Help Available for Public Servants Drowning in Debt

Stay in public service for 10 years and have the remainder of your federal debt forgiven.

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A number of articles have appeared in the press in recent weeks about students graduating with advanced degrees, mortgage sized-debts, and few job prospects to pay it back. These stories come as no surprise to those of us who advocate for educational debt relief programs. The amount of student debt that many young professionals have incurred is indeed staggering—even if the graduate has a job.

Law school students have been the focus of many of these articles. According to the American Bar Association, the average annual private law school tuition has more than tripled since 1985, growing from $7,500 per year to $34,000, with many top-tier schools now exceeding $45,000. It is not uncommon for law school graduates to accumulate $150,000 in educational debt. This amount of debt takes years and years to overcome.

[Learn more about paying for law school.]

What is surprising is that few of these articles have mentioned the sweeping legislation enacted three years ago: the College Cost Reduction and Access Act (CCRAA). CCRAA enables anyone with qualified federal loans to pay back their educational debt on a sliding scale based on their income (Income-Based Repayment).

It also established the Public Service Loan Forgiveness program, offering loan forgiveness for those working in the public service sector. If someone stays in public service (which includes nonprofit organizations) for 10 years, the remainder of the federal debt is forgiven. This forgiveness program is not just for lawyers, but also nurses, teachers, police officers, civil servants, and countless others in public service jobs.

[See how the government helps low-income grad students repay loans.]

We've written about Public Service Loan Forgiveness on this blog before but the information bears repeating. If you have federal student loans and are working for a government agency, a 501(c)(3) nonprofit organization, or a private "public service organization," and you don't know about CCRAA and Public Service Loan Forgiveness, you are missing out on an incredible opportunity to decrease—and eventually eliminate—your educational debt.

Public Service Loan Forgiveness has the potential to positively impact tens of thousands of students who are considering careers in public service, but it is not automatic. Borrowers must take specific actions in order to benefit, and some of the guidelines and rules are complex. Don't let the paperwork overwhelm you. Become your own advocate, find out if you qualify, and if you do, take care to follow all of the processes. It's worth it in the end.

To get started, Equal Justice Works provides free resources including webinars, podcasts, and a downloadable checklist that will help you figure it all out.

Public Service Loan Forgiveness is not the only benefit CCRAA offers those with student debt. Stay tuned next week when we talk a bit more about Income-Based Repayment.

David Stern has worked for Equal Justice Works since 1992 and has served as the executive director for the past 15 years. He graduated from Georgetown University Law Center in 1985. In 2008, Mr. Stern was recognized by Legal Times as one of the "Greatest Washington Lawyers in the Past 30 Years."