The CFPB announced yesterday that it has launched a new initiative to help teachers and other public servants handle their student loan debts.
The initiative has two components: a toolkit for school districts, non-profits and other public service employers and a “public service pledge” for such employers to make.
The toolkit is designed to help employers provide information about loan forgiveness programs to their employees. It details steps employers should take, such as having employees complete an Employment Certification for Public Service Loan Forgiveness as part of the employer’s onboarding process and assisting employees in recertifying annually. It also includes a one-page action guide for employees about possible repayment options and a sample letter for employers to send to employees with a copy of the action guide. There are also responses to Frequently Asked Questions. (As indicated by the CFPB’s response to one FAQ, only federal Direct Loans are eligible for Public Service Loan Forgiveness. Certain other federal loans can be consolidated into a new Direct Loan to qualify.)
The CFPB also wants school districts and other public service employers to make a pledge in which they commit to assisting their employees with handling student debt. According to the CFPB’s announcement, Richmond Public Schools in Virginia and the City of South Bend, Indiana have already signed on to the pledge.
Given the vital social role played by public servants, we applaud the CFPB for its initiative and hope employers will respond positively to the CFPB’s call to action.