Thursday, February 15, 2018

7 reasons why we are saying no to Public Service Loan Forgiveness

Some are predicting student loans to be the next financial crisis. Whether or not they will pose a problem in the future, many already feel their pain now. They prevent people from getting married, having children, or even buying a home. Yet they are also considered to be a norm when it comes to getting an education.

Before my husband went to law school in his 40's, we had been officially debt free for a couple of years. He and I both knew he needed to change careers, and as much as we didn't want to do it, we knew we'd have to borrow some kind of money to pay for it. After reading blogs of debt-free living, it was really hard to go into debt again, and it's been even harder to get out of it. But we also knew what we were borrowing and did our best to keep expenses down.

When he graduated, my husband continued working for the state and under the Public Service Loan Forgiveness program, he could technically qualify for having all of his student loans forgiven after ten years of public service. I don't question the forgiveness program itself - my husband makes a decent amount below the going market rate in exchange for working for the state and has only seen one small bonus in his first year. My brother-in-law got a free ride to medical school in exchange for becoming a doctor in the Air Force. In my mind, working for the public or a non-profit and getting your loans cancelled in 10 years offers more incentive for professionals to serve those in need.

But we have talked over this several times and decided that we are not pursuing the Public Loan Service Plan. If an emergency happened that required all of our extra income, and did that for 10 years, we might consider it, but there are so many other reasons not to, like these:

1. It feels too long.
Even though the average repayment program is 10 years, there is something we really crave in being free of this debt in less time than that. If we spending the money on other things

2. It's too uncertain.
With the latest administration changes, it seems that many programs in the Department of Education are under scrutiny, including this one. Lawsuits have been filed over miscommunication on what type of loans qualify, or which months of work will count toward your 120 months of service. We have the type of loans that do qualify, but when I looked at the forms it wasn't something where you could sign up, get admitted to the program, and then start tracking your accrued months. They seemed to say that when you finally accrued your 120 months you could then apply for forgiveness. Allowing interest to accrue over 10 years just seemed to risky.

3. It would close off options for us that might open up in the private sector.
My husband is happy with his job, but things can always change, or he might decide to switch his focus in a couple of years - we don't really know. If he was locked into public service, it would become increasingly difficult to switch to something that might be better for him down the road.

4. We have debt, but not so crazy that there's no way we could pay it off.
There are other things we would love to spend our money on - a good private school for our kids, home improvements, or vacations. But we both feel a little bad spending extra money on things like this while letting our student loans go unpaid.

5. It's a good exercise to live with less, even when it's painful (and trust me, there are times when it's really painful).
Going through this process of living on a limited budget is nothing new to us, but there are many good lessons to learn from it. Once we are finished we will know how to sacrifice to reach a financial goal or cut back on spending if an emergency occurs. It also helps us to remember what the good life is all about.

6. We'd probably not spend it very well if we didn't put it toward debt.
Have you ever noticed that the more money you have in your bank account, the easier it is to spend it? This happens to us around Christmas when we get gift money or on our birthdays. I know that if we saved all of our extra income, more of it would be spent on impulse purchases or things we don't really need because we had the money. It's better in my mind to keep things lean so that we're not tempted to overspend.

7. As bad as it feels to pay so much, it also feels good to pay back what we borrowed.
I am looking forward to the day where we see zeroes in our remaining balances and knowing the hard work we put into our debt was worth it. We borrowed this money to go to law school and it will feel good to pay it back.

What about you? If you had the chance to get loan forgiveness after 10 years of service, would you take it?


  1. Just seems it would make more sense to let folks pay off their debt for 5 years and then have the government pay it off if they've continued to work in the public sector during that time. Or seven years or whatever they determine the time to be.

  2. It all sounds very reasonable. I think if you are not sure you want to work there for the amount of years needed, it's really good to keep your options open. Good luck!


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