Social service, as the name itself suggests, means serving the society with the objective of improving their welfare. While such a service demands huge amount of passion and dedication, one might not expect much high returns from such services, financially. They work pretty well for a human’s inner conscience and intellect but is generally is rewarding otherwise. Higher education is definitely not a pre-requisite for rendering social services but such qualifications would definitely provide an added advantage to the society as well as the individual.

Education is a tool that helps polish one’s capabilities and knowledge. Apparently, a qualified social worker would be better placed to benefit the society as a whole. But it is not that easy to earn a college degree in the US due to high cost of books, tuition fee and living expenditures. That’s when student loans come to our rescue.

A student loan is specifically designed for students to pay for their education expenses and carry substantially lower interest rates and suitable repayment schedules to help students pay them back when they are capable of. Student loans are different from scholarships and grants and are supposed to be paid off. With time, policy makes have realized that it would benefit the economy as a whole to facilitate the borrowers in full or partial repayment of their student loans.

This sometimes takes the form of loan forgiveness for choosing a desired career path or discharge of loan in case of bankruptcy, medical complication or forgery et cetera. Student loan forgiveness programmes typically require the student to pursue a particular occupation or volunteering service in exchange of paying off the loan completely or in part. 

Student Loan Forgiveness Program

Repaying a student loan is generally not as easy a task as is taking one. It becomes even harder to pay off a student loan when an individual chooses to join public sector services or some other low paying job like teaching or nursing to follow one’s passion and field of interest. It is to help such borrowers that there exists a concept of Student loan forgiveness programs. A student loan forgiveness programme is designed to help students pay full or a part of their student loan.

This sounds great but off course requires something in return. Student loan forgiveness programmes typically require the student to pursue a particular occupation or volunteering service in exchange of paying off the loan completely or in part. In the US, student loan forgiveness programs are also aimed at directing individuals towards sectors of national importance where there is lack of qualified personnel. The US Department of Education offers forgiveness on federal student loans and once forgiven, the student is not liable to pay his remaining loan balance.

There are two types of student loan forgiveness programmes; upfront forgiveness that eliminates a part of student debt with each passing year of service and back-end forgiveness that cancels whole of the student loan after a certain number of years of service. Back-end forgiveness programs come with all-or-nothing condition and therefore, might be risky for individuals who are not sure whether they would be able to complete their committed tenure of service or not. Student loan forgiveness programs are also available on private student debt but the provision of the same highly depends on the private lender. 

Student loan forgiveness for social workers

The National Association of Social Workers  promotes student debt forgiveness for people in the social sector for a twin objective of improving the work conditions, opportunities and financial stability of the social work professionals as well as make available social services by qualified personnel to the masses. Such social service can be in the field of child welfare, schools and education et cetera. The College Cost Reduction Act 2007 has enabled elimination of any remaining student debt for social work professionals after 10 years of payment made towards the debt.

The program allows for forgiveness for one’s student loans after 120 qualifying payments towards debt for people serving the public sector in any of the eligible employments. Payment made after October 1, 2007 are considered qualifying. Also, National Health Service Corps Loan Repayment Program provides $50,000 to licensed and trained clinical social work professionals to help them repay their student loans in exchange of service in a service site in Health Professional Shortage Area approved by the National Health Service Corps.

The New York State Higher Education Services Corporation  also offers social service loan forgiveness program with the aim of increasing the number of certified social work professionals in the fields of physical and mental health, substance abuse, child welfare and care et cetera.  

Eligibility criterion

Only loans availed under the William D. Ford Federal Direct Loan, Federal Direct Stafford Loans and Federal Direct PLUS Loans are eligible for Social service loan forgiveness programme. In case of Federal Family Education Loan (FFFL) and the Perkins Loan Program, the loan needs to be consolidated into a Direct Consolidation loan in order to be eligible for the social service loan forgiveness programme.

There are three modes of repayment plans under the Public service loan forgiveness programme, namely, Income Based Repayment Plan (IBRP), Income-Contingent Repayment Plan (ICRP)  and 10-year standard repayment plan. Having made 120 qualifying payments towards debt in a time span of 10 years, the borrowers can have rest of his student debt eliminated after which he is not longer liable to make anymore payment towards it.

Benefits of Social Work Student Loan Forgiveness Program

Social Service Loan Forgiveness Program is highly beneficial to people with high student debt and relatively smaller incomes due to their decision of joining the social sector. While borrowers with other loan forgiveness programs are required to make loan repayment for 20 years, borrowers engaged in serving the social sector have an advantage with just 10 years of repayment towards student debt. Such programs also help borrowers to save some part of their income during repayment due to capping on the monthly payments. It also helps in strengthening the economy as a whole by getting qualified professionals to serve the social sector, especially in areas of high need and low availability and make the working environment competitive and efficient. 

Limitations of Social Work Student Loan Forgiveness Program

Due to severe restrictions imposed on the eligibility requirements for this forgiveness program, many people are left out from its ambit. One caution that experts always warn borrowers about is that even in the presence of such forgiveness programs, one should think of minimizing his/ her loan requirements because such programs require a long term commitment and not everyone is clear enough of what’s life going to be like for the next ten years.

People who are caught in an illusion of the benefits of these loan forgiveness programs might end up taking excessive loans and worsening their financial situation. One popular criticism associated with such student loan forgiveness plans in the high cost of subsidies that the federal government has to bear every year.

Conclusion

Clearly, social service loan forgiveness programs offer a range of benefits for people who wish to pursue a career in social sector but with several restrictions imposed on the working of such programs, individuals must carefully analyse the repayment schedule and enter into a plan after prudent research. With every new amendment, the white house aims to reach out to more people by extending the forgiveness plan.

These programs not only benefit the borrowers, but also huge masses of people by encouraging the flow of capable professionals into the service sector. Even in the mid of all the slack that these programmes attract due to heavy subsidies, it is widely believed that with an average of $23,000 student debt and shortage of qualified personnel in the social sector, these programs benefit one and all. They have their own set of pitfalls but the benefits seem to overpower the limitations.