Question: I am a volunteer EMT at my local fire department. Am I eligible for loan forgiveness?
— Jong in Maryland
Howard Dvorkin CPA answers…
Sometimes the shortest questions produce the longest answers. In this case, the answer is short, but the explanation is quite longer.
The answer: Sadly, no. You don’t qualify for Student Loan Forgiveness. Here’s some background…
The explanation: The federal government offers Loan Forgiveness for firefighters, police officers, nurses, teachers, and those serving in the military. However, you need to be employed.
In fact, you need to fill out a government document called the Employment Certification Form before you qualify for loan forgiveness.
Why aren’t volunteer firefighters included? I have no first-hand knowledge of how the government came to that decision, but it’s easy to speculate three reasons why…
1. Loopholes
It would be difficult if not impossible to figure out how much “volunteering” would qualify for this very significant benefit. Government regulations are confusing enough, and even Student Loan forgiveness requires jumping through many hoops.
(For instance, once you fill out that form I mentioned, you must enroll in one of three “hardship-based federal repayment plans” with names like Income Based Repayment, Income Contingent Repayment, and Pay as You Earn. Then you need to wait 10 years for the “forgiveness” part to kick in.)
I can only imagine how many loopholes clever people would seek, and then how many more rules the government would have to devise to combat that.
2. Mission creep
If volunteer firefighters are allowed to seek student loan forgiveness, what about volunteer teachers? Candy Stripers in hospitals? Police Explorers?
Once the government bestows a benefit, those on the outside but directly adjacent want in. That’s understandable, but it can also be expensive and complicated.
3. Concept
The original idea behind student loan forgiveness was simple: Public servants often don’t earn as much as those in the private sector, so they’ll have even more trouble than their private peers paying off steep student loan balances.
At the same time, we need our public servants if we’re to maintain our status as the best country on the face of the planet.
There’s still good news, Jong: Those other federal programs I mentioned can still help you manage your student loan debt. I’ve seen these programs literally turn lives around — making home-buying possible where it wasn’t before, and even solving marital problems due to financial stress.
So I urge you, Jong, to look into these programs, either here at Debt.com or elsewhere.
Have a debt question?
Email your question to [email protected] and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.
