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Making student loan payments on a teacher’s salary can be a challenge.
The good news: Public service employees, teachers among them, qualify for student loan forgiveness programs. The bad news: The requirements for these benefits can be complex and confusing, according to an August report from the Consumer Financial Protection Bureau.
As a means to recruit and retain talent, many employers have developed loan-repayment programs during the past decade. In 2007, Congress established a loan-forgiveness program for those working in public service.
The CFPB estimates that more than a quarter of the U.S. workforce holds a job in public service, which includes teachers, librarians, firefighters, military personnel, law enforcement, first responders and social workers.
In the 2007 law, Congress defines a public service employee as “one who is employed with a federal, state, or local government agency, entity or organization, or a non-profit that has been designated as a 501(c)(3) tax-exempt organization,” according to the CFPB report.
Here’s where things get complicated: Some of the benefits in these various programs overlap, creating dilemmas and confusion for the people they’re supposed to help. And not all loans qualify for certain programs, adding another level of complexity.
In the report, the CFPB highlights possible solutions to the programs’ shortfalls: Employers could modify their programs to complement the federal program, and they could better educate their employees to maximize the benefits they reap from such programs. The report also suggests policymakers simplify the loan-forgiveness process for public service employees.
Meanwhile, it’s always important for those with education loans to know their options. Current and future students should consider the relationship between their potential careers and their debt burden, and those in the workforce should see what’s out there for borrowers in their professions. Talking to one’s employer and reviewing the benefits package wouldn’t hurt, either.
Image: iStockphoto
August 26, 2020
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