Regular visitors to this site know of my interest in solving the student debt crisis. It continues to hurt recent graduates’ ability to meet any financial goals. With big loan payments every month, these young people must put off buying houses and saving for their own future. At worst, their salaries don’t stretch far enough and they end up in default of their loans, which can be a long-term disaster.
But in 2018, some borrowers who are employed full time in public service jobs – including public or private colleges – got a break. The Public Service Loan Forgiveness program forgave $5.52 million in loans – an average of $57,500 per borrower.
In a recent article for an in-house publication, I explained this program to employees of the Community College of Allegheny County. If you meet the criteria, this can be a huge benefit, but you have to invest some time and effort to restructure your debt to take advantage of it.
Stop the debt before it starts
It is also important for us to educate prospective college students on other ways to reduce their student loans, before they sign on that dotted line. For instance:
- Learn real-world money management as a college course.
- Set a budget and stick to it.
- Go to school part-time while working – it may take another year, but your salary will go further in the long run.
- Lower your tuition by doing a year or two at a less expensive community college before transferring to a private college.
This is a multi-generational problem. As the cost of education continues to climb, families are struggling to close the college cost gap. Some students live at home, instead of on campus. Others opt for an online degree. Parents often take out their own loans to pay a share of the tuition, sacrificing their own retirement savings to pay them back. I’m researching other ways to tackle the issue of student debt by analyzing national data sets with the National Center of Statistics. More about that as the project continues.