Network Schools – Wayne Gerseny to https://www.nytimes.com/interactive/2022/04/03/magazine/thomas-piketty-interview u w B l.html?h I’ll smid=url-share the Is for

Yesterday’s NYTimes featured an article by Upshot writer Kevin Carey written on July 24 titled “It’s Easy to Forget, but a Program to Forgive Student Loans Already Exists“. There are two problems with the article from my perspective.

First, the “program to forgive student loans” is so convoluted that it’s “existence” is arguable. Contrary to the sub-headline that reads, “Democrats are campaigning to fix an issue that is already starting to resolve itself for many teachers and other public servants“, the article describes an issue that desperately needs to be fixed because the laws underpinning it were ill-conceived, allowed only five days for the initial application process, and changed directions several times over the course of time.  

Second, and most importantly, the implementation was botched because Congress failed to provide the funds needed to provide the staff required to make the implementation possible. Here are the most telling paragraphs from Mr. Carey’s article:

“(The borrowers) needed some good advice. Whom would they call? Not the Department of Education, which subcontracts the work of helping borrowers to “loan servicing companies”. Unfortunately, the servicers didn’t prove up to the task.

Loan servicers are paid a flat rate per borrower for processing loan payments and helping people navigate the repayment process. That means that the more time and effort a borrower requires, the less money the servicer makes. Someone who sets up an automatic debit from a checking account and never picks up the phone is a source of profits. Borrowers who need a lot of time-consuming assistance to ensure that their job, their loan and their repayment plan are all eligible for the forgiveness program are a financial liability.

The results were predictable. In June 2017, a few months before the first public servants were (theoretically) eligible for loan forgiveness, the Consumer Financial Protection Bureau issued a report describing the many ways loan servicers were messing things up.

This sums up the whole problem with government today: it is understaffed and therefore incapable of functioning effectively. Taxpayers want the government to come up with a FAST, CHEAP solution to complicated problems and to run like a business. As Mr. Carey explains later in the article, when USDOE outsourced their work to “loan servicing companies” they operated like a business and got a FAST and CHEAP “solution” to the complicated problem Congress created… a “solution” that padded the wallets of the “loan servicing companies” but left the borrowers high and dry…. and “proved” that government is the problem. The headline to this should read: “It’s Easy to Forget that an Effective Government Requires Bureaucrats”….

Mr. Carey concludes his article with evidence that more and more borrowers are becoming eligible, and seems to think that since the percentage of approved borrowers has increased the problem is taking care of itself. After reading the article and looking at the daunting amount the government is on the hook for, I’m not confident that there will be sufficient funds available to honor the promises they made to public employees— especially since the current administration is intent on keeping its promises to the billionaires and shareholders who received massive tax breaks.