Newspaper article Roll Call

Student Loan Forgiveness for Staff on Chopping Block

Newspaper article Roll Call

Student Loan Forgiveness for Staff on Chopping Block

Article excerpt

The public service loan forgiveness program, which provides incentives for public service, may be facing cuts in this year's budget.

One of the more generous benefits for congressional staffers might be on the chopping block in this year's budget. The House and Senate budgets include cuts for education, employment and training, including the Public Service Loan Forgiveness Program. The program forgives all federally backed student loans for those working for 10 cumulative years in public service -- including time spent on Capitol Hill.

Both the House and Senate budgets would cut the subsidy that allows people to not pay interest while they're in undergraduate studies and for six months after. The Student Loan Repayment Program, which authorizes the House and Senate and select federal agencies to pay back student loans, would not be affected. The budget conference committee started meetings this week to work out the differences between the chambers' two versions.

It's not clear how many current and former Hill staffers would be affected by discontinuing the forgiveness program, which was was started in 2007. Those eligible would begin receiving their full forgiveness in 2017. Any changes are not likely to affect those already enrolled, but would affect future graduates pursuing public service.

Even the Obama administration is open to modifying the forgiveness program and has called for a cap on the amount of debt that can be forgiven. Not having a cap on the amount is one of the chief criticisms of the concept.

"It creates a lot of incentive for people to overborrow, especially graduate students," said Kevin James, a research fellow at the American Enterprise Institute's Center on Higher Education Reform. The program is also cited as overly broad: 25 percent of the workforce work in nonprofit or government sectors, many of whom make salaries that do not widely diverge from their private-sector counterparts. And while even some detractors believe incentives are necessary for pursuing public service careers, they don't think it should be so narrowly tied to student loans. …

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