CFPB Toolkit Increases Awareness of Student Loan Forgiveness for Public Sector Jobs

    Workers in the public sector, including teachers, law enforcement officers and soldiers, often sacrifice higher salaries or place their lives in danger in order to improve the well-being of others in their neighborhoods, cities and across the country.

    In an effort to reward them for their contributions to society and encourage others to take full-time public service jobs, the federal government in 2007 created the Public Service Loan Forgiveness Program, which eliminates some portion of their student loan debt.

    Although information on that program has been available for nearly seven years, the Consumer Financial Protection Bureau is now launching the Employer’s Guide to Assisting Employees with Student Loan Repayment toolkit to “empower school districts and other public service organizations to help their employees qualify for existing student loan repayment benefits.”

    “[The toolkit] advises that an early start can save you thousands of dollars.  And it includes information like how to qualify for student loan benefits; how employees can certify their employees for certain programs; and how to make the most of existing payment programs,” CFPB director Richard Cordray said in a press release. The initiative is “designed to permit people to exercise more fully their responsibility in the great common cause of developing this country to be a better place.”

    How CFPB’s Toolkit Works

    The toolkit raises awareness, offers advice, and provides certain paperwork for employers to begin the process of tackling their employees’ student loan debt issues.

    Public service jobs include:

    • Government
    • Public Education
    • Nonprofits
    • Healthcare
    • Military personnel
    • Law Enforcement
    • Volunteering
    • Veterinary Medicine
    • Law (public defenders, legal advocacy)

    Employers in the public sector are asked to share the information, appoint a human resource team member in charge of helping employees, and certify employees so they can track their repayment process in tandem with their workplace.

    It includes a form to enroll employees into the loan forgiveness program, as well as encouraging human resource departments to add this enrollment form to benefit packages, so workers can sign up during open enrollment periods.

    The guide is also designed to get the word out about other available student loan repayment plans. It highlights Income-Based Repayment, which sets monthly payments at a fixed percentage in relation to their income, and offers advice to people with Perkins Loans and private loans as well.

    Student Loan Debt in the U.S. at All-Time High

    The total amount of student loan debt owed in this country is at the highest level yet, nearing $1.2 trillion.

    Americans today owe more money to student loans than to their credit cards and car loans. Only mortgage debt trumps it at the moment. People are so overwhelmed by this debt that an estimated seven million people have their individual student loan debt in default.

    More than a quarter of American workers have public service jobs that benefit society, but many of these public servants have trouble seeing a personal return on their investment.

    Low starting salaries and tepid salary growth in these professions may make it tough to pay back their student loans.

    Cordray’s press release on the CFPB initiative shows the starting salary of social workers is close to $32,000, but nearly three-quarters of all graduates with a master’s degree in social service leave school owing an average of $36,000 in student loan debt. Under a 10-year Standard Repayment Plan, a social worker will be paying about $415 a month toward student loans — barely affording other living expenses.

    Filling public sector jobs may be an uphill battle in the near future due to an aging baby boomer population, lack of upward mobility and the financial difficulties that people in these professions potentially face.

    The National Center for Education Statistics estimates the United States will need close to a half million teachers by the end of the decade. Those aging baby boomers may drive the demand for educated nurses well past the supply by 2020.

    The nation could be short one million nurses by then, experts say. Local government budget cutbacks and staffing reductions may make it difficult to fill jobs for law enforcement officers, firefighters, EMTs and social workers.

    Requirements for Student Loan Forgiveness

    To qualify for student loan forgiveness you must:

    • Use of one of the six repayment plans in the Direct Loan Repayment Plan Program, not be in default and work at a federal, state, local or tribal government agency, or nonprofit 501(c)(3) organization.
    • Make 120 on-time student loan payments during that time, which are within 15 days of the due date. Only payments after Oct. 7, 2007 are eligible.
    • Fill out an application that will be available when the first borrowers will be eligible for forgiveness in October 2017.

    Cordray hopes that raising awareness about student loan forgiveness through the toolkit will help consumers “better understand their options and make sound choices they can live with for the rest of their lives.”


    Julian Hills

    Julian Hills is a content writer for His journalism career has taken him from newspapers to local television news stations and even a 24-hour cable network in the Southeast. Julian is a graduate of Florida State University who enjoys finding new ways of saving money for football season tickets.

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