Student loan forgiveness plans underused

With the total U.S. student loan debt nearing $1 trillion, the Consumer Finance Protection Bureau is rolling out an initiative to educate borrowers about their rights and options when it comes to repayment.

The effort is primarily aimed at the quarter of the U.S. workforce, 33 million people, who work in jobs which are defined as “public service.” The CPFB points out that the legal definition of public service is far broader than people realize: It includes members of the armed forces, teachers, social workers, emergency services personnel and others working for government as well as those working at 501(c)(3) non-profits ranging from health care to the arts.

For example, the Public Service Loan Forgiveness program forgives certain federal student loans after 10 years of on-time monthly payments. There are also programs which allow people to cancel federal Perkins loans.

“People give up higher incomes to serve their city, their state, or their country,” CFPB Director Richard Cordray said in a call with reporters Wednesday. “We believe that people who contribute part of their talents, part of the benefits of their education, to society as a whole should not be mired in debt because they stir themselves to the calling of public service.”