Working with California Attorney General Rob Bonta, the California Borrowers Rights Campaign Monday launched a “California Student Debt Challenge,” a statewide information campaign about student loan forgiveness.
About one million Californians in the public sector are eligible for a loan forgiveness, but only 10,000 have received it since 2007, according to state data. Local leaders want to ensure that as many residents as possible get the relief they are entitled to.
Teachers, firefighters, nonprofits, government employees, and anyone who works in the public sector are eligible for 10-year loan forgiveness thanks to the Federal Public Service Loan Forgiveness program. But it’s a largely unknown program, despite its potential to deliver tens of thousands of dollars in relief for those paying off debt.
For a limited time, the federal government is allowing eligible workers to reclaim funds from past payback periods that they missed, which for some could significantly reduce or completely wipe out their loans. However, borrowers must apply before October 31 to receive these earlier credits.
“October 31 is the key day to get those past credits. It’s a little less, I understand, than three months to put yourself on the path to low or no student debt,” California Gov. Gavin Newsom said at Monday’s news conference. “California, we’re making big changes everywhere, not just to support this program, but to make college more affordable.”
Bonta and a coalition of students, college officials and borrower protection organizations are calling on state and nonprofit employers to “take up the challenge” of educating their employees about these benefits and signing application forms, which are free for them.
“We must ensure that every public sector worker — from teachers to firefighters to nonprofit administrators to government employees — is aware of the government loan forgiveness deadline before it ends on October 31, before difficult hurdles are rebuilt.” said Bona.
Bonta said the program began in 2007 as an alternative for residents turning to private practice rather than a public service career because of high loan payments. That promise of relief never came after the Trump administration rejected 99% of loan cancellation requests in the first round, he said.
Bonta’s office previously sued former US Secretary of Education Betsy DeVos and the Trump administration, Congress took action and his team ultimately “won the battle,” he said.
“But our fight goes on, of course,” he said. “The Biden administration has waived key requirements for state employees to exempt their federal student-loan debt, but here’s the rub — you must act, and you must act now. While I have urged the Department of Education to extend the deadline and urge further fixes to the program, that waiver period is currently limited and the deadline is fast approaching.”
State Senator Monique Limón hopes to shed some light on the growing problem posed by student loans for job-seeking graduates. She authored Senate Resolution 96, pending legislation, to recognize August as Student Loan Debt Awareness Month. Students should be able to pursue jobs that make sense to them, she said.
“It is unacceptable that this debt is disproportionately affecting women and people of color. In an economy where higher education is a requirement for many jobs, we cannot let debt stifle our dreams,” Limón said.
Public sector employers across the country are struggling to hire and retain workers in this job market, and providing student debt relief is one way to keep people in the industry, said Ashley Harrington of the Department of Education’s Office of Public Student Assistance.
“It’s really important to promote this program, talk about the benefits and make sure people know about this program that has a clear path to loan forgiveness. ‘ Harington said.
Bay Area residents owed nearly $26.6 billion in student debt, according to a 2018 analysis by the San Francisco Department of Treasury. San Francisco Treasurer Jose Cisneros said this waiver program provides a significant opportunity to ease a tremendous burden that weighs heavily on many families.
“I urge all eligible employers across our state to take similar action to share this important opportunity with your employees. With the deadline fast approaching, now is the time for your employees to apply and take advantage of this program,” Cisneros said in a statement. “Please make the pledge to join the California Student Debt Challenge and let’s work together to bring that relief to as many of our employees as possible.”
Employers and employees can learn more about the debt relief program at studentaid.gov.