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A Public Service Solution for College Debt Relief

The president’s forgiveness of student loans aroused plenty of controversy. State and local governments can help craft a more sustainable federal plan that could help to relieve their own workforce shortages and staffing costs.

Two firefighters lighting a backfire around a vehicle during the Bear fire in Butte County, Calif., in September 2020.
Firefighters light a backfire around a vehicle during the Bear fire in Butte County, Calif., in September 2020. Forest firefighters are among workers who could be eligible for an expanded public-service student loan forgiveness program.
(Josh Edelson/AFP via Getty Images/TNS)
Ask anybody about the White House action last month to forgive up to $20,000 of college debts, and you’ll get an opinion, usually strongly for or against it. Some don’t think it was enough, citing high college costs. On the other side, many Americans feel that such post hoc debt relief sends the wrong message, especially to students and their families who scrimped and saved to avoid higher-education debt and to those who worked their way through college. It rubs many the wrong way to give handouts to upper-middle-class graduates from high-tuition liberal arts schools with degrees in philosophy, the classics and other unmarketable fields of study.

What was missing from the presidential debt pardon was a public service requirement. When I talk about this issue with conservatives, centrists and even moderate liberals, many of them contend that at the very least the debt relief should have been tied to some kind of public service. Whether that could have required volunteer community service, military enlistment or taking a job in federal, state or local government that serves the public on the front lines, the idea is that nobody should get a free pass after they’d already made a binding commitment to repay their debts. Those lucky enough to find higher salaries after graduation can just repay their loans.

But it’s now water over the dam. We cannot reverse what the White House has already approved, unless there arises some kind of lawsuit challenging the president’s authority to offer this relief. So let’s focus on the future, because the enduring problem is that high student debt won’t just go away forever just because millions of lucky souls got a free pass in 2022.

Meanwhile, it’s headline news nationwide that we have a teacher shortage, and if you speak with city managers, county HR directors and school superintendents, they will all tell you that in some fields these employers face continued shortages of workers. Even private-sector economists are starting to suspect we may have a long-term shortage of labor that could prolong the problem for many public agencies for years to come.

Where to Start

There is already a little-known federal program for forgiveness of federal student loans for college graduates working for federal, state, local or tribal governments, as well as for qualified not-for-profits, if they first make 120 monthly loan payments. But that 10-year payments-first requirement shuts out most younger workers; it’s a limited, older-labor-pool demographic that meets these requirements. Only 211,000 workers have qualified under this program since 2017, far short of the 40 million granted relief by the Biden program. For context, state and local governments employ more than 18 million workers. It’s a drop in either of those buckets.

So let’s open the tap and solve two problems with one plan: State and local leaders should take the initiative, working with the higher-education community, to craft a national policy for congressional action that would institute a durable program to award college debt relief, in the form of waived debt repayment, to graduates who take jobs in federal, state or local agencies or approved secular nonprofit organizations — but only those where a demonstrable worker shortage prevails.

This would mean, for example, that entry-level governmental accountants would not get student loan debt relief if the employer can readily fill positions with qualified workers. Nor should debt relief go to police and fire recruits in localities where the ratio of applications to vacancies is abundant — as is often the case culturally, particularly in more affluent suburbs. Instead, a state- or county-level labor department finding could be required to establish that vacancy rates, application flow and recruitment statistics warrant a declaration of worker scarcity. Right now, the No. 1 shortage is probably teachers, but in many locations it could also include such positions as public health nurses and day care workers. We need to match the talent with the vacancies, to pair up employers in the public sector with qualified candidates saddled with college debt.

To start them thinking about a public service career when they take on their federal loans, student borrowers should be required to take an online class on career options in public service. For some, that may get them thinking about taking a minor in fields such as education, librarianship or social work, so that they are better qualified by the time they graduate. This requirement also would thwart expectations that their student debt will be forgiven by a future magical stroke of a presidential pen. Enlarging the pool of qualified and eligible talent for state and local employment can reshape the public sector’s workforce over time, with younger graduates filling vacancies and ultimately impacting retirement system demographics and costs.

Applying the same logic, almost nobody would quibble with the concept of awarding debt relief to students who enlist in the nation’s military, who qualify for homeland security jobs including the TSA or the FBI or the NSA, or who take high-risk jobs like forest firefighting. Anti-poverty service at AmeriCorps VISTA could also be eligible for socially conscious graduates, especially if local governments can hereafter play a stronger role in that program.

One can even make a case that indebted students might take a year or two off in the middle of their collegiate studies to work a qualifying job, just for the experience and references they will gain that make them more employable once they return to school to earn their degree. For those coming from working-class families, there may never be the dreamy “junior year abroad” that affluent parents underwrite, but there could be a really important “junior year in reality” as a teacher’s aide, a library assistant, a police cadet or an EKG technician at a public hospital where on-the-job training is routinely provided.

Helping Local Economies

Although it runs somewhat counter to the labor-shortage thesis, I could also envision a statutory provision that in locations with high unemployment some limited but welcome student debt relief could be awarded automatically to anybody employed by a qualifying public employer. If their local unemployment rate ranks nationally in the worst quintile, or if the U.S. rate exceeds a recessionary 5 percent level nationwide, then several years of payment relief could be provided to such public employees by formula. Waiver of their loan installments would indirectly inject consumption spending into our weakest local economies. Economists would call such a proviso a counter-cyclical “automatic stabilizer.” For local public employers, the recruitment and retention value would be obvious.

National policies along these lines would set achievable expectations for the future, and counter calls for the slippery slope of more ad hoc, no-strings-attached debt relief. At the same time, this policy framework would provide a much-needed talent pool to states, localities, schools and hospitals that should indirectly help improve the quality of public services. High school grads would start thinking about public-sector work earlier if they could see a financial pathway to and through college. As “public service salary supplements,” these focused strategies, if they reshape the labor force over time, might translate into discernable budget savings for public employers without becoming boondoggles and giveaways.

A broad-based coalition of public-sector and public service associations serving the states, local governments, schools and the nonprofit community should collaborate with their counterparts in higher education to devise a plan that can endure for years and equitably span generations to come. There’s a real opportunity here for governments to help themselves by helping their constituents create a brighter future for themselves.

Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
Girard Miller is the finance columnist for Governing. He can be reached at
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