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An investment in higher education is an investment in your future. For many people seeking to become lawyers, doctors and other public service employees, part of that investment requires taking out large loans to pay for school. Since 2007, those entering full-time careers in the state, local, or tribal governments, 501(c)3 organizations, AmeriCorp, or the Peace Corps could apply to have much of that debt forgiven through the Public Service Loan Forgiveness program (PSLF). Now, however, new student loan borrowers may not qualify for the program.


Updated details emerged on Dec. 13 when Republicans in the House of Representatives voted 23-17 to advance the PROSPER Act, a higher education bill that would completely eliminate the PSLF program. This elimination is an attempt, according to House Republicans, to simplify the federal financial aid system by making only one loan, one grant, and one work-study program available per student. The millions of people who are already enrolled in the program would be grandfathered into another program that allows people to make loan repayments based on their incomes, but that would not ultimately forgive outstanding debts after 10 years like PSLF is designed to do.
The fate of student loan repayment under PSLF is now in the hands of the House of Representatives, where both parties must vote in favor of its approval in order for it to go to the Senate and ultimately be signed into law by the President.

The Future of the PSLF

For now, students going into public service careers and who were going to rely on a public loan to get through school should use caution. Student loan repayments can break the bank, and if loan forgiveness is an unclear path, living a comfortable life financially may be hard to come by – mostly because many participants in the program earn a much smaller annual income than the amount they owe for higher education. Entry level public defenders, for example, only earn up to an average of $58,400 a year, whereas the average cost for law schools is around $46,000 in the private sector, $26,300 for the public in-state sector, and $39,600 for the public out-of-state sector. Basically, the average public defender will owe 67 percent of his or her salary to pay for their degree after graduating.

While the future of PSLF student loan repayment is unclear, there are still plenty of options out there for students. Depending on your career status, you may qualify for the Closed School Discharge, Teacher Loan Forgiveness, Perkins Loan Cancellation and Discharge, Total and Permanent Disability Discharge, Unpaid Refund Discharge and more. The qualifications for these plans differ, but finding out the right information and determining what is right for you is only a phone call away.

Learning how to navigate educational expenses doesn’t have to be a burden. Give us a call today to learn how to plan and manage your debt for a future that will stay clear, no matter the obstacles that come your way.

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