Andrew Taylor’s Apr. 9 post on the Artful Manager is a strange salutation to spin. He notes that as part of the health care reform legislation passed by Congress, the Public Service Loan Forgiveness program provides
…financial incentive and reward to those who choose and remain in a career in public service. “Public service” is broadly defined in the legislation to include any federal, state, or local government organization or agency and most charitable non-profit organizations (primarily 501c3, but not exclusively). You become eligible for principal and interest forgiveness after 120 on-time monthly payments while working for a qualified organization (the payments don’t have to be sequential).
Problem is, in my view, Taylor doesn’t think through the ramifications of reaching the threshold of eligibility for the program — specifically, how grim life is likely to be for those who venture into the arts and then want to partake in it. He does offer a summary of the challenge at hand, just no analysis:
…at least 10 years of on-time payments, along with evidence that you worked for a qualified organization at the time (hence the record-keeping recommendation). Plus, the clock starts retroactively on October 1, 2007, so at least a few years of past payments could qualify. There are also specific rules about what types of loans qualify, so you should be sure your ducks are in a row now to be sure you’ll be eligible.
First question: Is this the proper way to instill fiscal discipline in our college graduates? We can all answer that for ourselves.
Second question: Will this program consign graduates to a decade’s worth of poverty, courtesy of the broken nonprofit business model? Seems to me that we may be redefining “public service” in ways no one could seriously intend.
Let’s say, for example, I graduate from New York University, class of 2010, and get an entry-level job with Roundabout Theatre Company. I stay there for 10 years and make 120 payments on my student loans — now I’m eligible to have the rest of my student loans forgiven, right? Right — but is working for Roundabout or any nonprofit theater company, or opera company, or symphony orchestra, or art gallery, or dance company, truly public service?
Third question: What is the likelihood that any person would stay in the nonprofit world for 10 years? True, some do, but many don’t — they can’t afford to.
Fourth question: How is this charming scenario all that different from indentured servitude? What likelihood is there, moreover, that said graduate, working for an arts nonprofit in this case, will make enough of a salary to cough up 120 payments on his or her student loans in the first place? And come up with rent, retirement money, savings, and, you know, enjoy being in one’s 20s? Really?
Taylor points folks to the handy-dandy PDF FAQ on this program, by the way, and this nugget is precisely what I’m getting at:
May I hold several different qualifying jobs while making the required 120 payments for PSLF and still be eligible for forgiveness?
Yes. As long as you can provide documentation verifying that you were employed full-time by a public service organization (or by a combination of public service organizations) at the time you made each of the 120 required payments, and also at the time you applied for and received the PSLF benefit.
I admire the idea, the good intentions here, but people in the arts should in no way be getting all juiced up about this program. It will perpetuate the cycle of trapping folks in horrifically low-paying nonprofit jobs. Good Lord, where is the fire-breathing Scott Walters now that we need him? What we should be worrying about is how young people will pay for college in the first place. Let’s talk about that.
I supported the health care reform bill completely. Just not this.