This fall marked the first round of applications for the Public Student Loan Forgiveness Program.  PSLF, which was instituted in October of 2007, enables federal student loan holders to discharge their student loans after making 120 qualifying payments provided they spend 10 consecutive years working in public service.  Out of the 29,000 applications processed so far—only 96 applications have been approved for loan forgiveness.  That’s right—according to Market Watch–99 percent of applications have been rejected.

Even student loan forgiveness programs for public school teachers that predate PSLF by many years and have a higher track record of success are fraught with problems.  Students banking on receiving student loan forgiveness for education degrees, would do well to consider that only twenty five percent of TEACH Grant recipients receive forgiveness. (Seventy-five percent will see their grant convert into a loan).  This is due to recipients not meeting the very stringent requirements, and the fact that many new teachers leave the profession in fewer than five years.

The key to timely student loan repayment is two-fold and does not include windfall loan forgiveness.  Reasonable choice of college and reasonable choice of major.  Students relying on student loans for college should consider attending a less expensive institution, even if they believe a campus is pretty or always wanted to live out of state.  Nor should they borrow money for a degree for which there is little demand in the marketplace.  Intelligent, inquisitive young people, should not expect special dispensation from the reality that most people have jobs, not fulfilling careers.  And most people cannot pay for degrees that send them into the world to make a very small salary. It should also be remembered that knowledge is accessible and free at any public library.

Because PSLF is not contractual, the program may be amended or abolished at any time.  It is my opinion that the Department of Education should follow through with current enrollees.  But as borrowers are figuring out, the real issue is assuming eye popping amounts of student loan debt in the first place.  I realize this is about as helpful as saying: “don’t touch the hot stove”, after immolating one’s hand.  Sometimes the best solution to a problem is avoiding the problem in the first place.