A White House plan to eliminate a program aimed at encouraging college graduates to pursue careers at nonprofits and in government by forgiving their student debt will not affect participants who already have qualifying loans, Department of Education officials said Tuesday.
The Public Service Loan Forgiveness program is on the chopping block in President Trump’s proposed budget, but the administration said the cutoff date would be July 1, 2018, meaning those who have taken out qualifying loans by then are safe.
Proponents are digging in for a fight to preserve the debt-relief program, which they credit for attracting talented young workers to charity jobs, beyond next year.
Ending the program is “a serious threat to the long-term pipeline of talent into the nonprofit sector and other public-service jobs,” said Jamie Smith, executive director of the Young Nonprofit Professionals Network. “This hurts our people, which hurts our organizations and ultimately the communities and constituents we serve.”
The program was established in 2007. The inaugural set of borrowers will start seeing their loans wiped away on October 1, when registration in the program officially opens. Until then, borrowers have been instructed to submit paperwork documenting their jobs and loan repayments.
About 550,000 people are currently estimated to be seeking debt relief through the program, although a precise dollar amount of the qualifying loans that could be cleared away is unknown. Among people who have already sought approval, more than a quarter had borrowed more than $100,000, according to an August 2015 Government Accountability Office report. In December 2015, the Department of Education said the proportion was more than a third.
The loan-forgiveness program’s complicated regulations have left some borrowers uneasy for years about whether they will actually reap its benefits. Most recently, a memo from the Department of Education equivocating about who qualifies cranked up borrowers’ anxiety.
The White House proposal does not mean the program is sure to be eliminated, as it’s up to Congress to pass appropriations bills.
There are “people on Capitol Hill, on both sides of the aisle, who are strong supporters of public-service loan forgiveness,” said Isaac Bowers, director of law-school engagement and advocacy for legal-aid nonprofit Equal Justice Works. “They want a vibrant public sector in communities across the country.”
In a statement to The Chronicle, Sen. Patty Murray, the ranking Democrat on the Senate Health, Education, Labor, and Pensions Committee, called it “disappointing” that the budget plan “slashes investments that help students attend college and manage the crushing burden of massive debt.”
“As a Pell Grant recipient, I know firsthand the doors a college degree can open for struggling families, and I will keep fighting so that every student has access to the opportunities a high-quality, affordable education gave me,” Ms. Murray said.
Program proponents aren’t taking any chances. Equal Justice Works is organizing a coalition of groups representing lawyers, social workers, teachers, and government employees to defend the loan-forgiveness program, Mr. Bowers said. The advocacy group Student Debt Crisis emailed supporters last week, asking them to urge their elected representatives to defend the program, said Natalia Abrams, executive director.
As Congress considers the budget proposal, she said, “we need to speak up.”
