A Student Loan Subsidy for Government
A federal judge recently blocked the Trump Administration’s effort to rein in a giveaway for higher-education graduates who work in government or social advocacy. The message to Republicans in Congress is to get with it and limit this student-loan subsidy favoritism.
The 19-year-old Public Service Loan Forgiveness program is the monster progeny of George W. Bush and Nancy Pelosi. Its initial goal was to encourage young people to pursue jobs in government and at nonprofits, though these lines of work no longer need subsidizing, if they ever did.
Graduates can have their debt discharged after working 10 years for government or a 501(c)3 nonprofit and making modest payments during that time. As of January, the government had discharged $90.6 billion for some 1.2 million borrowers, averaging $75,000 per person. The aggregate limit for undergraduate loans is $31,000 for students who are dependents, so this means most beneficiaries have advanced degrees.
The left-leaning Student Borrower Protection Center estimates that more than nine million workers—roughly a quarter of federal student loan borrowers—are eligible for the program. An Education Department report last year found that the biggest beneficiaries are employees in K-12 schools (28%), higher education (15%), and healthcare nonprofits (12%).
