Home » Aviation » Navy Recruiting Could be Hurt if Popular School Loan Forgiveness Program is Canceled

Navy Recruiting Could be Hurt if Popular School Loan Forgiveness Program is Canceled

Capt. Anthony Roach, executive officer of the amphibious transport dock ship USS John P. Murtha (LPD-26), addresses a group of Naval Reserve Officers Training Corps (NROTC) midshipmen. US Navy Photo

A federal program encouraging public service by paying-off federal school loan balances is poised to be canceled, potentially leaving thousands of active-duty officers with mountains of debt they expected to be forgiven.

Called the Public Service Loan Forgiveness program, former President George W. Bush rolled out the plan in 2007 to encourage people earning expensive college degrees to work for the federal government. After working continuously for ten years in public service jobs, such as active-duty military service, and making regular monthly federal loan payments, borrowers could apply to the U.S. Department of Education to have any remaining federal school loan balances forgiven.

October marked the first-month program participants could apply to have their federal loans forgiven. But just the U.S. Department of Education is processing the first wave of loan forgiveness applicants, the fiscal year 2018 budget puts the entire program on the chopping block.

If canceled, at stake is the implied promise made to thousands of officers who accepted commissions expecting after a decade of active duty service, the unpaid balances of their federal school debt would be erased. Yet doing so could save the federal government $12 billion over the next ten years.

Currently, close to 6,800 active duty military personnel are enrolled in the program – about 22 percent of all military officers commissioned since 2007 who paid for their degrees with federal loans, personal loans, private funds, or scholarships, according to statistics from both the Department of Education and Department of Defense.

In the Navy and Marine Corps, close to 2,500 individuals are counting on having the balances of their school loans paid off after a decade of active duty service, according to the Department of Education. They could be saddled with tens of thousands of dollars in school debt they hadn’t counted on having back at commissioning.

Since 2007, DoD reports 30,091 officers – 23 percent of the 135,550 officers commissioned during the decade – earned degrees without attending a federally-funded military academy, officer candidate school, or through a DoD-funded ROTC program. DoD does not track how people in these situations paid for their school, or when degrees were earned.

Nationally, about 431,853 borrowers – including government and qualified non-profit organization employees – are enrolled in PSLF program, according to the Department of Education.

Recruiting and Retaining

Lt. Julia Cummings of Averill Park, N.Y., a Nuclear Accessions officer assigned to Navy Recruiting Command, speaks with students about career opportunities in the Navy during the 2017 Society of Women Engineers (SWE) Conference held at the Austin Convention Center. US Navy Photo

From the Navy’s perspective, what’s great about the PSLF program is the Department of Education administers it and ultimately is responsible for paying off loan balances.

The program is an important tool used to attract and retain talent, especially officers with highly sought-after skills, said Lt. Cmdr. Rabb Muhammad, a former recruiter. The Navy has a great need for recent graduates with law degrees, medical degrees, and especially advanced engineering degrees.

While a recruiter, Muhammad was particularly focused on recruiting individuals with advanced engineering degrees to be instructors at the Navy’s Nuclear Power School outside Charleston, S.C. Often, these graduates have hundreds of thousands of dollars in student debt.

“As a recruiter, our main focus was getting people with advanced degrees,” said Lt. Cmdr. Rabb Muhammad. “It’s hard to convince those folks to give up everything they’ve been working for to take a low paying military job.”

Once someone is sold on joining the Navy, Muhammad said recruiters often close the deal with the prospect of having the balance of federal school loans paid off after just ten years of making payments.

“They have student loans, but don’t know how to pay them off,” Muhammad said.

Secretary of the Navy Richard V. Spencer, through a spokesperson, declined to comment on the program’s benefits to recruiting and retaining personnel, or what canceling the program would mean to efforts recruiting and retaining sailors with highly sought-after skills.

Why Cancel the Program?

Ens. Thomas Grapentine, communications officer aboard the amphibious transport dock ship USS John P. Murtha (LPD-26), explains proper wear of firefighting gear to a group of Naval Reserve Officers Training Corps (NROTC) midshipmen. US Navy Photo

According to the President’s Fiscal Year 2018 budget, released by the Office of Management and Budget, the program which hasn’t actually forgiven any student debt yet, is considered too expensive. The budget states, “to generate savings that help put the Nation on a more sustainable fiscal path, the Budget eliminates the Public Service Loan Forgiveness program.”

The Department of Education would not comment on where the desire to end this program originated. But a recent Brookings Institute report offers some clues as to why the President’s budget proposed ending the program just as it was to start paying off school loans.

Analysis by the Congressional Budget Office states people borrowing for graduate or professional schools are likely the biggest beneficiaries of the PSLF program, because, “they tend to borrow larger amounts than people who borrow for undergraduate studies do.”

The Brookings Institute report, citing Department of Education statistics, states, “The median debt load of those enrolled in PSLF exceeds $60,000, and nearly 30 percent of PSLF enrollees borrowed over $100,000.”

As an example of how fast participation in the program is growing, and how much the expected payouts are, a year ago the CBO evaluated a pair of changes considered by the Obama administration. First, loan forgiveness borrowing would be capped to loans of $57, 500 for new enrollees. Any additional borrowing for school would be shifted to income-driven repayment plans. Doing so, the CBO predicted, would save between $5 billion and $12 billion during the next decade. Extending the repayment periods of these loans could also result in billions of dollars in savings over the next decade.

Instead, the new budget focuses loan repayment assistance solely on income-driven repayment plans, which allow borrowers to set monthly loan payments based on a variety of factors including income and family size.

This is the suggestion made by the Brookings Institute, which states, “reforms that limit the most excessive features of PSLF are warranted, although repealing PSLF altogether and letting the federal Income-Based Repayment program (IBR) accomplish the goal of PSLF is an even better course of action.”

The Trump proposed budget would cap these loan payments at 12.5 percent of discretionary income. After 15 years, the federal government would forgive the unpaid balance remaining on undergraduate degrees. For graduate degrees, the federal government would forgive any unpaid balances after 30 years.

A final determination on the future of the PSLF program has yet to be made, according to a Department of Education spokesperson. Options include canceling the program outright, ending new enrollments, or shifting current participants to another program.

  • muzzleloader

    So now our armed forces is a debt forgiveness bureau? Unbelievable.

    • I. B. Halliwell

      You think serving in the military is not something of value to you, me, and the country!? Yes, it is debt forgiveness but not giving away something for nothing! 10 years of service minimum! Many of them – most likely – will stay till retirement (assuming the country keeps its promise).

      Oh, let me guess you feel pensions and retirement pay is a give away program both private and public, right?!

      • sferrin

        “You think serving in the military is not something of value to you, me, and the country!?”

        Last I checked, people serving in the military got PAID.

        • I. B. Halliwell

          Paid, sure, but no where near what they’d earn in the private sector.

          Public employees never get paid what their / job is really worth. They do it out of a sense of service to the public or simply patriotism. This is why we, the public, owe them to keep our word on this issue!

        • Harry T. Bagger

          What do you care? You fly the flag of traitors. Why do you hate the USA?

      • muzzleloader

        Don’t put words in my mouth, numb nuts. Of course I believe in pensions, I am about 7 years away from
        mine. Something you have to keep in mind, is depending on your career field, your tech school is quite costly. Someone going into advanced electronics, or Navy nuclear school is recieving 2 years of very intensive training that is worth a pile of money, all the while recieving medical, dental, room and board.
        The service is a great way for a young person to have a career. If a person wants Uncle Sam to pay for thier education, then more folks should look into ROTC.
        If I am going to be called old school, then I am guilty, lol.

        • Duane

          Funny about guys like you … you love to resort immediately to namecalling, using infantile junior high school epithets, instead of talking like a sensible adult. It’s endemic with right wingers like you … you don’t know how to talk like a decent person.

        • pismopal

          You go Bro!

    • William Blankinship

      Now, keep in mind they are asking for 10 years.

    • John Locke

      The program was rolled out under Bush in 2007.

  • b2

    Yep, “money for nothing and your chicks for free”
    Old School vet

  • NEC338x

    Well, this blow should ensure that many of those who joined up for this reason alone do not stay in to retirement. That will save them the double whammy of finding out that Congress can do what they want with retiree benefits as well.

    • Fred Gould

      Trust me, that is on the menu.

  • DaSaint

    The services require more and more highly educated individuals with advanced degrees. Getting rid of this program, in a time when retention is challenging as it is, is crazy. But then again, if we can renege on international agreements, then why should we be surprised that we would renege on promises made to those in uniform. Wouldn’t it be better to modify the system for incoming participants, and grandfathering those already in the system? At least the promises would be kept.

  • I. B. Halliwell

    This would seem to be a contract violation plain and simple. Class action suit?

    Also what happens when all of these officers leave at the end of their current enlistment and go to the private sector to have the money to pay off the loans?

    The men and women of our armed services are suppose to mean something to President Trump per his words, but this action is louder than his words by far!

    The country – we – made a deal with them and they met their half of it and now we should meet our half!

  • William Blankinship

    If this is what it takes to get service members with advanced degrees and skills then this program needs to continue. I got out of the Navy 50 years ago because I could make 10 times as more as a civilian with my skill.

  • sferrin

    They should just stop going forward, and honor their existing obligations. They could fund it by raiding Obamacare.

    • John Locke

      … or not pay Trump to stay at his own golf resorts.

      • draeger24

        he doesn’t take a salary, lib.

        • John Locke

          Of course not. When you own a business you don’t take a salary, you claim a profit, ‘tard.

          • draeger24

            ah no…obviously, you don’t know how business works…ever hear of “non-profits”, lib?

          • John Locke

            Sure, but the Trump owned resorts where Trump has stayed during his Presidency are profitable, ‘tard.

          • pismopal

            Profit just makes you break out in hives doesn’t it comrade? How many employees to you support?

        • Harry T. Bagger

          He’s already spent $70 million at his own private vacation spots. In 10 months.

          • draeger24

            first, do you have access to the budget? NOPE….second, he paid for his campaign and he works for zero salary, lib, and to his own resorts…which is a far cry from the Obama’s who are still charging the government for their travel, Secret Service, and separate “vacations”. Paaalllheese

    • Harry T. Bagger

      You aren’t very bright.

      • draeger24

        when you have no facts, the typical lib response is to go ad-hominem…well done, lib…don’t you have an ANTIFA rally to attend?

        • Harry T. Bagger

          I stand by my statement. You really are dumb.

          • draeger24

            of course you do….you have nothing else relevant to say….

  • Frank Mcgee

    This program did not just apply to military. With this program you could get a 150,000 degree in lesbian dance theory then have the gov give it to you for free. They should grandfather those that have started this program and keep it for military service, otherwise kill it. Because the program could be combined with income based payments which allow you to pay less per month than the interest, most of these loans are actually bigger than when the person started paying them off. I had 3 choices 9 years ago on my 50,000 loan. 1. Eat beans and rice and aggressively pay it off in 3 years paying about 60,000 total with interest. 2. Drop payments to about 200 per month use the loan forgiveness program which I would pay about half of the original value of the loan (but the loan with interest would be over the starting amount). 3. Make regular monthly recommended payments which would take about 18 years and cost about double the original value of the loan. Option 2 sounded really tempting but i decided that 1. they may cancel the program and 2. I might be forced out of federal service for some unknown reason. so I chose Option 1 payed in full! I am really glad I did that!

  • Jason M. Pilalas

    I completely agree that gentlemen keep their word and the program should continue for those who CONTRACTED with the government. I have no problem with assessing and reviewing it for the future. A likely problem is its wide spread – I imagine that like many programs it has spread far beyond its original intent and gotten much larger and more expensive.

  • NavySubNuke

    It would be interesting to see the average per person cost for officers recruited under this program vs. officers from the academy or ROTC.
    Especially the cost of a Doctor – recruited after paying for their own med school – vs. the cost of the Navy sending someone to medical school on their own. I am willing to bet it is cheaper to forgive a 10 year old student loan balance for a surgeon than it is to pay someone’s way to becoming a surgeon.
    Hopefully we are also regularly examining this program and ensuring that the loans we forgive are only for those areas where existing unemployment is low enough that it IS hard to recruit people of these types. Given how many unemployed lawyers there were during the height of the financial crisis I’d hate to think we are paying off law school balances for those folks since they should just be grateful the military gave them gainful employment.
    I’d also hate to think we are wasting money paying off the remaining balance of a history or creative writing degree when again those people should just be thankful they have gainful employment.
    Aerospace engineers, mechanical engineers, computer scientists, and other skill sets that are in high demand – along with medical doctors – are who this program should be benefiting. Especially since it includes Navy civilians as well as active duty I believe.

  • Harry T. Bagger

    If you voted for Trump…. well, you should have known better.

    • hollygreen9

      What was the alternative? Hillary? Forget that!! I voted for trump as he was a LOT better candidate! Your name says it all “BAGGER”!

  • pismopal

    Does this not come under the description of an ex post facto law?

  • I blame the colleges and universities inability to contain cost escalation which was brought about by easy access to the Federal Student Loan program. Here’s a solution: confiscate all college and university endowments (public and private) for civil rights violation, tax evasion or what ever excuse you’d like to make up. You can even pass ex post facto tax law (Clinton did it). Then apply the proceeds to “forgive” all Federal Student Loans and end the program. This would be done as an establishment of an application of social justice, since Hillary (now admitted by the DNC) stole the election from Bernie, and Bernie was going to make college free. Whatever assets remain should be pooled and placed in income producing US investments, administered by the DOE. The dividends from these investments will determine what the schools can spend on their day-to-day operations thereafter since they will no longer be allowed to charge for tuition. Any largess colleges and universities receive consequently goes into the pool; thereby relieving them of the burden of managing the endowment. The government might even tap (borrow) from any surplus in the fund (to keep Social Security solvent), an inter-generational win-win. This would be “amicably fair” and in keeping with the popular economic philosophy that is all the rage at most of our institutions of higher learning. And I’m sure that it would receive wholehearted support form the student body and much of the faculty; especially from the snowflake faction. Socialized higher education – an idea whose time has come!

  • ScottishGent

    What’s the famous line – “Trust me, I’m with the government!”