You may have heard that medical students are taking advantage of a government program that forgives student loans after 10 years if graduates go to work in government or nonprofit jobs (like government-run hospitals).
What may surprise you is that the Public Service Loan Forgiveness (PSLF) program is a double-whammy for taxpayers across the entire economy, of which one-quarter is covered by PSLF.
George Leef, director of research for the Pope Center for Higher Education Policy, writes that the program is handing recipients about $12 billion in taxpayer money in the next decade while simultaneously making college more expensive:
[I]t distorts the market for higher education, encouraging universities to offer more programs that lead to government employment and at higher cost, since they know students are not price sensitive when it comes to getting such credentials. They know their accumulated debt will be wiped out.
Leef cites recent research by American Enterprise Institute scholar Jason Delisle that students entering the public sector – which already offers “security, benefits, and (mostly) good pay” – are basically getting “unlimited free borrowing” for grad school:
[A] student who pursues a Master of Education or a Master of Social Work, who accumulated a loan balance of $28,000 during his studies, is likely to have all of the money he borrows for his graduated education forgiven.
More than 431,000 people are already participating in PSLF, according to Delisle.
There’s another massive federal program that threatens to “heap more of the cost of our wasteful and ineffective higher education system on American taxpayers,” Leef says.
To learn all the unsavory details, read the article.