26 September 2023

UNITED STATES: Forgiveness plan ‘not called for’

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United States Secretary of Education, Betsy DeVos (pictured) has repeated the call by President Donald Trump to end the controversial Public Service Loan Forgiveness Program.

Ms DeVos said this while giving evidence before Congress on Mr Trump’s annual education budget.

However, her call came almost at the same time as legislation allowing for a more streamlined program of forgiveness was introduced into the House of Representatives.

“The Administration feels that incentivising one type of work and one type of job over another is not called for,” Ms DeVos said.

“We have a demand in our economy of over seven million jobs going unfilled today, and favouring one type of pursuit over another type of pursuit philosophically doesn’t line up with where we are.”

She said that eliminating the program would save the Federal Government money from not having to forgive potentially billions of dollars of Federal student loans.

The Public Service Loan Forgiveness program was created in 2007 and forgives Federal student loans for borrowers who are employed full-time in an eligible Federal, State or local Public Service or non-profit job who make 120 eligible on-time payments over 10 years.

Meanwhile, Representative Dan Lipinski introduced the Public Service Appreciation Through Loan Forgiveness Act that would implement a partial loan forgiveness schedule for qualified employees.

Mr Lipinski, said his Bill could help many Public Service professions that struggled to attract and retain talented workers.

Under the legislation eligible participants would have their balance and interest reduced by 10 per cent after four years of regular, on-time payments while working in Public Service.

After six years, the balance and interest would be further reduced by 20 per cent, followed by a 50 per cent reduction after eight years.

The program would completely forgive debts of borrowers after 10 years.

The National Education Association and American Federation of Government Employees have endorsed the Bill.

Washington, 11 March 2020

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