The Edge: Student-Loan Forgiveness That Could Respond to Borrowers’ and Communities’ Needs Now

An education economist proposes forgiving student debt in bite-sized chunks in return for undertaking public-serving projects. ADVERTISEMENT [Advertisement]( [Advertisement]( [Advertisement]( [logo] Was this newsletter forwarded to you? [Please sign up to receive your own copy.]( You’ll support our journalism and ensure that you continue to receive our emails. [Read this newsletter on the web](. I’m Goldie Blumenstyk, a senior writer at The Chronicle covering innovation in and around academe. As the Covid-19 crisis continues, here’s what I’m thinking about this week. An idea for student-loan forgiveness perfectly suited to the times. Carlo Salerno is an education economist known to many in higher-ed wonk world for arguments that challenge conventional wisdom. He’s fun to argue with. But it’s hard to find any real beef with his latest idea, which he proposes as a complement to the federal [Public Service Loan Forgiveness]( program. Salerno says it’s time for a program that could “trade small amounts of federal student-loan forgiveness for small amounts of public service that provide clear social value.” I’ve been intrigued by this idea ever since Salerno first laid it out in a [10-part Twitter thread]( in June. This week he [outlined it more fully (but still succinctly) in this post on](. I hope the concept gets some traction. It could help fix two big societal problems we face right now because of the pandemic: financially distressed borrowers could use some debt relief, and cash-strapped communities are dealing with pressing public needs. ADVERTISEMENT [Advertisement]( [Advertisement]( [Advertisement]( Subscribe to The Chronicle Our mission, at a time of crisis and uncertainty, is to ensure you have the information you need to make the best decisions for your institution, your career, and your students. Please consider subscribing today to sustain our continuing coverage. [Subscribe Today]( What’s more, this could have some political appeal. The approach presents an alternative to the expansive loan-forgiveness plan that some Democrats are now pushing — a proposal that, as Salerno noted, many critics consider “an unfair windfall for the tens of millions of Americans with a college degree and the means to pay it back.” And it might also be a welcome substitute for the existing public-service loan program, which has been a cause of frustration to thousands of borrowers [rejected for loan forgiveness]( even after working for 10 years in public-service jobs — because of confusion over the rules, missing paperwork, or, as just documented in [this report]( (by the Student Borrower Protection Center and the American Federation of Teachers), poor record keeping by the company that serviced the loans. Salerno, for one, calls that program “probably the worst program ever administered by the Department of Education.” Offering micro loan forgiveness in return for micro acts of public service wouldn’t be easy to execute. In fact, figuring out just how to value the public service could be the devilish detail that ultimately derails the idea before it even gets off the ground. But the calculation isn’t impossible. As Salerno proposes: “State and local governments would create registries of public projects that borrowers could sign up for — think cleaning up a public park or watershed, or working a food bank, or helping at polling stations during elections. In return, the federal government would provide a small, immediate reduction in the participant’s next student-loan payment. Borrowers could participate in as many or as few projects as they would like, without caps or limits, and different projects could pay different amounts.” All parties would just have to agree on what the projects are worth. There’s also the risk of a partisan divide on what projects should be considered public service. Yet in the same way existing federal-loan forgiveness has averted that kind of bickering, this could, too. Easier said than done, for sure. But from a broader political and policy perspective, the plan makes a lot of sense. States and localities are desperate for federal help right now. This could be a piece of it. I’ve also heard a lot of debate over whether the existing public-service program actually incentivizes people to work in public service. Salerno has his doubts, because, as he told me last week, “You have to wait so long” to get the payoff. With his approach, the reward is in sight, he said, so it should be a better incentive. Still, there are some sticking points. For one, under Salerno’s plan, even borrowers who have left college without finishing could be eligible. He sees that as a feature, but to some it might be a bug, especially if you believe federal policy should encourage completion. But in reality, life happens. Students can’t always finish (at least not right away), and borrowers without degrees are most likely to default on their student loans. What if they had an affordable way to pay them off? And students could start working off their loans even while still enrolled. Or, as Salerno suggested to me, they could “never pay a dollar” to attend college. But here’s another issue: Public-service loan forgiveness was enacted to encourage students to work professionally in fields like law, teaching, environmental science, and health, and I could imagine some policy makers balking at the notion of offering debt forgiveness for simple service projects that require little to no related education. That’s probably more of an argument to ensure the forgiveness isn’t given too cheaply, not a knock on the overall concept. But it does make me wonder about a bigger issue. Would it undermine the very meaning of volunteerism? Salerno’s answer: “I don’t know.” Me neither. What I am confident saying is that this is an idea worth considering. And I’m guessing it’s not the only fresh take out there. So a question for readers: What good education-policy ideas do you have right now that would ease challenges brought on by the pandemic? Have you been pondering new approaches, like the[tutoring corps idea I described a few months ago]( Has the Covid-19 crisis prompted you to envision some new solution — to college financing, admissions, or another area — that you’d like to air? Please send me your ideas (my email address is below), and I’ll share the most inventive ones in a future newsletter. Join our virtual forum next Thursday on bringing the remote university together. Before the pandemic, many institutions operated across dispersed schools and even multiple campuses. Now operations are running out of living rooms and makeshift offices across the globe. What have leaders learned about how to manage academics, IT, facilities, and research during this difficult time? That’s the topic for our panel of university leaders on Thursday, November 5. Sign up [here]( to watch live, at 2 p.m. Eastern time, and pose questions to the panel. Or watch later on demand. A parting thought: With Election Day less than a week away, this is the last time I can remind you to vote — and to help your students and colleagues do so, too. Early-voting lines in many places are long, and November 3 could be worse, so don’t wait. Sadly, this is not likely to be my last week urging everyone to #MaskUp to slow the spread of Covid-19. President Trump [claims]( “On November 4 you won’t hear about it anymore,” The facts and data, however, tell us otherwise. Got a tip you’d like to share or a question you’d like me to answer? Let me know at goldie@chronicle.com. If you have been forwarded this newsletter and would like to see past issues, [find them here](. To receive your own copy, free, register [here](. If you want to follow me on Twitter, [@GoldieStandard]( is my handle. Goldie’s Weekly Picks THE PANDEMIC'S TOLL [Death of a President]( By Lindsay Ellis [image] A visionary took charge of a college in a moment of crisis. Then he caught Covid-19. THE 2020 ELECTION [Student Interest in the Election Is High. So Are the Barriers to Voting.]( By Michael Vasquez [image] Colleges use an arsenal of tactics to counter voter-suppression efforts that target students with “surgical precision.” COMMUNITY COLLEGES [In Another Blow to Student Equity, Transfers to 2-Year Colleges Plunge]( By Katherine Mangan [image] Predictions that students would stream into community colleges during the pandemic instead became a flow in the other direction. 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