Michelle Hartzog is a social worker with the LA County Department of Children and Family Services. When she started at DCFS, she made around $50,000 a year, and she lives accordingly, driving a used car and bringing her lunch to work every day. Her job is to help kids who have been abused or neglected. “When I found out that there was a proposal to eliminate Public Service Loan Forgiveness,” she told me, “I immediately felt sick with worry.”
Signed into law by President George W. Bush in 2007 with bipartisan support, Public Service Loan Forgiveness (PSLF) allows people in certain nonprofit and public-service jobs who have worked full-time for 10 years and made 120 on-time payments to have the remaining balance of their federal student-loan debt forgiven. Participants must be enrolled in one of four eligible repayment plans and have federal loans from, or consolidated into, the William D. Ford Direct Loan Program. The percentage of their income PSLF participants are expected to devote to repayment each month has fluctuated under different administrations and is now around 10 percent.
Thirty-three, married, and expecting her first child, Michelle said that she and her husband waited to have children until they could afford to spend an additional $1,202 a month on childcare, on top of the hundreds of dollars a month they must set aside to repay Michelle’s loans. Michelle has made around 80 of the 120 required payments and is depending on having the remaining balance forgiven in about three years. Without PSLF, she said, “my career and my financial future, including the economic well-being of my family, will be negatively affected.”
In February, the Prosper Act, introduced in the House of Representatives by Representative Virginia Foxx (R-NC), moved out of the Committee on Education and the Workforce, which Foxx chairs. If passed in the House, the bill—which has garnered opposition from dozens of education groups, including the American Association of University Women, the Association of Public and Land-grant Universities, and the American Council on Education—will increase higher-education costs and make it easier for predatory lenders and high-priced, low-performing institutions to exploit students. It would also eliminate PSLF.
Expensive advanced degrees are required to enter and/or advance in many public-service jobs, including social work. Ending PSLF would make it extraordinarily difficult for low-income people to obtain these degrees and significantly harder to recruit educated young people in high-need fields like social work, where the median annual wage is $46,890 and 69 percent of workers are over 35. The demand for social workers, especially in health care and social services, is growing, but pay has remained stagnant and workers are aging out of the field.
Ending PSLF would particularly hurt women, who hold the vast majority of jobs in many public-service fields, including social work, public libraries, public schools, and nonprofits. American Association of University Women (AAUW) research shows that women graduate from college with $1,500 more in average accrued student debt than men. Black women, who take on more student debt on average than members of any other group, are especially vulnerable.
Alli L., a 30-year-old social worker in Fort Lauderdale, Florida, earned her master’s in social work from Columbia University and graduated $100,000 in debt. She works three 13-hour shifts per week in the emergency room of a pediatric hospital, has a second job as adjunct faculty in a graduate social-work program, and spends hundreds of dollars a month on loan repayment. “I had to get a second job to make enough money to live,” she told me. Discovering she was eligible for PSLF was a “big relief.”
The same is true of Tim Tully, 28, a senior librarian at the Brooklyn Public Library’s Business and Career Center who works five to seven days a week over two jobs. Tim, who connects small businesses, startups, and individuals with needed resources, said he wouldn’t be in public service if PSLF didn’t exist. His monthly loan payments impose a substantial burden, but at least with PSLF, the end is in sight. Like Michelle, he brings his lunch to work every day.
Madelyn Loeb-Huband, a 28-year-old OB/GYN social worker in New York City who counsels pregnant teens and women and spends around $500 a month on loan repayment, said not having PSLF would make it “much harder for me to even consider being able to save any substantial amount of income…let alone pay off my loans.” With PSLF, Madelyn is on track to finish paying off her loans in six years. Without it, she’d be stuck paying for an additional 20 years or more, “which seems unimaginable.”
PSLF was “integral” to Callie Woodard’s decision to “pursue a career I love in a way that made sense financially.” A 30-year-old social worker with the LA County Department of Children and Family Services who graduated $75,000 in debt, Callie currently owes over $50,000 and hopes any remaining balance will be forgiven in about four years. Believing she’ll eventually get some financial relief has been “a light at the end of the tunnel.” She and her husband have an almost-2-year-old and pay $1,000 a month toward their combined student debt—which, she pointed out, is roughly equal to their childcare costs. Losing PSLF “would impact our ability to buy a home, have more children—our entire lives.”
As hard as it would be for these people if PSLF were to disappear, Isaac Bowers, director of law-school engagement and advocacy at Equal Justice Works, a nonprofit for lawyers seeking to build careers in public service, stressed that it’s not just about individual borrowers: “It’s about communities and the people we serve. [It’s about] being able to serve as therapists in VA hospitals or become prosecutors to help protect our communities or go into public health to help treat people who are addicted to opioids. Those are the people PSLF really affects: the people who get or don’t get services.”
Michelle agrees. “[If PSLF disappears], we’re going to have a bigger shortage of social workers,” she said. “It will negatively affect the kids we’re trying to help. We won’t be able to investigate as many child-abuse cases because we won’t have enough staff.… If they cancel the program, I don’t see a younger, newer, fresher wave of social workers coming up behind us.”
Nevertheless, said CJ Libassi, an education-policy analyst at American Progress, those currently on track for forgiveness don’t necessarily have cause for alarm. “Every proposal that I’ve seen [to eliminate PSLF] says it will grandfather in people already in repayment,” he said.
While defending PSLF as crucial to their profession, most people I spoke with acknowledged that it can be difficult to use in its current form, and some said outright that it’s confusingly or deceptively run. Part of this stems from the fact that the Department of Education (DOE) hired a company called FedLoan Servicing, also known as Pennsylvania Higher Education Assistance Agency or PHEAA, to administer certain programs, including PSLF. FedLoan has since given borrowers information that was later contradicted by the DOE. In 2016, the American Bar Association (ABA) and four individuals sued the DOE after the department rescinded the ABA’s status as a PSLF qualifying employer, and FedLoan started issuing denials to ABA employees attempting to participate in PSLF.
In response to the ABA’s lawsuit, the DOE has argued that decisions issued by FedLoan on its behalf are neither binding nor “final”—a defense that is understandably baffling to borrowers who must coordinate with FedLoan Servicing in order to participate in PSLF. On March 2, the ABA filed a motion asserting that it “has struggled to recruit and retain qualified individuals to serve its crucial public interest mission,” because ABA employees cannot ascertain their PSLF status and individual plaintiffs have been “unable to make major financial and life decisions until they know when, or if, their loan balances will be forgiven as promised.” That suit is still pending.
Separately, a state court judge ruled on March 1 that Massachusetts’s attorney general can move forward with a lawsuit alleging that FedLoan Servicing engaged in deceptive practices that caused public servants to lose benefits and financial aid and prevented them from making qualifying monthly payments under PSLF and another federal program.
Still, for those who qualify and are scrupulous about following the rules, “PSLF is a really good thing,” said Libassi, and borrowers “shouldn’t be afraid to use it.” Critics and defenders alike agree that the program’s problems should be addressed—but the borrowers who rely on it want PSLF to be clarified and expanded, not scrapped.
For a program Republicans like Foxx consider wasteful and overgenerous, PSLF is severely underutilized. Critics often cite the Congressional Budget Office’s estimate that PSLF will cost nearly $24 billion in the next 10 years. But, as Isaac Bowers explained, “Any cost estimates are really just guesses right now because there’s no official enrollment in the program…[and] no guarantee without more longitudinal data of how many people will actually end up earning forgiveness.” Despite estimates that around 25 percent of the national workforce could potentially qualify, as of March 2017, just over 550,000 people were attempting to use it.
Furthermore, as Bowers pointed out, it’s unclear whether anyone has ever actually had loans forgiven under PSLF. The earliest anyone was eligible to apply for forgiveness was October 2017. The DOE told CNNMoney in February that it was “unable” to say whether any application for forgiveness had been approved or rejected to date.
Extracting that information is a challenge. The first FedLoan officer I spoke with told me PSLF data is “not publicly available.” The next said I needed to speak to someone at DOE. One DOE spokesman promised to e-mail me a fact sheet and didn’t. Another asked me to submit my request in writing when I reached him on the phone. Eventually I was told that, of the approximately 7,500 applications for PSLF received as of January 5, 2018, “Fewer than 1,000 people are expected to be eligible for a loan discharge under the PSLF Program in Fiscal Year 2018.”
All of which makes Geoff Hinchliffe, 62, a medical social worker at Brooklyn Methodist Hospital and in private practice who has lived in Brooklyn for 35 years, worry for his younger colleagues.
Geoff earned an undergraduate degree from Queens College and a master’s in social work from Hunter College. Because his family couldn’t help him pay for school, he is “eternally grateful” for those institutions. “I feel like the city really paid for my education,” he said. “I worked as a dishwasher and a line cook and was able to go to school full-time and live in Manhattan in my own apartment for something like seven or eight years, without taking on any significant debt. I took out one small loan years ago, and I was out of debt by the time I started working.”
Geoff encourages aspiring social workers to go to Hunter. “It’s crazy to pay $50,000 a year for a social-work degree,” he said. “If you’re a social worker, nobody gives a damn if you went to an Ivy League school.”
Tess Riabokin, who just started the clinical-social-work program at Smith College, knew Smith had one of the most expensive programs, but also one of the best. Tess is “banking on” PSLF to help manage the over $100,000 she expects to owe by the time she graduates.
Even in social work, degrees from prestigious institutions can open doors. Besides, some I spoke with said, it’s unfair to penalize ambitious young people for failing to grasp the full implications of financial decisions made in their early 20s—a point with which Geoff sympathizes. “I was not very mindful about money back then,” he admitted. Had Hunter not been an option, “I may have just forged ahead and found myself deep in debt.”
In 2012, Foxx said on Watergate burglar G. Gordon Liddy’s radio show that she has “very little tolerance” for people who graduate with significant debt. A North Carolina resident who attended the University of North Carolina at Chapel Hill, she prides herself on never having borrowed “a dime” to fund her education. But when she graduated in 1968, resident tuition at UNC was $175 a year, or around $1,275 in today’s dollars. In 2017, it was $6,882.
“You can say ‘personal responsibility’ all day long,” said Tim Tully, “but the fact that there’s $1.5 trillion in student debt shows this is a systemic problem”—one that getting rid of PSLF would only entrench.