Public Service Loan Forgiveness

Last week the Education Department filed a reply in response to a suit launched by four attorneys and the American Bar Association. In the letter, the Education Department stated that despite earlier promises, public service workers, even those given prior approval, may not be eligible for loan forgiveness after all. The decision will not only impact public lawyers. Over the past decade, thousands of American teachers have also qualified for loan forgiveness under the program. With the program now in jeopardy, teachers will suffer but cutting the Public Service Loan Forgiveness program will hurt public education too.

The Public Service Loan Forgiveness Program

To date, more than 550,000 people have enrolled in the federal program designed to help students repay their student loans. Not everyone is eligible and not all loans qualify. Indeed, just to qualify one has to make a considerable effort (in some cases, even restructuring loans). For those who do qualify, however, there is (or at least, there was) a big payback: After ten years of on-time loan payments, the government forgives any remaining student loans.

The terms of the program are clearly stated on the government’s website: “The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.” Qualifying employers include government organizations at any level (federal, state, local, or tribal), not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code, and other types of not-for-profit organizations that provide certain types of qualifying public services.

Most Public School Teachers Don’t Make Enough to Pay Back their Student Loans

Let’s be frank—in most U.S. states, American teachers barely make enough money to scrape by. Last summer, I spent several months compiling data on teachers’ incomes and the cost of living across the United States for Tobecomeateacher.org. In most regions, the outlook for teachers is depressing. Using salary data from the U.S. Bureau of Labor Statistics and cost of living data from MIT’s Living Wage Calculator, I discovered that in most regions , a public teacher attempting to support a family of four on their income would have little or nothing to spare after covering their basic expenses. This means that paying back a large student loan would likely take a life time and may never happen.

To put things into perspective consider just a few state-based salary versus living wage estimates for teachers. According to MIT’s Living Wage Calculator, in Arkansas, a family of four with one working adult needs at least $48,325 to cover basic expenses, including housing, transportation, food, and medical expenses.  The average salary for an elementary teacher is the state is only $46,950. Simply put, someone supporting a family on the average salary of a public elementary teacher would not only be just below the required salary needed to cover their basic expenses but have nothing left over to pay back a student loan.

While the number do fluctuate from state to state, in most cases, teachers report annual incomes just below or just above the required living wage for a family of four and in most cases, their annual salaries hover between the high $40,000 range and low $60,000 range. In some states, such as South Dakota, the average salaries for teachers is much lower ($43,000 and $44,000) and new teachers do not even come close to cracking the $40,000 threshold. In other states, such as New York State, California, and Massachusetts, teachers do report much higher incomes (anywhere just below or just above $80,000) but anyone who has attempted to raise a family of four on $80,000 in Manhattan, San Francisco and even Boston knows that these wages are far from high rolling in any of those markets. Indeed, in states where teachers report the highest incomes, the cost of living in is generally much higher and they are left with just as little to spare as their colleagues working in states with lower reported annual salaries.

Cutting Public Service Loan Forgiveness Will Hurt K-12 Public Education

There are many reasons why cutting Public Service Loan Forgiveness will hurt public education.

First, teachers simply don’t make enough money to pay back their loans. As already demonstrated, the numbers simply don’t add up. No one becomes a teacher with the goal of establishing a high-rolling lifestyle, but most people who enter the profession do hope to establish at least a decent middle class existence. In the United States, this is increasingly impossible. A growing number of American teachers are worried about paying their rent, paying their mortgage, buying groceries, and fill up their car with gas. Paying back a large student loan when one can barely make basic payments on their home or car is impossible.

This leaves teachers with essentially two choices: Either they can start to take on side gigs or leave the profession. Both are bad news for K-12 education.

When teachers take on side gigs (e.g., tutoring for a private company or doing curriculum development or editing for a publisher), they have less time to prepare for the classes. It also means that they are likely do not have time to pursue additional degrees or qualifications in the field. Over time, this means that there were also be fewer teachers qualified to assume vice-principal and principal positions. So, theoretically, the side gig trend among teachers will also eventually lead to a leadership vacuum in K-12 public education.

Teachers who cannot sustain a full-time job while also tutoring, coaching, writing, and editing on the side simply leave the profession. Any principal will tell you that high attrition among staff is bad for morale, back for school ratings, and bad for students.  A revolving door places a school in crisis mode, and this affects the school’s quality of education.  Hiring and training new staff is also a costly endeavor, so high turnover of staff also takes precious dollars away from other parts of the public education system. Of course, attracting the best and brightest people to the profession is difficult.

Increasingly, smart graduates simply don’t want to pursue a career in teaching. They know it is no longer a viable option, and for this reason, applications to education programs continue to decline nationwide. Over the past decade, the Public Service Loan Forgiveness has been helping to keep at least some of the nation’s best and brightest in the teaching profession. The promise that one’s loans might be forgiven is a major incentive to at least consider teaching at a time when teaching no longer offers much hope of even a resulting in a middle-class lifestyle.

With last week’s announcement that the Public Service Loan Forgiveness can’t be trusted, it seems likely that admissions to education programs will continue to plummet, the quality of the nation’s teachers will in turn suffer, and more states will find themselves recruiting and hiring unqualified staff to fill core positions in their schools. Teachers will suffer but in turn, schools and students will suffer too.  When one attacks schools and students, of course, there are always long-term consequences that reach far beyond the school system.

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