tv Washington Journal Jillian Berman Discusses Student Loan Forgiveness... CSPAN April 24, 2017 6:41pm-7:17pm EDT
the house returns tomorrow from its easter passover holiday, but the senate gaveled an earlier today, and just a short while ago, the chamber confirmed president trump's choice to head the agricultural department, 87-11. they also voted to advance a deputy attorney general nomination. on of the senate live c-span2. here is a look at a primetime schedule on the c-span networks starting at 8:00 p.m. eastern here on c-span, former president barack obama discusses civil engagement and community organizing, his first public appearance since leaving office three months ago. on c-span2 at 830 p.m., attorney general jeff sessions speaks about workplace integrity and ethical standards.
8:00 eastern on c-span three, and march for signs rally with remarks from scientists and civic organizers marking the 47th anniversary of earth day. it is time for our your money segment on washington journal. good morning. let's start with public service at loan forgiveness. >> it is a program signed into allowsgeorge bush that those who work for government, public service, teacher, things like that to have their loans forgiven after 10 years if they make payments for the entire 10
years. if they make the payments come all the debt gets forgiven? is tax free,nd it which is different from other loan forgiveness programs, which there is a tax consequence. topic ofause the public service is a wide one, who qualifies? if you work at the government at any level, state, local, federal coming you qualify. if you work for a 501 c3 nonprofit commute definitely qualify. what is murky is if you are a public servant working for a nonprofit. it is still being determined with you fit in. host: why is that? guest: some of those other , some do political
activities like lobbying, some than whatrent goals one might think of as a traditional public servant, but there are people who work for those organizations that are doing white we might think is public service work, so there is --est for discretion as to if you are a lawyer working for an organization that does some lobbying, but your specific role ,s a public defender almost there is some discretion as to whether or not you qualify. that itn't it possible would be exactly spelled out what qualifies as public service? would be ideal. we have not had any forgiveness through the program yet. it started in 2007, signed into law in 2007, so nobody has gone through the full 10 years of it,
so we have not seen what happens when you have the button on forgiveness, and so ideally it would he spelled out, and what is spelled out in the statute is that government workers, 501(c)(3) government workers qualify, but as we get closer to the forgiveness point and people are trying to get their paperwork in order, that is where we are seeing confusion, an that is being worked out as we speak. talk i guess is with us to about public service and loan forgiveness and questions whether that will happen or not. ,f you want to ask a question call the following numbers. for independents, (202) 748-8002 . is it in the obama administration? guest: this predates the trump administration. the aba, the american bar association, a membership organization for lawyers, filed
a lawsuit alleging that some lawyers who have loans approved for forgiveness were later reneged upon. the government said your loans qualify, you will have them forgiven and 10 years if you keep going on this path and turned around and said, just kidding, that's not the case. of the lawsuith itself in the government's response came during the trump administration the aba had been discussing this with the obama administration toward the end of their tenure. they had been going back and forth for a long time on it. in this case the trump administration was continuing what had been going on under obama. host: could you give us a sense of the price tag if these loans were to be forgiven will would be the approximate cost of the taxpayer? guest: it's hard to say. definitely in the billions. according to the government accountability office there are
about 4 million student loan borrowers -- estimated 4 million student loan borrowers who would qualify for this program. if you think about that, 4 million borrowers, the average student loan debt is about $35,000. a lot of people who use this program tend to be graduate students so that is higher. is higher. debt you can get a sense of the amount that could be forgiven. host: one of the stories includes a chart. a borrowers -- of borrowers registered for the ps f l only 0.01% have been in the prram loaded to give forgiveness next year. guest: next year is the first time -- the end of this year is the first time we're going to see anybody eligible for forgiveness. anybodyy unlikely that will have -- will be able to claim at. that untilis
recently not a lot of people knew about it. some people might have heard about it from their employer, maybe from the union but unless you were told about it by someone a lot of borrowers did not know the program existed even though they are working in the proper field. they may not have the right type of loan. the subprogram for borrowers with federal student loans but you have to have a certain federal student loan. what's known as a direct loan. the s fel under .rogram, you can consolidate those are a couple of the issues that borrowers might be facing. host: as far as the education department, what is it doing to assure, at least clarify, where people stand in this program? guest: nothing right now. some senators a few weeks ago wrote a letter to secretary
put outking her to clearer guidance to streamline the application process. you're onat you know track for forgiveness as you submit a form called an player certification form. some information from you, from your employer but that is a paper process. the senators were asking her to digitize and which in 2017 seems like it might be time. far.hem silent so a few weeks ago the new york times did a column, the premise of which was all of these people are worried about the status of their loan forgiveness and the department of education is not returned our cal on this topic. host: first call is from bonnie. you're on with our guest. go ahead with your question or comment. caller: good morning. i was doing laundry so i missed the very first part.
my daughter is a 911 operator in oregon. she is 40. she has had a student loan for her masters three for years now. i'm wondering about the details of how would she get this form and who would she submit it to. guest: you can get the form online. if you type in employment certification form and google that is a way to do it. if you go to student aid.gov that is a way to do it. you print out the form. she fills it out and you also have to take it to your employer. there's a portion they fill out and you send it -- you can submit it on student aid.gov or send it to your student loan servicer, which is the company that -- the company where she is paying her bills to. they handle it.
host: the something like a 911 operator qualified generally for this type of relief? guest: that's a good question. i'm not super familiar with the mechanics of 911 operators. if it is through a police department, yes, that would. host: hamilton, ohio. this is alfred on our independent line. caller: i would like to know does the debt forgiveness you are talking about applied to military personnel, especially those disabled with high interest loans such as mortgages and such. what areas does that cover on the debt forgiveness? guest: if you are talking about if you have a disability is actually another route you can -- it is called a total and permanent disability discharge. that is another form you can find on student aid.gov. you submit that form.
if you qualify you have loans forgiven right away and you don't have to go through this 10 year process of paying them back. host: there are some critics of this program. preston cuckoo wrote a column in this for forbes. he said in part, this is over welfare for the rich. people with graduate degrees are not the one to need help paying back the loans. why taxpayers should stay billions of dollars while leaving distressed borrowers on in the cold is a mystery to me. is that a fair criticism? guest: that is a criticism that has been leveled by conservative scholars. even the obama administration proposed cap on the program and $57,500. basically that would mean that is the mexico have forgiven. the reason for that cap, thinking is the program is
utilized mostly by graduate students and undergraduates students use federal student loans. graduate students are able to borrow up to the cost of the program. borrowing forited graduate students and on the back and we allow unlimited forgiveness if they do work in a public service sector. that is something a lot of people say does not match. host: i asked about the two devos-- does -- but the -- betsy devise -- guest: on the campaign trail president trump i believe it was in ohio talked about allowing our worst to pay back their for at loans by paying -- about 12 years and having the remainder forgen. it has been no movement on that.
that was something he brought up on the campaign trail. host: let's hear from caroline in louisville, kentucky. democrats line. caller: i wanted to know what was available for social workers . i am a graduate student. -- from bush up until trump -- yes at times i have worked for the government, i have worked for agencies, domestic violence advocate for the police department. will i qualify for student forgiveness? guest: if your work has been for the government and for 501(c)(3)'s you probably will. you don't have to have the same employer over the full 10 years that would you do have to do is
coupled together proof of employment from those different plane -- those different places. it does not have to be 10 consecutive years of work but ultimately you do have to make 10 years worth of student loan payments. before you receive forgiveness you have to make 120 payments. they be that ends up stretching over longer than 10 years if you have a cash flow problem and you had to take a break. it leads to the 120 payments before you can receive forgiveness. host: does someone have to be entered into this program in a specific way in order to get this relief? realize they're in another type of loanan they transfer their loved this program and p for 10 ars and get relief assuming it's going to be there? you have you find out the type of federal law on the does not qualify for forgiveness
you can do this thing called consolidation. it's a little tricky. in the private loan world we usually think of consolidation as something else but in the federal student loan world it basically means transferring all of your loans into one loan. in this case you would do that in order to switch into the direct loan program. once you do that, that's when the clock starts. you can pay for 10 years and have loans forgiven. host: from california, next up is gerardo from lancaster, democrats line. caller: yes, jillian, i have a question. i went to icp technical institute. i got my associate and bachelor's. during that time there was not steady work. i went from temp agency to temp agency. no benefits. now i'm stranded with a bunch of student loans and a don't know how to pay them. -- is there a way for
me to apply for the student forgiveness? guest: there's actually a different set of options for people who went to a school like , which h been accused by some state law enforcement officials of misleading borrowers. what you do is you can apply for this thing known as borrower defense. that is a program available to people who use student loans to attend college and were misled by the college. .t can be difficult to qualify it's worth submitting that. you can find it on the -- online. that is how you figure out if you're going to qualify. host: (202) 748-8001 for
republicans. (202) 748-8000 for democrats. .202) 748-8002 independents you talked about the cbo to about the cost of this program. is there a case to be made that this should only cover people with bachelor's or not extend to the more expensive programs? guest: that is a case some people are making. on the of the limit amount of that student borrowers can take out for a bachelors degree it's less likely that they may need it. thatighest the limit is 57,500 number. only able to take out less than that in federal student loans. bebe bachelor degrees or may less likely to need this. people graduate degrees, there is a cost to taxpayers.
there are some people who are ,oing their public defenders trained to do that your to go to law school which is very expensive. you don't end up making a lot of money. there is something to be said about keeping the program available to people with graduate degrees. , beacon, new york. the maquettes line. caller: you already answered my question. my dter worked for a nonprofit for 14 years. she looked for a year. she would still -- she left for a year. she would still qualify? guest: you do have to collect all of that paperwork. she probably would still be able to get the forgiveness. springrom ezra in silver , maryland. caller: can you elaborate on the relationship between the income-based repayment programs and making 120 qualifying payments.
isticularly if someone program equals zero so they don't -- their payments under the income-based program is zero, does that count for the 120 payments? guest: most people who use public service loan forgiveness -- basically everyone compares it with an income-based repayment program. these are programs offered by the federal government that allow people to pay off their loans as a percentage of their income. the reason why that is is because if you use a standard repayment program listed it loan term is 10 years. you would have paid off the entire lonmin 10 years and you would not need forgiveness. if you're using public service loan forgiveness you're often using one of these plans and some of these plans, depending on your income, can make it so that you have a payment of as low as zero dollars. if you qualify for zero dollars
payment as long as you are doing what it takes to stay current on your loans, you are making the payment on time, it still counts. host: there is an op ed in u.s. news by betsy marriott. she writes this about the program you're talking about saying, it bears repeating that the public service loan forgiveness program -- apartment fully negotiated rulemaking session. based on our experience with student loans we've never seen the rules for student loans change retroactively unit the rules change or the plan is discontinued with a confident that this would not affect borrowers aren't pursuing public service loan forgiveness. is there an argument to that or do you see concerns? guest: it dends on how you talk to but many people are saying that basically you grandfathered in the program if you are already working toward it. she is correct in that it is very hard to change it.
you have to go through congress. .ou can't just pull it back we would know well in advance on his going away that it was on its way to go annoy. the thing about being -- it was going away. the thing about being grandfathered in you have to -- if you work in public service and you are paying off your loans and you think i'm on track toward forgiveness, if you have not submitted one of these forms if they do take the program away there's not anything to prove you were relying on it or part of it. if you think that you qualify and you have not submitted one of these forms i was a just you do it. it will help you know if you are on track and if you qualify and it will create a paper trail that you are part of the program. host: as a question off of twitter that asked if student loan forgiveness ruins your borrowing credit. guest: it does not. under one of these programs
ng to yourot a di credit. host: let me take the flipside of this on personal level. people plan their lives being in this program with the idea of paying it off. what is the situation for them and give some examples. guest: i spoke into a lot of people who have -- who are relying on the program. one is an adjunct professor. she has tried to cobble together the paperwork to prove her hours. adjunct professors work strange hours. it's been hard for her to prove she works full-time. she's relying on the program going back and forth with the i've also -- spoken to some of the lawyers that are part of the aba lawsuit i mentioned earlier.
they are representing immigrant children in immigration court, representing veterans. they were told by the servicer is a qualified for the program and that the department of education renege on that so now they are kind of coping with that deciding whether they're going to switch jobs or what they're going to do. i've spoken to people who thought they had made five years with the payments when they had only made three qualifying payments either because they were in the wrong program, they had the wrong type of loan, things like that. they are reevaluating their financial plan. one borrower, she had plans to buy a car, to travel, all of that is going to be to late because she realized she was not paying into the program is longer she thought. host: here is another critical for twitter. no educational loans should be forgiven for death or incapacity. he got the education, pay the price. and then adds, how about my car
loan. guest: in the broader discussion there is a question of whether taking us to get a better educatn is an individual investment in your person or sort of as a society this is something we support and require. that is something that a lot of people say. you took on the loan, you would have to pay it back. you should not get a free ride. host: this is scott. democrats line. caller: as a public schools teacher who has been working 10 years as a accommodation of public and private loans, with a qualified and does it matter if they missed any payments as long as they eventually hit 120 payments? guest: the private loans do not qualify for this. this is only for government loans. if you have private loans you have to keep paying off.
if you have federal student loans you should check to make sure they are direct loans. if they are a different type of federal loan you have to go through that consolidation process. but if you only have federal direct loans and you do make the 120 payments even if you miss them you will be able to get forgiveness once you hit 120. host: jillian berman reports on the student loan industry and is talking about this program. the possibility of debt forgiveness. (202) 748-8001 for republicans. (202) 8-8000 for democrats. (202) 748-8002 for independe nts. where are we as far as those loans being repaid? what is the default rate? give us a snapshot. guest: even though the economy has gotten better student loan borrowers are still struggling. a recent report found that last
year over one million borrowers defaulted on student loans, on the federal student loans. that is a big number. defaulting on a federal student loan as major consequences. it's a credit ruining event. the government has extraordinary powers to get the money back included garnishing wages, your tax refund, your social security check. even though the labor market has improved and the radically people should be getting -- theoretically people should be getting better jobs a lot of people are struggling. things have gotten a little better. perhaps not as good as people might expect given the improving economy. a lot of that critics say has to do with the challenges associated with paying the student loans. a complicated system to navigate. critics say too complicated which is why so many people are troubled paying them back. lawrence,tear from webster, new york.
caller: i would like to talk about a free loan system where you get a higher education, you don't know how to handle your money but used to get a free education because we forget your loan. billion to140 taxpayers. thank you. that is sort of the criticism we have heard about this program. you get this higher education, it's an investment in you. you know the consequences and yet we're still giving you this debt forgiveness. host: let's hear from lou, colonial heights, virginia. caller: i have a question. why people shouldn't have paid their debt? when we make a debt with someone we have to pay it. i don't see the reason that the
government should forget the debt. duty to fulfillment became about to want. because we want to be doctors or lawyers and we don't have the stamina -- especially if we are poor, we don't have the knowledge that we can become in mathematicians of or doctors or so on. we need to take one step at a -- are lower than others. the government should charge whatever is due but not high price to pay each month.
just as small as what their pay that ispercentage type low enough that they can carry on and maybe take them for years. a may be turning into retirement pay for them later on in life. guest: that point is one that has been made of nylon -- made by a lot of critics of forgiveness programs. there are those programs that exist that allow you to pay off your debt as a percentage of your income. there is an insurance policy there for borrowers to take a lot of dt who don't make a lot of money. why should be also parent with iss forgiveness program that more likely to be taken advantage of by savvy borrowers, graduate students, things like that. host: can anybody on any economic strata qualify for this program? guest: yes. that is a criticism of it. the thing about it though, say
.or example the are a doctor you want to medical school, you graduate, you're working in a nonprofit hospital as a resident . at the beginning of your career you're going to be making lower payments. as you get closer to the end of that tenure. your payments will get larger. even though you may be making a higher income by the end of the 10 years you will be making large student loan payments that will put a dent in the amount of money that's forgiven for you. even though any income can qualify as long as they're working in public service if you have a high income you will still be making high student loan payments. host: this is nathan in mississippi. you are on with our guest, jillian berman of marketwatch. caller: i actually have probably three questions in one. i went to a private christian
college from 2006 to 2010 to become a minister. first question is, was ministers removed from the public service list in 2008? why? what are my options as a minister? .uest: that's a good question unfortunately right now people working for religious organizations do not qualify for it. i want to say and around 2012 there is a push by a lot of ministers, clergy, to try to include them in the program. that sort of way and a little ned of it. for now can rely on income-based programs if you want to pay it off as a percentage of your income. even if you don't qualify for public service loan forgiveness they do offer forgiveness after at least 20 years of repayment. there is a light at the end of
the tunnel with those but unfortunately clergy typically do not qualify. host: were ministers always off the list overly removed? but myi'm not 100% sure impression is they were not ever on the list. host: judy is in south bend, indiana, democrats line. thanks for waiting. aller: my question is whether -- if a person -- does that ? both of theirus income counted guest:. repayment on which program you choose under the income-based repayment umbrella. there are a variety of them. some of them do have marriage penalty. they will count your entire income. .ome of them don't
you'll to double check that. as long as the members of a couple filed her taxes separately. if you're looking into one of these programs and you are married to something consider. information about how your marital status affects the ability to have loans forgiven host:. give us a sense of the timeline of people waiting to see what the status is. what can we expect to see over the next weeks and months? guest: i'm expecting confusion. as we near to the first opportunity for people to claim forgiveness it is going to be this fall. as we get closer to that i think we're going to be seeing a lot of people, including lawmakers, asking for clarification. they have beennk making the 10 years of payments and they are trying to claim
forgiveness i think we may see a lot of confusion. people who did not apply for the program, they did not file an acf form, they think the qualify . as a out they were in the wrong repayment program. their job may be to not qualify. i think when the first set of forgiveness comes we might see a lot of disappointed hours. host: jillian berman reports on issues -- financial issues facing young people. ma announcer: the house returns tomorrow from its easter passover holiday, but the senate gaveled in earlier today. a short while ago, the chamber confirmed president trump's choice to head the agricultural department, sonny purdue, 87-11.
they also advance a deputy attorney general nomination. follow the senate live on c-span two. here is a look at our primetime schedule on the c-span networks starting at a car p.m. eastern former president barack obama discusses civil engagement and community organizing. it is his first public appearance is leaving office. p.m.,pan2 at 8:30 attorney general jeff's sessions on workplace integrity and standards. on c-span3 at 8:00, and march for signs rally, marking the 47th anniversary of workday. today's state department briefing. he took several questions on north korea's nuclear program and secretary tillerson's upcoming visit to united nations at the end of the week. he also spoke about the taliban