College Debt Forgiveness for Government Service

wrath
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“U.S. Senator Ben Cardin (D-Md.), a member of the Senate Finance Committee, has introduced legislation that will expand access to debt-free public service career pathways for Americans willing to place service over salary and assist our communities, states and nation.”

“Cardin’s bill, S. 2984, the Strengthening American Communities Act, expands the ways in which public servants can finance their undergraduate educations. Rather than taking out student loans to pay for their degrees, the act establishes the National Public Service Education Grant to provide students with the majority of the cost of their degrees. Colleges will contribute a portion of the remaining costs for students, and the students, by accepting the grant, will commit themselves to at least three years of public service.”

Who wants to work in US Government?

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Welp, it took me a damn minute, but I read the text of the bill.
And I looked up the definiton of “public service job” as defined in 20 U.S.C 1087e(m), section 455(m).

(B)The term “public service job” means— (i)a full-time job in emergency management, government (excluding time served as a member of Congress), military service, public safety, law enforcement, public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations, as such terms are defined by the Bureau of Labor Statistics), public education, social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy on behalf of low-income communities at a nonprofit organization), early childhood education (including licensed or regulated childcare, Head Start, and State funded prekindergarten), public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described insection 501(c)(3) of title 26and exempt from taxation under section 501(a) of such title; or (ii)teaching as a full-time faculty member at a Tribal College or University as defined insection 1059c(b) of this title and other faculty teaching in high-needs subject areas or areas of shortage (including nurse faculty, foreign language faculty, and part-time faculty at community colleges), as determined by the Secretary.

That looks okay to me. A friend of mine from college paid for med school by agreeing to practice medicine in an “underserved” geographical location for some length of time after getting his MD. That was a state program (Indiana), as I recall, but it worked out pretty well for him. This seems similar?

ETA: I just noticed that 501c3 is in there too. That means people who work for theatre companies, museums, orchestras, etc. are also eligible.

The actual problem, though, is that Section 301(a)(5)(B) of the proposed bill says that the student loan forgiveness runs as follows:

  • 2 years in a public service job = 15% of your loan balance gets forgiven
  • 4 years in a public service job = 15% of your loan balance gets forgiven (yes, I know this makes no sense to me either)
  • 6 years in a public service job = 20% of your loan balance gets forgiven
  • 8 years in a public service job = 20% of your loan balance gets forgiven (again, what?)
  • 10 years in a public service job = 30% of your loan balance gets forgiven (This is the maximum possible)

So ultimately not super useful.

ETA #2: Unless those percentages are meant to be additive; they’d have to iron that out in the real bill.

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That must be cumulative but is still bunk. However, I am absolutely behind steps forward to a better solution - and this is a hell of a lot better than right now.

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Thanks for delving deeper into this. I posted while at work w/o much time to go into details.

Looks more like a sketch than an actual working bill for sure but, it’s a step in the right direction.

I too have a friend who helped pay down his medical school debt by helping in an “underserved” area. He ended up working with a Hmong community somewhere in Ca. and found it to be very interesting. He’s now debt free and doing great as an Md.

Going to keep an eye on this bill.

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This should be a boost to declining military enrolment.

  • 2 years in a combat zone = 15% of your loan balance gets forgiven
  • loss of one limb = 15% of your loan balance gets forgiven
  • loss of two limbs and either one eye or the finger and thumb of your dominant hand = 25% of your loan balance gets forgiven
  • etc.

(In all cases, veterans may forgo the loan forgiveness in exchange for the right to vote.)

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You still end up with crippling debt but this time in a low-paying job. Yippee.

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You have to read it together with the preceding sub-section:

‘‘(A) IN GENERAL.—Beginning after the date of enactment of the Strengthening American Communities Act of 2018, after the conclusion of each employment period in a public service job, as described in subparagraph (B), the Secretary shall cancel the percent specified in such subparagraph of the total amount due on any eligible Federal Direct Loan made after the date of enactment of the Strengthening American Communities Act of 2018 […]

So at the end of each of the specified periods, you get the specified percentage knocked off your debt. 15% after two years. Carry on working in the same post for another two years? Get another 15% knocked off. And so on.

Note also, you get a reduction based on the amount outstanding when you started the qualifying job. If you pay anything off in the meantime, your reduction is still based on the initial figure.

Likewise though, interest might increase the outstanding amount but you’d still only get a reduction of 15% of the initial figure.

ETA: Except A and B contradict each other on that.

B says:

15 percent of the total amount due on the eligible Federal Direct Loan on the date the borrower commenced employment in such public service job.

A says:

the Secretary shall cancel the percent specified in such subparagraph of the total amount due on any eligible Federal Direct Loan

I can’t reconcile the two.

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This seems roughly similar to the previous program for public service student loan forgiveness which had been axed in the last tax bill. It was my plan B for dealing with my loans (plan A = bubble bursting) so hopefully it passes but I have my doubts.

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