Trump’s plan to end student loan forgiveness puts government, non-profit workers on edge

 (picture-waterfall / BigStock)

(picture-waterfall / BigStock)

In the fall of 2007, President Bush signed an expansive bill into law devoting billions in new aid for student loan borrowers and establishing a new initiative for public service workers: any federal student loan debt left over after 10 years of payments would be forgiven.

The law won praise from both parties and was embraced as a long-needed overhaul to how the government helps Americans finance opportunities for higher education.

Former Democratic U.S. Rep. George Miller, the lead sponsor, deemed the bipartisan effort “the greatest investment to help students and parents pay for college since the G.I. Bill.”

The loan forgiveness component was intended in part to spur more interest in public sector work, careers that often have trouble competing with higher-paid private sector jobs. The promise of student loan forgiveness, the logic went, makes becoming a teacher, cop, librarian, public defender, public health worker, non-profit employee or doctor in an underserved area more attractive.

More than a quarter of all jobs in the country are eligible to enter the forgiveness program, and since 2007, more than 550,000 people have signed up.

But the Trump administration is hoping to shut it down.

The cut is part of a pitch to slash $10.6 billion from federal education initiatives. Officials, according to the documents, would steer some of the savings into increased funding for charter schools and bolstering private and religious school vouchers.

As word about the program’s threatened elimination spread, panic among public service workers has reached a fever pitch.

Just ask Alex Turpin, a 31-year-old clinical social worker at a nonprofit hospital in New Jersey. He is three years into the forgiveness program and trudging his way through $75,000 in student loan debt. Agreeing to work for a non-profit, he said, has been a salary sacrifice, a financial setback tempered by the assurance of debt relief.

“The idea that this program would be cut is monstrously frustrating and disrespectful,” Turpin said. “There is a lot at stake for me and many of my coworkers.”

Others echoed that concern.

“It feels like a bait and switch because I’ve been on an income-driven plan that hardly covers the interest my loans are accumulating,” said Allison Evans, who went to graduate school at the University of Pennsylvania and now teaches political science at Western New Mexico University.

Sara Goldrick-Rab, a professor at Temple University’s College of Education, thinks the Trump administration should reconsider the proposal.

“Anything that we can do to try to reduce that stress is important, and it’s not government’s role to exacerbate that stress by messing with a program that, by all accounts, has been doing a job that’s important,” Goldrick-Rab said.

Natalia Abrams, who leads the advocacy group Student Debt Crisis, said that many employers have contacted her recently fretting about the impact the program’s elimination would have on finding workers.

“It’s going to make it harder for non-profits to recruit,” Abrams said. “Often, they don’t (offer) a lot of money to pay the best salaries for how valuable the employees are, so one of the perks was this program.”

Proof of that can be found by searching Idealist.org, an online database of do-good jobs. Dozens of listings including a public health clinic coordinator in Long Island to a youth volunteer organizer in Providence promote the forgiveness program as an enticement to prospective hires.

Critics of the program have said that the program amounts to a subsidy for student loan borrowers, especially graduate students taking out large sums. Forgiveness naysayers argue that the possibility of eliminating the debt may even have an unintended consequence: incentivizing students to over-borrow for their education, which can end up costing taxpayers serious money.

It’s not known yet whether eliminating the forgiveness program will make it in the final budget, and if so, whether those currently in the program will be grandfathered in or not.

The first forgiveness beneficiaries are poised to receive loan relief this fall, which will prompt many student borrower advocates to keep an eye on what kind of complications crop up ― especially because federal officials have indicated in legal filings that some former promises to waive debt loads may not be honored.

Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

It will take 126,000 members this year for great news and programs to thrive. Help us get to 100% of the goal.