Why You Shouldn’t Hesitate to Get into the PSLF Plan

In the US, student loan debt is an intensely hot topic of debate, and understandably so. Over the past decade, student debt across the nation has amounted to more than $1.5 trillion (an amount only matched by the country’s mortgage debt); and according to a poll by New York Life, students take an average of 18.5 years to pay off their accumulated debt.

In light of this, it is unsurprising that a great many politicians have put forth the idea of forgiving national student loan debt. Of course, this was traditionally seen as a Democrat standpoint (with Bernie Sanders and Elizabeth Warren being among some of its most prominent proponents), but with Wayne Johnson, a Republican and former Trump administration member, recently throwing his support behind the notion as well, and encouraging his fellow Republicans to do the same, the idea of forgiving student debt has taken a significant step across the political spectrum—a reflection, perhaps, of what a serious issue it has become.

It is easy to see why a growing number of individuals are throwing their support behind the idea of forgiving student loan debts. After all, said debts affect no less than 44 million individuals across America. More than a few of them would appreciate the opportunity to head out into the world—which is already financially challenging enough as it is—without a mountain of debt to weight them down. Moreover, as researchers from Moody’s Investors Service have noted, the overall effect of loan debt forgiveness on the economy could be positive. After all, widespread debt forgiveness would leave both current and future students with a great deal more disposable income, a good portion of which, in turn, will be invested in the local economy.

Of course, as Moody’s researchers noted, such widespread debt forgiveness comes with risks as well. For instance, many students—especially those in higher-income households, which generally spend debt relief savings at a lower rate— will choose to continue saving their excess money rather than spending it directly, thus diluting the effect on the economy somewhat. Moreover, there is the whole matter that debt forgiveness; however, it is implemented and funded, which will likely increase the US’s already burgeoning national debt.

Regardless of how one feels about the matter of student loan debt forgiveness, however, the fact remains that this period of uncertainty, during which politicians and bureaucrats mull over the issue, leaves ordinary students in a somewhat awkward position.

If you’re a student, you likely know what we’re talking about. How,  exactly, should you approach the matter of dealing with the subject of your current or future debt? Paying it off, or saving to do so, could mean that, should some form of forgiveness be implemented, you could find yourself having spent money needlessly or forgone potential investments for the sake of paying off debt that was forgiven nonetheless. At the same time, however, failing to save to pay off one’s debt in the hope that general forgiveness will be implemented could be a disaster all its own, if said forgiveness is not implemented.

Failing to save to pay off one’s debt is chiefly an issue when it comes to the whole matter of the Public Service Loan Forgiveness program that the government already offers. Many students wonder what will happen to this program should the decision to forgive all debt be implemented. Will the program be shut down entirely? And even if it is not, what of all the time and work invested in it by the students who have already applied to it? Will that all be wasted? As a result, a great many students these days find themselves reluctant to apply for the PSLF.

But simply put, our advice to you is this: continue to work on saving money to pay off your debts, and on applying for the PSLF. Why? Well,  regardless of how one feels about the notion of forgiving all student loan debt across the country, the fact remains that, despite all the promises and proposals, it is unlikely that it will happen—at least, not anytime soon.

Why? Well, there are a significant number of factors; but prominent among them is the likely fact that the US cannot afford it. At the moment, the US’s once indisputable position as a global superpower is increasingly challenged; and at the same time, the global economy is fluctuating at increasing rates. In short, despite the proposals of individual politicians, it is unlikely that the US government as a whole will be willing to merely overlook more than $1.5 trillion in debt, all for some vague and uncertain economic boosts.

In other words, it is absolutely in your best interest to continue saving up for future student loan debts (and, if at all possible, to begin doing so before you have even left college). Such widespread student loan forgiveness is unlikely to happen in our lifetimes, and as such, it is simply not worth the risk to skimp on one’s savings. And even in the unlikely event that such widespread forgiveness is implemented, well, then you will enter into the working world with a sizable amount of savings. With the number of financial challenges that the world tends to throw at new employees in this day and age, we almost certainly don’t need to tell you why this would be advantageous.

And as to the PSLF program, that, too, is unlikely to see something as drastic as a total shutdown, or even a radical overhaul, in our lifetimes. Moreover, regardless of what future policies may or may not bring about, the PSLF is set up in such a way as to ensure that, once you are accepted into it, you are grandfathered through to the end. Continuing to save up for future student loan debts, in brief, is a far judicious approach than merely putting it off in the hope of some vaguely promised policy changes.

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