How State and City Government Entities Can Help Employees Access Public Service Loan Forgiveness

Student loan debt has reached a record high of $1.745 trillion¹ and the amount of student loan debt that is held by state and local government employees is rising. In fact, the amount of student loan debt that is held by state and local government employees was expected to grow to $60 billion by 2022.

Fortunately, the federal government is currently offering to cancel all student debt for people who work in public service jobs. People employed by a state or local government are eligible for this loan forgiveness.

Why Public Service Loan Forgiveness Matters

The federal government created a program called Public Service Loan Forgiveness (PSLF) that was designed to encourage individuals to pursue careers in public service.

The program offers borrowers the opportunity to have their federal student loans forgiven after 10 years of employment in public service – this includes federal, state, local, tribal government, or non-profit organizations.

This is a fantastic incentive for government employees as the average debt among these borrowers was $66,667¹ and government employees are more likely to be approved for PSLF than other non-profit employees.

However, according to the Student Borrower Protection Center (SBPC), over 9 million public service workers with federal student loans are eligible to pursue debt cancellation through the federal PSLF program and only 15% have submitted the proper paperwork to start the process.²

Among those applicants, only about half worked for the U.S. government.³

Why State and City Government Entities Should Care

It's important to be aware of the impact of this loan debt on your employees and how it affects their work. Financial concerns are the single biggest cause of stress for Americans⁴ and carrying the stress of these things into work can cause a reduction in productivity and job performance⁵. 

How to Help Government Employees Take Advantage of Public Service Loan Forgiveness

Assuming you have read this far, understand that you are critical to helping your employees and colleagues benefit from this vital, life-changing program. Here are some key steps you can take today:

• Ask your organization’s HR department to send an email to employees reminding them about the opportunity to apply for PSLF.
• Post information about the PSLF in your HR materials, bulletin board, or intranet, indicating a point of contact for certifying years of employment.
• Provide educational resources and tools to help employees understand the PSLF program, what it takes to qualify, how to determine if it’s the right choice, and other aspects of student loan repayment.

Communication and Education Are Key Components 

Employees can't take advantage of benefits they don't know anything about. It's important to communicate well and offer the information in a format that is easily accessible.

Now, you might be saying, “I’m not in the business of student loan advice or counseling."

That's what a holistic, personalized financial wellness program is for. 

Enrich will work with your team to design a contribution plan that's tailored to your unique needs. We’ll take care of the onboarding process and we'll work with you to make sure they get the education they need.

In addition to courses on student loan repayment and qualifying for Public Service Loan Forgiveness, employees will also have access to an entire holistic financial wellness platform – complete with topics covering budgeting, credit, debt, saving, retirement, and more.

Learn more about the award-winning Enrich Employee Financial Wellness Solution

1 - https://educationdata.org/student-loan-debt-statistics

2 - https://protectborrowers.org/new-analysis-more-than-9-million-public-service-workers-with-federal-student-loans-eligible-for-debt-cancellation-fewer-than-2-percent-have-received-relief-and-only-15-percent-on-track/

3 - https://educationdata.org/student-loan-forgiveness-statistics

4 - https://www.apa.org/news/press/releases/stress/2014/stress-report.pdf

5 - https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=1594&context=csd_research