…to the detriment of those who relied on it.
Well, the PILF programme (public interest loan forgiveness) isn’t quite out of money yet, but it is on the chopping block in 2015. The change.org petition says:
The Presidents proposed 2015 Budget includes a provision that will change the Public Interest Loan Forgiveness (PILF) program by capping overall forgiveness to $57,500. This change only hurts the hard working employees who work by serving their community often in low-wage jobs. These individuals’ student loan amounts often exceed the cap as they consist of people with more than a college degree: Social Workers, Speech Pathologists, Lawyers, etc. These dedicated public servants chose to work for the public good with the added promise that their dedicated service of 10 years would be rewarded with complete loan forgiveness, only to have the rug pulled out from underneath them by a misstep by the administration. Please sign this petition and support those who work to help you.
(Hat tip: the many emails I’ve received from the ABA, asking me to sign onto this petition.)
The original idea behind PILF was that the government would help out the few dedicated public servants who needed help. What happened (inevitably) is that graduates flocked to public service jobs, deciding that loan forgiveness after ten years was better than twenty years of payments. Those who would have left for the private sector after a few years continued to hang on to their jobs. Universities continued to increase their tuition, knowing that their students would not be responsible for paying it all back.
Unexpectedly, this boondoggle cost more than initially thought, as more graduates took advantage of it and sought higher amounts of debt forgiveness than originally planned. So now the plan is to limit loan forgiveness to $57,000, an amount that is wholly inadequate for those who have taken on $200,000 worth of non-dischargeable debt.
As I’ve told many prospective law students and college students, debt forgiveness is current government policy, which is a far cry from an enforceable right that will still exist ten or twenty years from now.