Trump Moves to Reduce Student Loan Forgiveness

Trump is making moves to end the Public Service Student Loan Forgiveness Program, an operation that’s run for a little more than a decade and is intended to wipe out debt for some of those who took on student loans.

Ultimately, it comes down to whether people feel that funds are better off in educating public servants, or redirected towards public works. There are arguments on either side, including those that argue that the loan forgiveness program itself was poorly administered from the outset.

What is the Public Service Student Loan Forgiveness Program?

In 2007, President George W. Bush created a student loan program that was designed for public service workers. Those who worked in public service for ten years and paid off their student loans could get their debt erased after those ten years, rather than the fifteen or twenty years that is typical. This was meant to encourage people to move into public sector work and to alleviate some woes of public sector work, as government work tends to be lower paid.

But this public sector loan program was actually rife with problems, not the least of which was that though the money was set aside in the budget, most people couldn’t actually get accepted. Some studiously paid their debts for a total of ten years only to find they didn’t qualify and would have to pay the rest of their debt regardless. This was due to a lack of information distributed about the program as well as borrower error.

Why Cancel the Debt Forgiveness Program?

To some, canceling the debt forgiveness program is just a matter of the needs of the few versus the needs of the many. On the one hand, there are borrowers who willingly took on debt. On the other, there are people who could be further helped by a reallocation of the money being used to dissolve that debt. There’s a total of $5.6 billion in funding that can be moved from one area to the other, and that’s the funding that people are most interested in reallocating towards general public works.

There’s a continued argument that this could mean that the best and brightest no longer want to go into public works because they aren’t going to have their debts resolved at the end of the ten-year term. However, given the erratic nature of the program in the past, others might posit that it’s not as large of a factor as it might seem.

Of course, others are persistent in arguing that student debt as a whole should be canceled. And while the public work student loan forgiveness program might be canceled, there are still a number of other opportunities such as income based repayment strategies, which forgive debt after twenty years of repayment.


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