The massive student loan debts that burden many college graduates could spell opportunity for public sector employers.
During a visit to Duluth Thursday afternoon, Rep. Erin Murphy, DFL-St. Paul, called on more employers to inform people of a federal Public Service Loan Forgiveness Program.
Even though the program was launched in 2007, Murphy said many people are unaware that individuals who enroll in it and work in public service for 10 consecutive years, while simultaneously keeping current on their student loan payments, can have any remaining debt erased at the end of that period.
St. Louis County Commissioner Patrick Boyle said the county sent out a mass email to its 1,600-plus employees Thursday morning, informing them of the loan-forgiveness program. He characterized the immediate response as enthusiastic.
"Some people who work for the county knew about it, and some didn't," he said.
Boyle suggested St. Louis County could tout the program to help recruit and retain new talent.
"This will be such a great tool for the public sector to have and use," he predicted, especially as baby boomers reach retirement age and step away from county jobs.
Duluth Mayor Emily Larson thanked Murphy for bringing the program to her attention and said the city aimed to promote it, too.
"I'm really proud as mayor that we are embracing this program, too. Already as a city we are talking about this with our employees, and our commitment is to let future employees know that this is a benefit that's available to them."
Josh Abraham, a 27-year-old recreation specialist for the city of Duluth, said he emerged from seven years of study at the University of Minnesota Duluth and the University of Wisconsin-LaCrosse, with bachelor's degrees in outdoor recreation and business management plus a master's degree in recreation management - and $48,000 in student debt.
He has since paid that down to $44,000 with the help of double payments but said the debt still looms as a large factor in his daily decisions.
"It really affects my ability to save money and to look forward to future events such as getting married or one day buying a house. It's one of those things that I'm constantly looking at every day," he said.
Abraham just learned of the loan forgiveness program this week and said it could be a powerful incentive to take a job in the public sector. Abraham noted that if he repaid his current loan over the next 25 years, making the minimum payments required, it would cost him about $83,000.
Larson pledged that her administration would do a better job of promoting the program to its 850 employees in the future.
"The program is here, and it doesn't affect the city's budget. These loan-forgiveness dollars don't come out of the property taxes that the citizens of Duluth are paying to the city. What we can do though is lift it up and put it in our application packets and talk about it during recruitment," she said.
Boyle said: "Every generation has its own hurdles, and for millennials and generations moving forward, I think student loans will be one of those hurdles that they'll have to get over."
Murphy has twin daughters who recently graduated from the University of Minnesota and said her family likely will be working to pay off the debt for years to come.
"This isn't just an issue for recent graduates, this is an issue for families just like mine," she said.
Murphy pledged she will work with other lawmakers "to introduce a package of bills that focus on limiting the cost of college, refinancing debt and forgiving loans."
She said the state must do more to restrain the runaway costs of higher education.
"In the past 35 years, the cost of college has gone up almost twice as fast as the cost of health care, if you can believe that," she said.
Murphy pointed out that the cost of student loans now eclipses many other forms of debt.
"Currently, Americans owe more than $1.3 trillion in student loan debt. That's more than we owe on credit cards and more than we owe on car loans," she said.
Murphy observed that the burden being placed on Minnesota families appears particularly heavy.
"Minnesotans graduate from our four-year schools with an average of $31,000 of debt," she said, noting that that's the fifth-highest average debt load in the nation.
To learn more
For more information on the Public Service Loan Forgiveness Program, visit studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service.