U.S. Sen. Chuck Schumer says recently graduated teachers, police officers, firefighters, nurses and soldiers around the nation are missing out on huge breaks in their student loan debt.
“The call to service shouldn’t and cannot be drowned out by loan collectors,” Schumer said in a teleconference Wednesday. “It’s a good program. Very few people know about it.”
Schumer said 33 million are eligible nationwide for the Public Service Loan Forgiveness Program. That includes a quarter of New York’s workforce.
Qualified workers in certain public sector fields can cut their monthly student loan payment to 15 percent of their discretionary income, which could save hundreds of dollars a month. After 10 years of payments, qualifying students will have their loans fully forgiven.
Schumer is asking the federal departments of labor and education to get employers and colleges to spread the word about the program created in 2007 as part of the new G.I. Bill.
Schumer gave an example of the savings. He said a graduate qualified for the program owing $75,000 in student loans and earning $35,000 to start would pay $33,850 over 10 years. The program would pay for the remaining $92,150 of the starting student loan debt.
He said the program is encouraging to students who might otherwise avoid public service jobs out of fear that they wouldn’t earn enough to start repaying their student loans.
Only debt from federal Direct Loans qualify. However, Schumer said other loans under federal programs such as the Federal Family Educational Loan can be consolidated into a new Director Loan.