If Hollywood remakes the 1967 classic, The Graduate, the advice to Benjamin might be “federal government” instead of “plastics.” As a way to attract young talent to public service, a new law cancels the remaining interest and principal payments for U.S. government employees with 10 years’ service and 10 years of payments on federally-backed student loans. The benefit isn’t limited to government workers, however, It extends to a lengthy list of other “public service” jobs, including law enforcement, public defender, nursing and child care.
Steve Henn touched on this for Marketplace Money last week. The Wall Street Journal has a story about it today.
Now, my guess is that private employers won’t be far behind. “Student loan forgiveness is the next big thing,” says Mick Endersbe, a financial consultant and head of College Planning University LLC, a company that works with financial planning professionals. I can’t see GE, IBM, Intel and other companies standing idle while the government snaps up the best and brightest. And it’s quite an enticing perk given that the median student debt level for holders of a college four-year degree is $19,300, according to the College Board. And nearly a quarter of graduates of private nonprofit colleges and 14% of public universities carry a debt burden of at least $30,000.