Government Asks Public for Views on Charity Student-Loan Forgiveness Rules

August 05, 2008

Government Asks Public for Views on Charity Student-Loan Forgiveness Rules

The U.S. Education Department is seeking comments by August 15 on proposed regulations to carry out a new law that would forgive the student-loan balances of some charity workers.

The College Cost Reduction and Access Act, H.R. 2669, allows people to erase their loan balances after making 120 payments if they been a full-time “public service employee” during that time. The benefit would apply only to payments made after October 1, 2007.

The Education Department is proposing language to define which organizations qualify as “public service” employers.

It suggests the term apply to government agencies, tribal colleges, nonprofit groups that qualify as charities under 501c3 of the Internal Revenue Code, and private groups that don’t qualify for that tax designation but that provide specific public services such as child care, help for older people and people with disabilities, legal services, education, and public safety.

The draft regulations also define “full time” to mean working an annual average of 30 hours per week, an average of 30 hours per week during a contractual period of at least eight months (designed to cover teachers), or the number of hours that the employer considers full time.

The department proposes that people who hold full-time AmeriCorps jobs qualify for the benefit, and that any money that they use from their AmeriCorps education awards to pay off student loans count when calculating the 120-payment minimum.

— Suzanne Perry

Comments

What about the volunteers who spend their time, helping the non-profit and alumni organizations? It would be a great dis-service if their contributions of time away from their families is not counted somehow.

— K. Rizwan Kadir Aug 5, 10:33 PM #
Would university employees who are responsible for fundraising be included in this group?

— Ashley Cacioppo Aug 6, 09:37 AM #
This unfortunately only applies to federal loans – Many students had to supplement with personal loans to complete their expensive educations, and they should not be discouraged from continuing to devote their careers to the non-profit sector because they cannot afford to survive on the lower income with high loan payments every month. What about loan forgiveness for these individuals?

— Rebecca Nelson Aug 6, 10:03 AM #
This initiative would provide an additional incentive for choosing public service as a career. This proposal would help level the playing field when not for profits are trying to recruit and retain talented professional staff.

— Troy Metheney Aug 8, 10:46 AM #
absolutely. we need incentives to attract and keep people in critical social services

— judy chiasson Aug 9, 06:44 PM #
Yes, we need to attract more people to the social services industry.

— ukatie1 Aug 10, 03:51 PM #
This would mean that I had to make loan payments monthly for 10 years and stay in the nonprofit sector for those 10 years. Most of us will have the loans paid off by that time or have left the sector for better salaries to make those monthly payments.

I would rather we gain exempt status from social security tax. I could really use that extra 6% in my paycheck…

— A.Y. Aug 11, 10:09 AM #
This is a great idea, yet it is unrealistic that someone will necessarily stay in public service for 10 years or still have a balance after 10 years. I would suggest 5-8 years or exempt status from social security tax since I will never get to see any of that money. Thanks!

— J.Ross Aug 11, 04:24 PM #
I think it is a good idea. Many universities currently forgive loans if people complete a term of service with programs like Americorps and it should be uniform across all universities and colleges. This is an opportunity to encourage and reward people to do service. It should be an important part of our social responsiblity. As an Americorps volunteer, it would be a financial relief to have my loans go away after completing service.

— Anna S. Aug 12, 01:43 PM #
I believe that all full-time national service terms (VISTA and AmeriCorps)should qualify for the benefit. People would be encouraged to choose national service as a option. Also, as a person who would like to continue in public service having my two national service terms count would alleviate the large financial stress of outstanding educational loans.

— Cherlyn W Aug 12, 03:33 PM #
I think its a wonderful idea. I owe more on the student loans than my home. I did have to postpone in hard times but now am making a payment almost the same size as the mortgage payment. I have been in public service for more than 20 years. I disagree with writer # 8 you can have a balance after 10 years and can work for social service for a life time. Some of us can’t say no.

— Deborah O'Brien Aug 17, 11:08 PM #

Commenting is closed for this article.

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