I was recently informed about this program: Public Service Loan Forgiveness (PSLF) Program.
As a taxpayer, this type of perverse incentive really grates me. It appears that we are getting hit twice. First, taxpayers pay the salary of these employees (which is fair since it’s their labor). However, they get a carve out and have us pay for their remaining student loans. That is not cool at all and they’re hitting the piggybank we’re forced to pay into twice. We’re already paying the salary they can use to pay off those loans and now we’re also forced to absorb the cost of those loans. I don’t know who came up with this program but it stinks.
In contrast, if a private arrangement is made to forgive a loan or donations are gathered, that’s cool, I have no dog in that fight. The difference is a forced versus voluntary action.
I’ll also say the loan forgiveness thing at taxpayer expense is rotten in general (regardless of who benefits). It’s a slap in the face to people who opted to save, work, or serve in the military to pay for college and leave with no debt as well as those who worked and paid off the debt they incurred. I remember several friends in college who worked full time while attending or made military commitments and sacrifices to pay their schooling. Those same folks who labored and bore the cost are now told to involuntarily pay off someone else’s loan. That is just awful and it teaches an irresponsible lesson to future generations.
Finally, this isn’t the first government program the promotes entitlement and dependency. Several years ago I highlighted the destructive and indoctrinating nature of the school breakfast for all. That brings me to an exit question/information request:
The free school breakfast and ‘come to the park to eat lunch for free’ programs (i.e. force your neighbors to pay for your lunch) are bad enough that they are open to everyone, rather than means tested. But even if means tested, they make no sense. Wouldn’t the same folks who would qualify also qualify for food stamps? If so, you would expect that they should have their SNAP benefit reduced by a comparable amount, right? Having both programs overlap, besides being wasteful, sure makes it sound like those receiving food stamps are not using them to purchase the food to feed their children – to me that sounds like there is a bigger problem afoot and while I’m not a big fan for child services intervention, having the means to feed your child but not doing so sure looks like something they should look into.
If there isn’t overlap between the programs and why they aren’t means tested, I would be interested in getting some sources of info to read. Please refrain from articles about it being government’s job to feed everyone – it will fall on deaf ears as we don’t have a duty to feed our neighbor and his kids when he makes $500K/year but blew his grocery budget on a new yacht (if people have prioritization issues, that’s their problem).
UPDATE (further reading): Here’s an article on the PLSF from Brookings from 2016: The coming Public Service Loan Forgiveness bonanza (I guess the bonanza is moving forward) and an article a couple of alternative student loan suggestions to think about: Two Conservative Ideas for Fixing Student Loans (see also Fixing student loans—the right way). Finally, here’s a bit of perspective from CNN (Wealthy Borrowers Will Benefit Most From Elizabeth Warren’s Student Debt Forgiveness Plan) and Brookings (The Typical Household with Student Loan Debt).