About a quarter of the U.S. workforce services the public — such as teachers, nurses, firefighters and law enforcement officers — and most of them are not aware of programs that forgive federal loans, including accumulated college debt subsidized by the government.
The U.S. Consumer Financial Protection Bureau (CFPB) said it has launched a toolkit “to empower school districts and other public service organizations” to help their employees pay off student loan debt.
The CFPB is asking these employers to make a pledge to inform their employees of their options.
“Our young people should not be mired in debt because they stir themselves to the call of public service. They deserve to know all their options,” said CFPB Director Richard Cordray. “Our toolkit and pledge can be a win-win for employers, the public they serve, and their employees who are facing student debt loads that are imposing unprecedented burdens upon this generation.”
In 2007, Congress created the Public Service Loan Forgiveness program for “public servants” who pay their federal loans on time for ten years. People working at a nonprofit, or those working for a federal, state or local government, are eligible for the program.
Those who qualify include teachers, librarians, firefighters, military personnel, law enforcement, first responders, nurses, and social workers, the CFPB said.
To help employers provide information about loan forgiveness programs to their employees, the CFPB is unveiling the Employer’s Guide to Assisting Employees with Student Loan Repayment.
The toolkit offers practical advice to public sector employers and employees, advising that an early start can make the difference of thousands of dollars.
The toolkit is available here.
Tips that the toolkit mentions:
Taking advantage of the Income-Based Repayment plan, a federal student loan program that allows all federal loan borrowers to set their monthly payments at a fixed percentage of their income;
Checking out Repay Student Debt, a web tool that can help borrowers understand all of their repayment options for both private and federal loans; and
Including student loan forgiveness programs in benefits packages when employees commence work, during open season for benefits enrollment, and when sending out IRS W-2 forms.