Quote from tfleuter
Student loans and grants are the governments way of assisting people with their education. Now we need to add loan forgiveness to that as well just....because? I can see why some hospitals would do loan forgiveness in exchange for contract employement or the military offering GI bills and other like programs, but this just seems like a publicity stunt to endear the current president to the hearts of the people. After all, it's just free money from the sky, right
There's some math involved in this. And some important information to consider.
If I may have your attention...
The program stipulates that you must have 10 years of public service and must have made 120 payments to have your loans (whatever remains after making 120 payments) forgiven.
Over the repayment period of their loans, Direct Loan borrowers who have not experienced financial hardship significant enough to warrant a deviation from the standard 10-year repayment plan generally stick with the standard 10-year repayment plan.
The standard 10-year Direct Loan monthly payment for a debt of $20,000 at an interest rate of 5% is about $240.00.
A borrower who is able to make payments at the standard rate throughout the repayment period will have satisfied their obligation at the end of 10 years ($240 x 120 = $28,800).
Conversely, borrowers who
1) Have seen significant financial hardship during the repayment period for whatever reasons (illness, disability, etc. - unforeseen and/or debilitating hardship)
2) Who may have many years in public service for the sake of public service (and not for a stellar paycheck), who are paid less than what their education level and experience might yield in another position (like, maybe...I don't know...a nursing instructor)
May have had to choose a repayment plan that reduces their monthly payment, (such as Extended Repayment for large amounts of debt or Income Contingent repayment for those who simply can't afford to make standard payments) thereby extending the life of their loan such that 120 payments (or 10 years of payments) doesn't satisfy their debt. So the offer is to reward 10 years of public service and
a solid commitment to repaying the debt.
And here I thought nursing folk were all about critical thinking...
All that being said though...It's kind of twilight zone-ish to hear such disdain for a benefit to public service workers from....err....public service workers. That's some weird kind of masochism y'all have got going on.