Student Loan Debt Reaches All-Time High
COLUMBIA - Student loan debt has officially topped $1 trillion.
According to the government's consumer advocate, more than 33 million workers qualify to have their student loans forgiven because they work in public service fields. However, too few take advantage because the programs are overly complex and confusing.
Public service work includes, the military, teachers, firefighters, police officers, and those who work in hospitals and city halls. Some other positions that qualify for loan forgiveness programs include city hall secretaries, state department of motor vehicles office clerks, and accountants at non-profit arts groups - positions that may not usually be seen as public service.
The data shows the largest group of beneficiaries is more than 6.8 million workers in education.
Kristie Harms, an English teacher at Battle High School and a graduate student, wishes she had known about these options sooner.
"I know a lot of teachers who are 10 plus years teaching and they're still paying off student loans, they're not even close," Harms said. "You know they're talking about having to pay mortgages and car payments and have kids...It's kind of scary for me knowing that that's going to be how long it takes."
According to the National Center for Education Statistics, the nation's schools will need 425,000 new teachers by the end of the decade. However, sometimes it takes more than just passion to accept a lower starting salary. Eligibility for a student loan forgiveness program may be a good enough incentive.
"I think the average starting salary in Missouri is about $36,000 for a teacher," MU Financial Director Nick Prewett said. "So depending on how much they've taken out in student loans their payments could be a smaller percentage of that and so they could see some forgiveness on the back end."
All payments after October 1, 2007 are acceptable. To qualify for the student loan forgiveness program, one must make 120 on-time, full and monthly payments on Direct Loans. You must pay under a qualifying repayment plan and must be working full time at an eligible public service organization.
Prewett says since this is a relatively new program, there is no confirmed data yet to show just how beneficial it will actually be.
"At the end of a 10 year period if they don't miss a single payment then the rest of their student loan is going to be forgiven," Prewett said. "That doesn't take effect until October of 2017 so we're not really sure yet how many students are going to achieve that benchmark or what the average forgiveness for those students is."
For more information about the Public Service Loan Forgiveness Program visit: http://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness.pdf