If you’re like 70% of Americans, you used some kind of loan to pay for your college degree. And, again, if you’re like most, you’re still repaying that loan—sometimes well into your career. Estimates from 2019 suggest that the average college graduate has $30,000 in student loan debt when he walks down the aisle in his cap and gown. Extrapolate that, and you end up with $1.6 trillion in student loan debt across the nation. And that number increases daily. Thank goodness for the Public Student Loan Forgiveness Program.
The Public Student Loan Forgiveness program was established in 2007 under the College Cost Reduction and Access Act of 2007. To qualify, applicants need to have made
120 monthly payments under a qualified repayment plan and be employed full time for a qualifying employer. These employers are typically government agencies or nonprofits. Additionally, the Teacher Student Loan Forgiveness program is for teachers with five years of experience working in low-income schools. By entering into the program, the remaining balance of the student loan is forgiven after meeting those qualifications.
All Good Things…
While the Public Student Loan Forgiveness program (PSLF) is a fantastic way to reward our public servants and educators, it may be that its time has come to an end.
For the fourth year in a row, President Trump is proposing a federal budget that scraps the PSLF. So far, the proposal to end the benefits program has not been approved—and the Democrats would like to keep it that way.
Originally signed in 2007 by President George W. Bush, those 10 years of payments started ending in 2017. But not everyone is feeling the relief. According to the
Department of Education, only 1% of 110,000 applicants for the PSLF have received any benefits. But as more applicants become eligible for benefits, the costs will be high for the federal government.
Opponents of the PSLF believe that by eliminating the program, billions of dollars will be saved from being forgiven. On the flip side, though, are the supporters, who feel that the lure of having student loans forgiven is what is drawing many graduates into lower-paying jobs in the public sector. And those jobs are incredibly important to the public as a whole because they include the Armed Forces, first responders, educators, and public defenders.
Alternatives to Public Student Loan Forgiveness
With a presidential election just around the corner, it’s a possibility that things could change in the world of student loans. For instance, Democratic candidates Elizabeth Warren and Bernie Sanders have both said they will forgive student loans, whether that is to completely eradicate the debt or put a new program in place.
Warren says she’ll eliminate student loans as soon as she takes office. Her plan is tied to household income, but for the most part, if a family brings home $250,000 or less, their student loan debt would be forgiven.
Sanders would have no stipulations on his student loan forgiveness program. Instead, he plans a sweeping obliteration of what’s due.
Should Trump win in the 2020 election, he still has a plan—although it doesn’t include the Public Student Loan Forgiveness program. In his proposal, borrowers will be eligible for an income-based repayment plan for 15 years, after which the debt will be forgiven.
Of course, such plans are typically not a unilateral decision. First, we will have to see who wins in November. Then, the president will need to work with Congress to determine what steps are next.
The Role of Employment Verification in PSLF
Regardless of what the future brings, for now, we have the program President Bush signed into effect in 2007. That means borrowers will need to have their employment verified. And that’s where i2Verify can help.
i2Verify helps verify that current or former employees of our clients are working in a role that is currently eligible for the Public Student Loan Forgiveness program. i2Verify does this by automatically completing all required PSLF forms, so employees always know where they stand. And that might even help attract the right employees because they know their employment is tracked and verified. Sounds like a huge win-win—no matter what happens in November.
How Employment Verification HelpS
At i2Verify, we work closely with Human Resources teams by managing the time-consuming and costly employment verification process for all of their current and former employees.
HR teams that outsource employment verification to i2Verify rest easy knowing that the employment verification process is being taken care of and are able to place focus on other critical tasks. i2Verify works directly with all lenders, background check vendors, and government agencies to make sure that we fulfill all employment verification requests securely and quickly.
This means that when a verifier such as a lender requires a verification of employment to help an existing employee refinance a mortgage, i2Verify works directly with the lender to fulfill the request, so your HR team can help employees with other initiatives.
Additionally, i2Verify assists employees with the completion of other time-consuming forms, including Public Service Loan Forgiveness, so employees always know where they stand. Plus, our leading employment verification platform is free for employers, employees and social service agencies and includes access to a dedicated employee portal.
Contact i2Verify for information on our employment verification platform.