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A bill that is expected to be signed by President Bush will
make it easier for students with high student loans to accept
lower paying and non profit jobs.
Bill H.R. 2669, that passed through the House and Senate Friday,
will provide legislation that would give student loan forgiveness
of $5,000 for graduates and forgive outstanding debt for borrowers
who have made 10 years of monthly repayments on their loans
while serving in full-time government or nonprofit service.
The bill is sponsored by California Democrat Representative
George Miller.
The jobs that will qualify are full time positions in emergency
management, government, military service, public safety, law
enforcement, public health, public education, social work
in a public child or family service agency, public interest
law, public service for individuals with disabilities or the
elderly, public library sciences, school-based library sciences
and other school-based services.
"The premise of the public service loan forgiveness program
is a good one from an economic perspective," said Dr.
Margarita Rose, Professor of Economics. "The prospect
of reducing or eliminating educational debt provides a strong
incentive for graduates to enter public service."
The loans that will be eligible are federal direct Stafford
loans, federal direct grad plus loans, and federal direct
consolidation loans. Private education loans and parent plus
loans are not eligible.
A bill that was passed in 1993 offers students an option to
tailor loan repayments to their incomes. Then after 25 years
of repayment the government will forgive the remaining debt.
Those who are in support of the new legislation make the argument
that the old program has not succeeded because 25 years is
too long of a period.
"There is some economic cost in forgiving student loans;
but if competent workers do not take these positions, society
will have to pay the price in other ways," said Dr. Rose.
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