The new federal student loan forgiveness program sounds like a great idea, but it’s not nearly as helpful as it could be.
The public service student loan forgiveness plan is intended to help college students who are leery about going into lower paying public-service and nonprofit jobs, such as teaching and social work, because of their student debt. To nudge grads into these careers, the federal government devised a program that wipes out any remaining student debt for undergraduate or graduate studies after a borrower makes 120 monthly payments on his or her federal student loan.
Here are some of the areas that the forgiveness plan covers:
- Public education
- Law enforcement
- Public interest law
- Public service for elderly and disabled
- Emergency management
The program sounds great, but here’s the catch. According to the New America Foundation, borrowers won’t know if they are eligible for the student loan forgiveness plan until they’ve made their 10 years worth of payments. Here’s what the foundation says about this program flaw:
Borrowers who devote themselves to public service should not be left in the dark about whether they qualify for help from this worthy program.
I can’t help but think that the Department of Education will eventually tinker with this valuable program and eliminate the uncertainty.