If you signed up for the Public Service Loan Forgiveness program (PSLF) about 10 years ago, chances are you will still have to pay on your school loan debt next year.
Former President George W. Bush signed the PSLF program into law in 2007 as a way to aid student borrowers in affording loan repayment based on their income. The program would require at least 10 and up to 25 years of repayment, and at the end of that period the remaining balance would be forgiven.
Well, we’re coming up on the 10-year mark of the program and unfortunately the Government Accountability Office, who are responsible for budgeting the program, is expressing the underestimation of the costs, inflation, and student borrower growth is causing the program to not be able to forgive many loans in 2017. They expressed this finding in a 100-page report.
Because of this underestimation, it simply means that the government will have to pay more to forgive student loans than they expected. Whether it’s ethical to then require students who could have been eligible in 2017 to now continue paying on their loans in order to lessen the government’s bill depends on your stance.
It’s really just a lot of confusion and unpreparedness that seemed to be pushed off until the last minute. Critics have stated there were many ways the situation could have been handled including using subsidies to aid the program and even using a completely different department to handle the budgeting.
It’s understandable that there must be some type of structure and limits within the program. The government’s bill is high due mainly to undergraduate and graduate student borrower increase with uncapped loan amounts. The GAO also didn’t correctly calculate inflation and how that would affect, or not affect, students’ income.
So, now that we’re in the last month of 2016, it’s time to finally to start taking action to combat this issue, even though (like many government issues) could have been avoided with better planning.