The CFPB launched an initiative last week to enable school districts and other public service groups to help employees qualify for existing student loan repayment benefits.
“Teachers. Soldiers. Firefighters. Policeman. Public sector careers invariably involve some effort, some inconvenience, or some sacrifice,” CFPB Director Richard Cordray said. “People give up higher incomes to serve their city, their state, or their country. 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.”
The average starting salary for a teacher is approximately $36,000, the median salary of first responders is approximately $29,000 and social workers begin with starting salaries of approximately $32,000.
Data from the National Center for Education Statistics, however, estimates that 72 percent of students who graduate from a master’s program in social work carry an average $36,000 in student loan debt, which would result in approximate monthly payments of $415 under a standard repayment plan.
“Special programs exist to help our public servants pay back the college loans they needed to qualify for their jobs serving children, the disadvantaged and the general public,” Cordray said. “There are loan programs specifically designed to help teachers, librarians, firefighters, military personnel, law enforcement, first responders and social workers providing services to high-risk children. But not everyone knows about these options.”
The CFPB released a repayment report that estimates that approximately one in four working Americans meets the definition of a public service employee. The agency also released a toolkit for employers and employees to optimize repayment options.
“This toolkit offers practical advice to public servants,” Cordray said. “It advises that an early start can save you thousands of dollars. And it includes information like how to qualify for student loan benefits; how employers can certify their employees for certain programs; and how to make the most of existing payment programs. One tip we are suggesting to all employers is to have student loan forgiveness programs be part of the benefits package when employees start work, during open enrollment season for job benefits, and when sending out IRS W-2 forms.”
Additionally, the bureau urged employers to pledge to speak with employees about student loan debt and help them to enroll in student loan repayment programs.
“Our initiative today is designed to permit people to exercise more fully their responsibility in the great common cause of developing this country to be a better place,” Cordray said. “Our toolkit and the pledge can be a win-win for employers, the public they serve, and their employees, who are facing student debt loads that impose unprecedented burdens upon this generation.”