt in order to build cadres of public servants in these fields, PSLF allows individuals to earn forgiveness after at least 10 years of service at a qualifying employer and 120 monthly payments on an income-driven repayment (IDR) plan.
When individuals earn forgiveness, it is our communities that benefit. Public defenders, prosecutors, civil legal aid attorneys and court personnel, for example, are indispensable components of the administration of justice in our country. Their work helps protect Americans from injustice and strengthens the rule of law in our democracy; it is an integral part of our constitutional system. Public Service Loan Forgiveness and the Justice System | National Legal Aid & Defender Association
Again, what I am advocating for is expanding paths to EARN debt forgiveness.
Fogiving $27k of loans for everyone (now and going forward), particularly for kids who have no loans (or for kids with loans whose parents plan to repay them after graduation – most commonly I see parents using that as a way to keep their kids focused on graduating), will increase the price of college. Its what subsidies do. And given the issue being addressed with the loan forgiveness is high cost of college, I think it makes sense to do what we can to avoid making the problem worse.
And I still think the bigger issue is why an associates degree isn’t worth $18k or a bachelors worth $30k.
Our kids’ undergrad loans were paid off early…if they hadn’t been, both could possibly still have had a balance. They (and we) paid these loans off…because we agreed to pay for them.
So…what will be done for responsible loan repayers who chose to accelerate their payments.
I’m not really eager to see loan forgiveness go to families earning 6-figures who borrow because their kids want a residential experience or think the state flagship is beneath them. I live in an expensive area of NYS and our family earns above the median NYS income, but many families in neighborhoods that aren’t that far away earn much less. I think loan forgiveness is meant for people who are truly low income (not low compared to others in the expensive neighborhood they chose to live in), those who were taken advantage of by predatory schools that offer worthless degrees, and the families who lost jobs because of the pandemic.
I think we need to address this on the front end too. Quit subsidizing degree mills with taxpayer money. And increase the grants we give to low income students so they can actually afford to go to school. NYS offers free tuition for families who earn under $125k, but it’s last payer. I’d like to see that grant awarded alongside the Pell grant, not subtracted from it. A $7500 NYS Excelsior tuition grant + $6000 Pell + the $5500 federal student loan would truly help low income students. Reducing the Excelsior by the amount of the Pell so they get $1500 Excelsior + $6000 Pell + the $5500 loan isn’t nearly as helpful. If they have a SUNY within commuting distance it might, but NYS is large and not every area has college within commuting distance. Students who get the Excelsior have to work in NYS for the same number of years they got the grant or it becomes a loan. I don’t think we should be placing additional burdens on low income students, but I suppose that rule was included to get it passed.
I’d also like to see something done about the cost of public colleges. Why is NYS able to keep tuition low when neighboring states like NJ and PA are so high? There’s a limit to how much SUNY tuition can be increased yearly. Don’t other states have that? Or are people talking about private colleges when they complain about how expensive college is?
I am one of those who got a degree in social work, had to get a master’s in social work to even make a livable wage and, though I chose the cheapest in-state public route (which was also the only MSW program in my state), I accrued $60,000 in student loans. This was 1994 and my first job after graduate school I made $21,500. I was, and still am, a social worker. Substantial wage increases never happened for me. Student loans were an unbelievable burden and altered every decision in my life including buying a house (my first house was $35,000), when I could have kids, etc. After 23 years, I was able to finally pay every dime off.
I am not bitter about forgiveness programs that have developed since such as working in the non-profit sector or canceling a portion of debt for students now and in the future. I know how hard it was for me and I wouldn’t wish that on anyone.
What I don’t agree with is the amounts being proposed ($50,000) and that there seems to be no discussion about students in the future. If it’s not sustainable, it shouldn’t happen. That’s when I get heightened about fairness. Do it in an equitable way that benefits not just the borrowers now, but every single borrower going forward.
I, for one, am not referring to private colleges being expensive. That I expect and you have the option of going the public route. But when public becomes out of reach without taking on loans, then I have an issue.
I’m talking public. When your in state is high (my state is one of the highest), there isn’t much recourse. The cost for Rutgers and SUNY Binghamton was the same for my daughter due to merit from SUNY (nothing from Rutgers). OOS with merit still more than Rutgers. TCNJ is more that Rutgers, NJIT even more than TCNJ. It wasn’t always this way in NJ.
Income based repayment shifts costs from the cities to the federal government, allowing cities to hide the true cost of public defenders. Essentially the cost of the law degree, that the city requires, is not fully paid for by the city. It is instead subsidized by taxpayers through their federal taxes. The net cost to the taxpayer for that one person is essentially the same, but the net cost to the city is less. Why would they city change its behavior?
Here’s a different example. Suppose you got a dog, but found that the vet bills were too high. You could go to your neighbors and ask them to each pitch in a few dollars so that you could enjoy your dog, but many would look at you funny. With vets taking income based repayments, that is in effect what you are doing. The cost of the vet’s education is too high compared to their income, so they go on income based repayment, and so the bet bills of your dog is paid for in part by all of your neighbors.
It is common that when the person incurring the costs is different from the person paying the costs, the total costs increase. You see this often with health insurance, where people with great insurance simply want the best and usually most expensive healthcare because their costs are relatively independent of the actual costs, even if only makes a marginal difference in health outcomes.
Back to cities. If cities are getting a subsidy for their public defenders, they may try to hire more of them than if they had to pay for the full cost themselves.
@hebegebe I don’t think your argument has merit. Cities are required to have public defenders. Given the social structure of the US, cities have more crime and more poverty and therefore are more in need of public defenders. The crimes for which a PD is required are usually state offenses, not city offenses. Therefore, at a minimum, the state should be responsible for the PDs and their cost. Alternatively, the state could pay the PDs enough in salary that they could repay their law school loans which would still be funded by taxpayers. In order to have a fair justice system, we need PDs and prosecutors, who also are not paid as well as private lawyers.
Perhaps, but your explanation didn’t hold up either.
If a city requires public defenders, then it is responsible for paying them enough to attract people into doing it, and at a minimum that means that they can afford to pay back their law degree and meet other requirements of living.
There is no clearer sign that a job is not valued by society or a company than not paying enough for it. People have gotten so used to this (in important jobs such as public defenders or teachers) that they forget this remains true.
The public defender organizations exist because our Constitution requires that everyone has the right to representation when they are charged with a crime. Not sure why we are debating who requires public defenders. This is not optional and jurisdictions don’t get to decide “nope, we don’t need this” because they don’t like the costs.
The vet in your example is presumably in private practice and not earning Public Service Loan Forgiveness. You can make a separate argument about who should qualify for IBR plans, but those plans as of now only lead to debt forgiveness after 20-25 years and come with a tax bomb at the end.
Going back to my public defender example, you say that the city requires the law degree. But the requirement to provide a defense for indigent people accused of a crime comes from a constitutional mandate (Gideon v. Wainwright). Many if not most, local taxing authorities would rather not be bothered. I think every public defender’s office struggles to get their budgets approved and funded, and the staff work long hours for low pay. And by the way the staff at a public defender office includes social workers, investigators, paralegals and all the normal administrative staff you’d find in any law office. If the idea of providing legal services to poor people doesn’t move you, consider the fact that PSLF also helps district attorney’s offices function and recruit talent, including the same array of support staff.
@hebegebe You fundamental complaint seems to be that using governmental incentives is inefficient and we should let the market decide. But consider our tax system. It is set up to encourage certain economic activity. I don’t see how PSLF is any different. And I’d like the Biden administration to consider ways to expand it. Specifically I wish it wasn’t totally “all or nothing” where you have to complete 120 months of qualifying employment to get any relief. And right now if you are technically working for a governmental contractor you don’t qualify. That could be reconsidered.
I would make it easier for students to declare bankruptcy because of student loans. Right now, it’s very hard to do that, which is why it’s such a problem for so many. By letting people declare bankruptcy, it helps limit loan forgiveness to students who really need it rather than everyone who’s taken out a loan. The government, schools, banks and students all acted irresponsibly when it came to taking out loans, and they all need to share the pain of fixing the problem.
To pay more in salaries for public jobs, taxes would have to go up significantly - local, state, and federal since all have public jobs.
What, exactly, is the difference in using the tax dollars to help pay off loans directly vs to increase salaries?
For many jobs, if the salaries get too high, jobs get outsourced. This wouldn’t happen for public defenders, but I could see teachers getting replaced by videos or super large class sizes. Some other work could be done overseas with cheap labor via the internet. Is something like that what folks would rather have?
Oh wait, then we use the tax dollars for unemployment and/or welfare…
I’d say the difference is the student is working in specific jobs on specific locals for the public who are paying for their debt rather than the forgiveness being a “gimme” to every student debtor.
There is a massive difference in transparency and accountability.
If a city now wants its teachers to have master’s degrees and has to pay enough so that those teachers can pay off those loans, then it may well decide that no, teaching 3rd grade really doesn’t require a master’s degree. But if instead this is IBR, then the city can cause credential creep and higher costs because it doesn’t bear those costs itself.
I wouldn’t like that either, but I fundamentally respect the right of taxpayers to make that choice. Don’t you?
With regard to bankruptcy, if student loans become dischargable in bankruptcy like other consumer debt, then it will be priced like other unsecured consumer debt (credit cards). 18% on private loans is untenable, so you’ve basically shut down that industry and eliminated that as a potential source of college funding.
But what about federal loans? Should those be dischargable in bankruptcy as well? What stops every recent college graduate from declaring personal bankruptcy in order for their federal student loans to be discharged? Might as well just give everyone a $27k check for undergrad and cover 100% of the cost of all grad school.
There are consequences and trade offs for the decision we make in life.
And I know there are a million scenarios here, but for shame on those parents who let their kids take on an unnecessarily high amount of debt!
We know of 2 kids that instead of going to the highly regarded state flagship, went OOS to play their sport, racking up close to $75,000 debt each. Really?? Paying $75,000 to play soccer??
Another friend said she felt guilty about not being able to pay the entire amount to send her kid to an OOS public ($200,000). So if he decides to go there, he will rack up $100,000 in loans (with a humanities degree). I can’t understand why him going there is even an option.
