College grads can learn and earn their way out of student loans

Scott Anderson knew he wanted to go into veterinary medicine, a profession shared by his father and his uncle.

Affording the degree, however, posed a challenge. “It’s incredibly expensive,” said the former Marine, 36, who is married with two kids.

Determined, as well as confident he was a good candidate, Anderson applied for a highly competitive scholarship through the U.S. Army. It pays $46,000 annually for tuition, books and fees and provides a $2,000 monthly stipend. In exchange, the student commits to work for the Army Veterinary Corps for a stint equal to the length of graduate school.

Anderson won the scholarship and currently attends Washington State University. The offer has been “a huge part of being able to go to vet school,” he said. While the cost of a college or graduate education soars and total student debt in the United States nears $1 trillion, there are a number of programs, new and old, to help students reduce their indebtedness.

Some loan forgiveness programs have been offered for decades for particular professions, through colleges, states and the federal government. Late last year, President Barack Obama accelerated an income-based repayment program that made 1.6 million students eligible to lower their payments. Under the program’s “pay as you earn” option, graduates can pay 10 percent of their discretionary income for 20 years and have the rest of their federal student loan forgiven.

“This program has been a huge blessing to my family, as the payments I made before qualifying for this program were close to $900 per month and now are less than $200 per month,” said Jessica LeDoux, a Rogers High School teacher.

Graduates must have made all their payments on time and have borrowed money in both 2012 and sometime between 2008 and 2012 to qualify, according to the bill, HR 4170. The program pertains to federal loans only, not private loans. “These programs provide a light at the end of the tunnel,” said Lauren Asher, director of the Institute for Student Access and Success. “If you do need to borrow to go to college, you have the assurance that your payments won’t impoverish you and they won’t last forever.”

Study finds flaws in income-based repayment

The New America Foundation, a nonpartisan public-policy institute, studied the income-based repayment program and found it wanting in some respects.

It’s most beneficial to the wealthy, the analysis found, as well as graduates with degrees that have higher earning potential. And it fails to offer colleges and universities an incentive to lower tuition.

“The low-income borrowers will see minimal new benefits,” the analysis states. But like LeDoux, middle- and high-income borrowers and those who attend professional and graduate schools could see their monthly repayment bills greatly reduced.

“This program helps people pay for master’s degrees essentially at a time when people can’t afford undergrad degrees,” said Jason Delisle, director of the New America Foundation’s federal education project.

The foundation asked the Obama administration for a response to its analysis and hasn’t received one.

As Delisle has continued researching the income-based repayment plan, he says more issues have come to light.

A person going to veterinary school who borrows $150,000 will owe no more on student loans than a student who borrowed $90,000, he said.

Additionally, colleges might not hesitate to raise tuition further if they know the government will write off students’ debt.

Counselors, websites provide information

Finding opportunities for loan forgiveness used to take extensive digging, but with a national emphasis on making college more accessible and affordable, there are now many websites that detail the types of jobs for which programs exist.

College counselors also play a significant role in making sure students know about the programs available upon graduation to help them manage their debt.

“New borrowers are required to go through a program to tell them what’s available to them,” said Chio Flores, WSU’s director of the office of financial aid and scholarships. “At the tail end of their college career, they have to go through an exit interview.”

Anderson, the veterinary medicine student, thought ahead, and his scholarship for vet school is one of the more generous ones available to graduate students.

Besides scholarships, the Army Veterinary Corps also offers a loan repayment program.

“It’s one of our recruiting tools,” said Brig. Gen. John Poppe, chief of the corps.

The corps has 25 WSU alumni, said Poppe, who is also a Cougar.

A person who enlists with a three-year commitment can erase up to $40,000 in student loans annually, up to a maximum of $120,000. Reserves can erase another $20,000 each year.

The Army is the only military branch with a veterinary corps, which is 817 members strong – 536 on active duty, 276 in reserves and five in the Army National Guard. The veterinarians take care of service animals and care for active-duty members’ pets.

In 2012, the veterinary corps had about 758,000 clinical office calls. That does not include health checks or deployed dog care, military officials said.

Programs for public-service workers

The U.S. Department of Education has offered various loan forgiveness options for graduates working in public-service jobs.

A program enacted in 2007 for students graduating that year or after offers forgiveness of the remainder of a loan if the student works in public service and has made 120 payments without fail.

Some of those jobs include emergency management, public services for people with disabilities or the elderly, social work in a public family service agency, public health, early-childhood education, public school librarians and employees of nonprofits, according to the U.S. Department of Education.

Rogers High School teacher Rhett Lashbrook learned he qualified for some debt forgiveness when he became a certified teacher in 2004, but nothing as beneficial as the current or 2007 programs.

Because he teaches at a low-income school, he was able to eliminate $5,000 from his loan through the U.S. Department of Education.

“There are other subjects in which higher amounts are offered,” said Lashbrook, who teaches history. “For me, it will basically mean paying off my loan, no more payments.”

He added, “They don’t make it easy though. I had to submit the application five times. One time they said they couldn’t read my principal’s signature. Another time they said they weren’t using that form anymore. The average person I talked to had to submit the application three times.”

Eastern Washington University graduate Melissa Hall found some loan relief through her college. She earned a degree in social work, and after working in the field for five years, the school forgave her remaining $5,000 loan.

“It was helpful, and it would’ve been helpful if they had paid off even more,” she said.

Manda Lyghts, a lawyer at the Spokane County Public Defender’s Office, found some debt relief from a state program. The Gonzaga University graduate had about $150,000 in undergraduate and law school loans.

The John R. Justice Incentive Program, enacted in 2008, offered up to $10,000 per year for three years. Depending on state funding, the program could be extended up to three more years, she said.

“I’m trying to use it as additional principal payment, but it can replace your payments,” Lyghts said. “It’s helpful in that I’m trying to pay my debt down early because it’s so big.”

Working as a public defender is “probably the lowest-salaried position you could take after law school, so loan forgiveness options are really important,” she said. “We have a new lawyer here, and his debt is close to $200,000.”