Baylor weighs in on future of debt, loan forgiveness

Photo credit: Liesje Powers

By Megan Rule | Staff Writer

The fate of student debt just got a little darker due to recent actions by the United States Department of Education.

With a program started in 2007 called Public Service Loan Forgiveness, student loan borrowers were told their student loan balance would be forgiven after 10 years of on-time payments and qualifying work in the public sector, according to a National Public Radio (NPR) report. Eligible work includes nonprofit, federal, local, state or tribal government.

Because it is a 10-year program, this coming fall would be the first group of student debts to be forgiven. However, last year a small group of student loan borrowers enrolled in the program learned their eligibility had been revoked, even after closely following all the necessary steps, according to NPR. The group fought in a lawsuit, saying their status should not have been revoked, but the Department of Education responded saying that even for all the years certification forms were submitted, there were not any promises about debt forgiveness.

“This is sad that it was revoked because you could have potentially ruined someone’s career because they spent 10 years striving for something that was never going to come true,” Chesapeake, Va., junior Blake Robertson said. “For some people, it could have been a giant waste of time and effort.”

NPR reported the Department of Education is only responding to the question of whether or not the organizations that had their eligibility revoked are considered public service. Paperwork should continue to be filed and payments should be continued, but there is a possibility that Congress may eliminate the program, according to NPR.

“Thats very misleading and disrespectful,” Los Angeles, Calif., senior Rachel Toliver said. “It’s a lesson learned as it should prepare us for the future- to not just take something on the surface but read the fine print.”

Amine Qourzal, associate director of counseling for the Baylor Student Financial Aid Office, said the office is committed to helping students manage loan debt. This is done primarily through scholarship opportunities, one-on-one financial counseling and several online tools on the website to help students maximize financial aid resources, Qourzal said. The financial aid office at Baylor aims to educate current and new students on loan borrowing in order to invest in their education in the best way possible, Qourzal said.

“The Baylor Financial Aid Office is always looking for ways to educate students and help them recognize their responsibilities as borrowers,” Qourzal said. “We want to educate them to make best possible decisions.”

Brian Remson, a certified financial planner with Ferguson-Davis Wealth Management Group in Waco, emphasized the importance of paying attention to various aspects of student loans and how to pay them off. Remson said two things come to mind when giving advice to students. First is to always be careful of consolidation, and second is to not postpone retirement savings just for student debt.

“When young professionals come out, I say don’t get petrified by the amount, just start paying it down, but be careful,” Remson said. “Don’t consolidate, and don’t forget about the other financial things you have to do as an adult in addition to paying down debt.”

Remson said some companies allow people to consolidate student loans, which simplifies payments but also results in a loss of benefits. According to Federal Student Aid, a direct consolidation loan allows you to combine multiple federal education loans into one loan, resulting in a single monthly payment instead of multiple payments. However, consolidation results in more payments and paying more in interest, according to Federal Student Aid. Remson said to make sure you know the finer details.

“It’s hard to do things in school to get the financial gears going before you’re in the real world,” Remson said. “Once you’re there, you’re better prepared for decisions to make if you take a numbers course and pay attention.”

Remson also said that as a financial adviser, he has many young people come out of school overwhelmed by loan amounts and focus on just paying that off rather than paying some off and saving some for retirement. Remson said depending on the situation, some companies have match policies so they will match a certain amount contributed to the retirement plan, or sometimes it’s best to pay the regular payment and contribute a little to a 401K. A lot of people are scared of saving because they don’t know how, but it is simpler than they think, Remson said.

“Another big piece of advice is as soon as you graduate, be careful of right-after-graduation spending,” Remson said. “You think you can afford big fancy things, but my rule is, if you couldn’t share it on social media, would you still actually do it or buy it?”