More than 400,000 individuals who were planning on taking advantage of the Public Service Loan Forgiveness Program are now facing financial uncertainty. The program forgives any remaining student loan debt after eligible loan holders make 10 years of on time payments, but the future of the benefit is currently uncertain.
As reported by CNN, the Public Service Loan Forgiveness Program allowed many teachers, government employees, law enforcement officers, public defenders, and members of the Peace Corps to be relieved of their remaining student loan debt after making their required payments for 10 years. October marks the 10th anniversary of the creation of the program and is the point where the first participants would reach full eligibility.
However, a report from the Washington Post stated the Department of Education is considering ending the program based on information gathered from budget documents the department released to the public, leaving many people who were planning to use the benefit in the lurch.
Currently, it is unknown whether Trump’s administration would shut down the program for those who graduate after the program is ended, if that ultimately occurs, or if those who qualify for the program and have already applied would also not see their loans forgiven.
The Department of Education has yet to comment directly on the issue.
Daniel J. Crooks III, an attorney employed by the government who anticipated using the program for six years, said, “It would be absolutely detrimental to those of us who have planned our lives around this program,” continuing, “It would be the equivalent of pulling the rug out from under us.”
Betsy DeVos, the Education Secretary, has said little on the topic of student debt include the Public Service Loan Forgiveness Program.
This isn’t the first time the Public Service Loan Forgiveness Program gave borrowers a cause for concern. December, four loan holders filed a lawsuit claiming they were misled regarding their eligibility for loan forgiveness.
Also, many find information regarding who qualifies generally confusing and many aren’t able to get reliable information from the companies charged with servicing their loans. Only certain loans qualify for forgiveness and must be paid using particular repayment plans. Further, only specific jobs meet the eligibility requirements.
Even with strict qualifications, the program could cost more than originally anticipated. Even though the Obama administration made efforts to cap the amount that could be forgiven to $57,500 per borrower, it was never approved. At this time, the amount of potential forgiveness is unlimited.
Crooks expressed concern that ending the program may discourage graduates from seeking public service jobs, saying “With student debt hanging over them, it might not be financially possible for recent grads to commit to public service careers.”