Administration, the program provides an incentive for people to enter and remain in public service positions by forgiving their federal student loans after they have made 120 on-time monthly payments while enrolled in a qualified repayment plan. Eligible public service employees include teachers, police officers, firefighters and nurses, among a variety of other professions. The goal is to attract students, through promised loan forgiveness, to enter fields that are crucial to society but lack the compensation found in the private sector. PSLF has been a popular program and one could argue it’s been beneficial to society as a whole. But even PSLF doesn’t escape the loan forgiveness controversy. When he was president, Donald Trump called for its elimination. And Project 2025, a collection of policy plans developed by conservative think tank The Heritage Foundation, calls for further cuts to student loan forgiveness programs, including the elimination of several affordable repayment plans for borrowers actually trying to pay their loans. Like McCuan says, you can’t separate student loan forgiveness from the 2024 election politics. The election is weeks away. Stay tuned. g
By the Numbers: The true cost of student loan debt g The outstanding student loan debt in the U.S. stands at around $1.6 trillion. g Nearly 43 million people—or 1 in 6 adult Americans—carry student loans. g Women and people of color are most burdened by the debt. g Student debt has more than doubled since 2008 and significantly exceeds the increase in the number of students, which the Department of Education (DOE) estimates has only risen 2%. g Student loan debt has risen faster than other household debt, surpassing both auto loan and credit card debt. g Graduate school borrowing accounts for most of the student debt outstanding. Overall, grad school loans account for more than 56% of student debt currently outstanding. g Most student debt is owed to the federal government. About 92% is owed to the feds, with private financial institutions lending the remaining 8%. g Students at for-profit schools owe more federal student debt, on average, than other groups of borrowers. g The highest federal student loan default rates are among students at for-profit schools and Black borrowers. g Student debt affects the economic outlook for Americans. Federal Reserve research indicates student debt may depress home ownership among young adults. It also hampers the growth of small businesses, limits retirement savings and delays marriage and family formation. — Jane Hodges Young, with information sourced from the Peter G. Peterson Foundation
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September 2024
NorthBaybiz 45
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