UCLA’s Dr. Kai Mathews on Using New Funds to Prioritize Educator Diversity in California – Part 3
Kai Mathews:
These are, could potentially be huge draws into our education system. After 10 years of paying on a income adjusted repayment plan, you could, all of your student loans can be forgiven, the rest of your student loans can be forgiven, as long as you’re in a public service position. But, and it sounds amazing, and it sounds beautiful, but it doesn’t work because most of the people who apply at the end of their 10 years, for some reason there’s some type of technical or administrative issue where they don’t get approved for the forgiveness. And it turns out they have still five more years left or seven more years left. And this is speaking really just to the federal government ’cause no one else has control. Like, they need to be able to take action, but have some type of oversight committee.
What we’re seeing and what we know, is that because the administrative issues or the technical issues that applicants are seeing, they’re mostly lack of communication, or miscommunication, between them and their loan provider, right, about the appropriateness of their payments. So, sometimes a payment can be 5 cents off, either above or below, and it doesn’t register as a qualifying payment. And so, you’re key, and if you have your thing on auto pay, right, then you’ve been paying for seven years on auto pay, 5 cents below what you need to for being qualifying payment. And so, there should be number one, an oversight committee that looks at these payments, that analyzes if this person is on a employment adjusted payment repayment plan, they’re most likely trying to establish consistency for their payments so that they can qualify for the loan forgiveness.
And so, not only should it be looking at the individual payments, but it should be advising and looking at the lending practices for these loan forgiveness and service providers, loan service providers, as well, and how they talk, to the communication that they deliver to their consumers about loan forgiveness in the program. They should also have just a general program that’s run by the federal government, that if you are applying to be part of the loan forgiveness program, that your loan is now being serviced by the federal government under this one program, so that we can make sure that all the payments are qualifying payments, that we can make sure that our communication is succinct and consistent across the board.
They can do national marketing campaigns to ensure that everyone is receiving the same message around what career options apply to be part of the program, what payments apply to be part of the program. I know for the teacher loan forgiveness program, it’s capped out at like $17,000. But we do know that it costs more to become a teacher, especially when you’re giving up employment during your student teaching phase and during your residency phase. So, if we can increase the cap from 17.5 to more than that, centralized application process for the loan forgiveness program so there would be less rejections, and then maybe reduce the numbers of qualifying payments. Right now, the qualifying payments in order to get your loans forgiven permanently, is 120. So that’s 20, that’s 10 years of payment, and that’s still a very long time. So, maybe considering lowering the qualifying, the number of qualifying payments in order to reach forgiveness.