I graduated in 1996 with a masters’ degree, approximately $27,000 in debt, and a burning desire to do good in the world at a nonprofit. My idealism was quickly replaced with a gnawing, constant worry about making ends meet: An entry-level nonprofit salary and a $300 monthly loan payment made for uneasy budgetary bedfellows in Washington, D.C. I lasted six months as a penny-watching idealist then fled for a higher salary in the private sector.
The world has moved on without my services as a professional idealist, but society as a whole needs people willing to bend their time and talent to public service. Enter the 2007 Public Service Loan Forgiveness Program and its subsequent expansion by the Obama administration in 2010, 2012 and 2015. The fundamentals of the program were simple: Did you have a federal student loan? Were you employed in public service? Then you could cap your payments at a fixed percentage of your monthly income and after ten years of qualified public service, the government would forgive the remaining balance on your federal student loans.
This was not a “get out of all student loans” ticket—thanks to federal student loan limits, the amount of money a student can borrow from the government may not cover tuition, room and board, so a lot of students have to fill in the rest with private loans. But the Public Service Loan Forgiveness Program (PSLF) could and did help people manage their federal student loan debt.
The current administration is proposing to eliminate this program. As the Washington Post reports:
The loan forgiveness program, enacted in 2007, was designed to encourage college graduates to pursue careers as social workers, teachers, public defenders or doctors in rural areas. There are at least 552,931 people on track to receive the benefit, with the first wave of forgiveness set for October. It’s unclear how the proposed elimination would affect those borrowers… There were no estimates on how much the government would save by eliminating public-service loan forgiveness.
So what? Yanking away programs that help young adults with student loans build a future is remarkably short-sighted. Several key components of a functioning society—law, medicine, education, social services—do better when there is a wide, deep pool of qualified aspirants. And if dedicating a decade or more to a public service job doesn’t ruin an adult financially, then the fields of law, education, etc. benefit from having passionate, committed veterans. Never underestimate the bargain that a long-time employee represents, in terms of both institutional knowledge and reduced employee overhead.
If “professional competence” and “higher quality applicants” and “better employees, therefore better public service” aren’t sufficiently compelling reasons, consider this one: Student loans are throttling some sectors of the U.S. economy.
Approximately 44 million people in the U.S. have borrowed for student loans, with outstanding student loan debt standing at approximately $1.3 trillion today. Around seven in 10 newly-minted college graduates leave school with debt. They are carrying, on average, around $37,000 in student loans. In 2014, Pew Research estimated that college graduates aged 25-32 were earning $45,500 annually. That’s not too shabby—the median annual income for that age group as a whole is estimated at $25,000 or so—but throw in those $300-a-month loan payments on top of other fixed expenses like rent and it’s no wonder young people aren’t buying anything.
In addition to eliminating any public-service loan forgiveness programs, the current administration also wants to hike loan repayment for income-based repayment plans, end subsidized federal student loans, eliminate more than $700 million in Perkins loans for disadvantaged students, and cut $490 million from undergraduate work-study programs. The upshot is the current administration just said it’s not the government’s job to broaden access to education to people below the middle class.
Who cares? How about the agricultural sector, which could have used the infusion of new blood following a previously-proposed expansion of the PSLF to include young farmers?
On a broader sense, “who cares?”—in addition to diamond merchants, soap magnates, cereal titans, etc. who are all, “Why do young people not buy things?“—includes anyone who enjoys the benefits of not having plagues decimate their community or fires raging through their back yard or children getting educated might be worked up about this.
Eliminating the PSLF is estimated to affect 25 percent of the workforce. The impact includes, but is not limited to:
- Local, state, tribal and federal government organizations
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code. These include private foundations and public charities, the scope of which include nursing homes, parent-teacher associations, charitable hospitals, alumni associations, schools, chapters of the Red Cross or Salvation Army, Boys’ or Girl’s clubs, and churches.
- Not-for-profit organizations that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code but provide the following: emergency management, military service, public safety, law enforcement, public interest law services, early childhood education, public service for individuals with disabilities, public service for the elderly, public health, public education, public library services, and other school-based services.
As you can see, these fields touch aspects of civic life that affect even people not employed in those areas—public safety, public health, the military, religious life and community organizations that help people feel connected to one another.
Anyone who cares about finding a way to help motivate the best and the brightest serve the public without impoverishing themselves should care about this proposed education budget and the relentless attack on student loan protections. The future is never certain, but we can take steps to safeguard our societal safety nets—for the sake of the people who rely on them and the people who make up those nets for the rest of us.
Want more? There’s a whole archive of So What, Who Cares? newsletters at tinyletter.com/lschmeiser. In addition to the news analysis, there are also fun pop culture recommendations.