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ISSUE 121 VOL 13 PUBLISHED 3/7/2008

A Word from Our Editors: Public service, debt and loan forgiveness

By Peter Farrell
Executive Editor

Friday, March 7, 2008

Way back in September 2007, Congress passed the College Cost Reduction and Access Act (CCRAA). At the time, the majority of the media coverage focused on the principle provisions of the bill, which included an expansion of Pell Grant funding by $11.4 billion, reduced federal loan interest rates and a reduction in payments to private lenders. However, less-publicized aspects of the CCRAA are also of great interest, particuarly to those planning on graduate/professional school or seeking work in the public sector.

For St. Olaf students -- and there are many of them -- finances play a pivotal role in determining what career opportunities are the most desirable. Indeed, while many Oles express a desire to pursue work in the public sector, the average St. Olaf student graduates with nearly $18,000 worth of debt. Furthermore, many of the most desirable non-profit jobs require students to pursue additonal studies in graduate school, compounding their original undergraduate debt. The prospect of coupling high debt to the low wages of most non-profit employment can thus deter talented students from pursuing the work they find most attractive as they scramble to repay loans and build their lives as adults in the "real world." Despite the obstacles, many ambitious Oles do decide to pursue work in the public sector, and the CCRAA can help ease the heavy financial burdens an increasing number of undergraduates face. Section 401 of the the CCRAA provides for the creation of the Federal Public Service Loan Forgiveness Program. The idea behind the program is simple: debt forgiveness. Providing that a person works full-time for ten or more years as a public servant, the federal government will forgive the balance of the principle and the interest due on federal loans after 120 payments are made on the debt. What careers constitute "public service" from this bills perspective? Surprisingly, the list is long and varied. The Loan Forgiveness Program is applicable to those who pursue work as teachers, social workers, public interest law services, public child care, public library sciences, emergency management, government, law enforcement and many other federal service agencies. Like any federal program, the Loan Forgiveness Program is not without its complication or drawbacks. There are a number of different repayment strategies that may effect how a student in the public sector chooses to utilize the Loan Forgiveness Programs. Still, the potential benefits to high debt workers in the public sector are significant. More information can be found at

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