Lately, little attention has been focused on the issue of student loan forgiveness, which was so prominent in the Biden administration. Then-President Joe Biden desperately attempted to cater to his college-educated constituency by seeking to waive, or substantially reduce, their college debt.
Many detractors complained that this was just an attempt to make the non-college-educated police officers, plumbers and truck drivers subsidize doctors, lawyers, and other white collar professionals.
No one, for instance, received loan forgiveness for the money they borrowed to buy a new truck to start up their small business.
Anyway, a few people are scrutinizing the new laws that came into play over the last decade or so that allow college graduates to have their debts significantly mitigated or expunged by taking a job with a not-for-profit or government entity.
This provision has been wildly abused. I know of a local businessperson whose employee of several years quit her job to take a position with one of the 10 towns in Suffolk County. She took that municipal job because the provisions of the student loan forgiveness bill allows for waiving, or at least mitigating, student loans if one takes a position with the government or a nonprofit.
Why should a person who goes to work for a government entity and receives tremendous health benefits and a pension have their student debt expunged? Now, we see how this could make sense if you wanted to incentivize a newly admitted doctor to practice in faraway jurisdictions where there are a few doctors who wish to set up a practice. But to simply wash away debt when someone works for a not-for-profit or a government? What’s the point?
There’s no need to incentivize people to take government or not-for-profit jobs. There are millions and millions of these people with more applications coming in every day. What this actually is, unfortunately, is a payback for those in the public sector who tend to vote Democratic. It’s no surprise that the Trump administration is trying to clamp down on this scam. With a few limited exceptions, we hope they are successful.