Student Loan Forgiveness

[YULACU]

My employer at the time, an S&P 500 company paid for my MBA. I considered it part of my total compensation.

I view the forgiveness of loans for working in a government position as the same thing. What we really need to is come up with a number- the salary, benefits and loan forgiveness and then we can have a debate if it is appropriate for a job title.

I suspect there will be student loan reform in the near future. Perhaps they'll tie the amount forgiven to the job field, but it seems sorta administratively cumbersome.

[disneysteve]

There isn't a limit on how much can be forgiven. The Obama administration floated the idea of a cap around $57k in a budget proposal, but they received a lot of push back from borrowers and universities.

Imagine that? Schools didn't want to lose a source of unlimited funding. Students didn't want to lose a perk that would let them borrow an unlimited amount and never have to repay it. What a surprise.

I have no problem with the forgiveness program in theory. I think the people that agree to work in underserved areas deserve adequate compensation and if they can't get it through salary, I'm fine with them getting it through loan forgiveness. I just don't think the amount should be unlimited.

[AJ444]

True, but did your employer have a cap on that benefit? Was there a maximum amount they would reimburse?

My employer has tuition reimbursement up to a certain amount. It is not unlimited.

No max, but the VP of my dept had to sign off on each class before I signed up for it. Cost them 25k over 3 years. I was a lucky, they cut the program while I was enrolled but let anyone already enrolled finish, this was back 01-04.

[Mjenn]

I think student debt forgiveness is a good thing and while sure, money borrowed is money owed, I certainly know many businesses and good business people that have finagled themselves out of various loans based on agreements and forgiveness.

My husband's student loans are all forgiven when he reaches 65 years old and all of his payments are based on a percentage of his income. I was rather shocked to realize he will probably pay off all of his debt by his 40th birthday. Given he borrowed close to the maximum (their university is free but they borrow living expenses) I think it will be hard for most people to have a great deal of debt forgiven at 65. You have to be a very low income earner!

I do have a few friends that got medical degrees and chose to move to remote areas to serve poor segments of the population as well as teachers who opted for Masters degrees and in exchange taught in bad neighborhoods for years. I think that is a fair exchange and a good incentive to fill otherwise hard to fill jobs. It is really a win-win.

[disneysteve]

I do have a few friends that got medical degrees and chose to move to remote areas to serve poor segments of the population as well as teachers who opted for Masters degrees and in exchange taught in bad neighborhoods for years. I think that is a fair exchange and a good incentive to fill otherwise hard to fill jobs. It is really a win-win.

Agreed, but should there be a limit? Should the taxpayers be paying for both the guy who went to the state school and borrowed 30K and the girl who went to the Ivy League university and borrowed 200K?

If there is no limit on how much debt can be forgiven, there is zero incentive for anyone to choose a less costly school. For most people, price is a significant factor in selecting a college. I see no reason why that should be any different for folks who plan to take low paying jobs after they graduate. If anything, it should be more of a factor for those students but unlimited loan forgiveness turns that equation upside down.

[TrueMaroonGrind]

Agreed, but should there be a limit? Should the taxpayers be paying for both the guy who went to the state school and borrowed 30K and the girl who went to the Ivy League university and borrowed 200K?

If there is no limit on how much debt can be forgiven, there is zero incentive for anyone to choose a less costly school. For most people, price is a significant factor in selecting a college. I see no reason why that should be any different for folks who plan to take low paying jobs after they graduate. If anything, it should be more of a factor for those students but unlimited loan forgiveness turns that equation upside down.

My wife was going to get some of her student loan debt forgiven for teaching in low income, low performing schools in Mississippi. The max that could be forgiven was $15,000 dollars after teaching in the school for 5 years. Your administration had to recommend you for the $15,000. If they didn't you would get $5,500. There is a limit for some forgiveness programs, but I'm not sure if this is specific to teaching or specific to Mississippi.

[Mjenn]

I think that most of the programs I have seen and heard about have had a cap. Which I think is a good solution, but yes, an Ivy League student would still get more money because they pay more.

Personally I think if they can manage to get a few Ivy League students to these hard to fill positions they are lucky and that is kind of the point of the program. My issue is with the lawyer mills that charge a small fortune to pump out countless numbers of lawyers who have hundreds of thousands of dollars of debt from schools that exploit them but have no real chance of a good job, so need this debt forgiveness to survive.