Federal Program Lowers Student Loan Debt

AFSCME Local 66 member Joshua Abraham says a federal program that helps forgive the loans of public workers will lower his student loan costs from about $66,000 with interest to roughly $10,000.
AFSCME Local 66 member Joshua Abraham says a federal program that helps forgive the loans of public workers will lower his student loan costs from about $66,000 with interest to roughly $10,000.

As government agencies work to recruit young workers, they might want to tout a benefit that already exists – student loan forgiveness.

Many young people today are burdened by student loans: Minnesotans who graduate from a four-year college carry an average of $31,579 in student debt, the fifth-highest load in the U.S., according to the Project on Student Debt.

But there’s a federal program available to public workers and those in qualified non-profits that can ease the load. The Public Service Loan Forgiveness Program lets workers make low monthly payments on certain federal loans, and after 10 years of public service, it forgives the remaining balance.

“College debt is going to just keep going higher and higher with the rising cost of tuition, and a lot of people don’t know that’s an option,” says Joshua Abraham, an AFSCME Local 66 member who works for the Duluth Parks and Recreation Division. He helped push for a new state law that promotes the federal program.

Before he learned about it, Abraham had $48,000 in student loans from earning bachelor’s and master’s degrees. He was paying $200 twice a month to try to get ahead on his payments. That didn’t leave much left over to save for his wedding next year, let alone take a vacation. He ate a lot of sandwiches.

The program has alleviated much of that financial strain, he says. It lowered his monthly payment to about $85, and overall, he’ll pay a total of about $10,000 for his loans, compared to at least $66,000 with interest.

Abraham went into public service to make a difference. He wants to provide services that create healthier communities and help people enjoy green space. Now he can afford to save for his future, too, rather than be hobbled by loan payments.

“It allows me to not have to be so extremely frugal with my money or push repairs off because I can’t afford it for that month,” Abraham says. “I’m able to save for a house, have an emergency fund and put money away for my retirement. It allows for a little more wiggle room.”

For more information, head over to the Federal Student Aid website.