02 April 2014

Bad Student Loans News In Obama Budget

I've posted nearly ad nauseam about America's student loan crisis/debacle (take your pick). For some recent entries go here, here, and here. My comments have focused on the see-sawing success in discharging student loans in bankruptcy, the federal government's subsidy of student loans, and the abuse of the student loans system by for-profit colleges.

What many law students know is that there is a federal student loan forgiveness program for those who engage in public service after graduation, the Public Service Loan Forgiveness (PSLF) program. Many young lawyers take advantage of this program when they begin their careers as prosecutors or public defenders, which don't pay well to start, or when going to work for more traditional public service organizations.

Current students who are planning to use the PSLF should take note by reading the article here. The President's budget proposes to cap public service loan forgiveness at $57,000, which is well below the amount of loans with which many (most?) law students graduate.

I believe that the entire system of federal subsidies for student loans should be addressed root and branch. But I also believe many other things that are equally unlikely to happen. In the interim, and in the real world of federal electoral politics, current students might want to contact their congressional representatives and let them know your thoughts.

1 comment:

  1. I like the way you write, sir. Concise and to the point. This topic is a real concern for my daughter as she plans to utilize loans to attend Regent Law in the fall. The $57,000 PSLF cap you speak of would still leave her owing 150K! I know that God can make a way out of no way, so I'm going to praying (and contacting my congressman) against this ridiculous proposal. Thank you for relating so well the 'root and branch' of this important issue.