Public sector workers could benefit from overhaul of student loans



WASHINGTON – The Albany Common Council was early to engage in deliberations on the need for a blanket forgiveness of federal student loans. In August 2009, the council passed a resolution urging the federal government to consider forgiving student loans in order to help the economy.

Jim Sano, a longtime resident of Albany and a former city councilor and college professor, said he came up with the idea for the resolution after receiving an article from his daughter, a graduate student at the University of New York, describing the devastating effects of student debt. It struck a chord, mostly because it saw other sectors of the economy receive federal aid in response to the Great Recession.

One section of the resolution dealt with expanding access to private and public loan remittance for public sector employees, in order to “make better use of these credentials and experience, especially in our most disadvantaged sectors.”

At the time, the federal government had already created a loan exemption program for public servants: the civil service loan exemption program. But it turned out not to be as effective as expected, and the US Department of Education announced a massive overhaul last week.

Established in 2007, the federal program aimed to ensure that public service employees – teachers, firefighters, health workers, and others – would have their student debts wiped out after 10 years in the public service if they had completed at least 120 payments.

“It was both a reward for people doing important work and an incentive to ensure that people were not prevented from accessing public service jobs because of their debt load,” said Winston Berkman-Breen, advocacy director for the Student Center for Borrower Protection.

The first year that a group of eligible borrowers would have had their debts canceled was 2017. However, the number of participants who benefited was much lower than expected.

According to a report by the United States Government Accountability Office, as of April 2018, more than one million people had started the process of verifying their eligibility for the program. From that point on, a total of 20,000 people had applied for a loan forgiveness, and only 55 people received a forgiveness.

About 1.2% of New York’s PSLF attendees have had their debts canceled, with other state attendees still owing more than $ 8 billion in student loans, according to a report citing U.S. Department of Justice data. ‘Education of US Senator Kirsten Gillibrand.

A confusing application process, stringent requirements for payments that would qualify for a minimum of 120, and a lack of clear communication are partly to blame for the result, according to a number of experts. Randi Weingarten, president of the American Federation of Teachers, said the program was “worse than the worst maze anyone has ever walked through.”

With the recent overhaul, the US Department of Education plans to make a number of changes. Significantly, a temporary waiver will allow borrowers to consolidate their loans, with past payments factored into their 120 payments, regardless of loan type or payment plan. The deadline to apply for the program is October 31, 2022.

Other changes include plans to streamline the application process, review refused applications to correct past errors, remove barriers that deter military members from participating, and improve communication with eligible borrowers, the agency said.

Eric Harrington, senior counsel for the National Education Association, said the importance of the overhaul was underestimated.

“This is a very big deal.… For educators, this overhaul could mean that 10 to 15 percent of all educators in the country, or nearly a million people, could have their student debt erased thanks to these actions. “, did he declare.

But some say the changes are only scratching the surface.

Gillibrand, who has been calling for reform of the program since last year, praised the Biden administration for the recently announced changes. However, she stressed that the changes are only temporary solutions.

“We can and must do more to help the people who have served our communities and planned their lives, careers and futures around the promise of the PSLF program,” said Gillibrand.

She sponsored legislation last year that would make more permanent changes to the program, including making it more flexible. His bill would allow participants to have their loans partially canceled after five years of service and make all federal college loans permanently eligible.

Janet Werther, an assistant professor at the State University of New York, failed to qualify for the PSLF twice – once as a professor and another while working part-time at an arts organization in non-profit. The PSLF requires borrowers to work full time or at least 30 hours per week and, while there are exceptions to the rule, meeting this minimum is a necessity year after year. Werther said the requirement, especially in the higher education system, poses a problem because there is a higher proportion of part-time faculty compared to full-time positions.

“There is a structural injustice there in that those of us who in the university system are the most economically disadvantaged, the most precarious, the most structurally disadvantaged in our work, are also the least able to access the cancellation of public service loans, ”Werther said.

The impact of the overhaul will be felt in the years to come. Until then, said Gillibrand, the key to regaining faith in this program lies in how it works.

“If we give a loan forgiveness to a million people, to the million who have done the job in the last 10 years, who deserve it, it would transform how people feel about the program overnight. “

Baylor Spears and Mikayla Denault are graduate students of the Medill School of Journalism at Northwestern University.

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