April 23

Loan Forgiveness, Beyond Law and Medicine

Loan repayment programs have for decades been a staple at many law schools, from which students often graduate with many tens of thousands of dollars of debt that may impede their ability to work in fields that don’t come with the six-figure salaries top firms pay their first-year associates. Some business schools, similarly expensive, have also ventured into that terrain, and dozens of federal and state programs offer financial assistance to medical school graduates who work in high-need fields.

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It’s not surprising that loan forgiveness programs have been focused on professional education, both because graduates with multiple degrees have been likeliest to incur the most debt — in some cases approaching $200,000 — and because those fields tend to have the biggest gaps in pay between the most lucrative jobs and those in nonprofit or public service realms. But as college tuitions have continued to rise, and with them the debt burdens of average undergraduates, attention has begun to shift. Congress last year created a new program that forgives loans, and otherwise eases the loan repayment burden, for students who enter public service fields and fulfill other national needs.

And on Tuesday, Tufts University unveiled a new program that will, beginning next year, allow any student or alumnus who has educational loan debt incurred while in a degree program at Tufts and works for a nonprofit group or government agency to apply for grants to help them repay their loans.
The program will be financed with $500,000 a year from the Omidyar-Tufts Microfinance Fund, which was created last year with a $100 million gift from the founder of eBay, Pierre Omidyar, and his wife, Pamela.

“Every student who graduates with a loan worries about how to pay it off,” Lawrence S. Bacow, the Tufts president, said in a news release about the Tufts Loan Repayment Assistance Program. “We would like alumni to be able to pursue their passions — to do what they really want to do — without being unduly focused on the need to retire a student loan. It is especially appropriate for Tufts to make this commitment, since as an institution we seek to encourage a spirit of public service in our students.”

About half of current Tufts students borrow money to attend the university, and their average debt is $14,400 in federal and private loans, according to the university, somewhat below the national average of about $19,000. But with the university’s annual cost of attendance now running at $46,640, some students borrow more. As officials were designing the new program, recalls Robert Hollister, dean of Tufts’s Tisch College of Citizenship and Public Service, he encountered one student who had accumulated about $30,000 in debt and planned to become an elementary school teacher — at an annual salary of $30,000. Her $400 monthly student loan payments, Hollister says, “may be impossible to do.”

The new program is, like the Tisch school, which seeks to coordinate and stimulate civic education efforts across the university, part of Tufts’s larger emphasis since the start of the decade on “preparing graduates in all of our fields with the skills to not only be superb engineers, veterinarians and economists, but also community leaders for change,” said Hollister. “We’ve worked with faculty in all disciplines to encourage and help them to integrate skills related to community leadership in their teaching.”

But changing the curriculum to get students to consider entering public service only makes sense if graduates can afford to do so financially, he added. Tufts will make grants averaging in the $1,000 to $2,000 range to several hundred recipients, with the goal of easing the debt burden for lots of students rather than eliminating the payments for a smaller group. Feedback the university has received from alumni of its Fletcher School of Management, which has had a similar program in place for some time, is “that $1,000 to $2,000 a year makes a lot of difference,” said Hollister.

And while some colleges and universities have, in putting in place or expanding loan forgiveness or other financial aid programs, restricted access to certain groups of students or alumni — sometimes controversially — Tufts is making its repayment program available to all students and alumni who have remaining loan balances from their time at Tufts.

“We decided it was important to make it open to students regardless of when they graduated,” Hollister said. “Alumni of the university have been very enthusiastic supporters of our public service initiative over all, so we thought it only made sense to include them in this.”

— Doug Lederman

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