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Written by: William Chittenden, Texas State University

Published: 29 December 2023

 

The Public Service Loan Forgiveness program, which the George W. Bush administration created in 2007 to encourage people to work for the government and nonprofits, has grown significantly during Joe Biden’s presidency. The Conversation asked economist William Chittenden to explain what this student loan program is, who is eligible and what has changed lately.

How does the Public Service Loan Forgiveness program work?

To qualify, borrowers must currently work for the government or a nonprofit.

Americans getting this debt relief include many nurses, teachers, first responders, Peace Corps volunteers and social workers.

Once enrolled, borrowers can have their remaining student loan balance forgiven if they remain employed in public service and make 10 years of monthly on-time payments.

The government can cancel only the balance of the direct loans the Department of Education makes through this program. Any student debt that borrowers owe private lenders remains outstanding.

Why are many more loans being forgiven now?

Borrowers began to apply in 2017, after the requisite decade of on-time payments, for their remaining balances to be forgiven. However, nearly all of these applications were rejected – about 98% of them.

The vast majority of these denials were due to technicalities. Many borrowers felt cheated after holding up their end of the deal but still finding themselves burdened with debts they didn’t believe they should have to repay. Some of them filed a class-action lawsuit, which the Biden administration settled in 2021.

Recognizing these concerns, the government streamlined and overhauled the Public Service Loan Forgiveness program.

The Department of Education announced several important changes in 2021. The federal government expanded the types of loans that are eligible for forgiveness and gave borrowers a way to get credit for past payments.

However, most student loan borrowers did not see the impact of this change until October 2023, when student loan payments resumed for other borrowers after being paused starting in March 2020 because of the COVID-19 pandemic.

How much debt has been forgiven so far?

An estimated 750,000 Americans have gotten US$53.5 billion in student debt erased through this program. That’s more than one-third of the roughly $132 billion in student debt relief the Biden administration says it has approved through late 2023 for 3.6 million borrowers, through several programs.

But the deleted debt has chipped less than one-tenth of the total outstanding debt off the government’s ledgers. About 43.6 million Americans owe a total of $1.64 trillion in federal student loan debt. Some of the Biden administration’s efforts to cancel larger chunks of this debt have failed because of legal challenges that went all the way to the Supreme Court.

The total amount of student debt, including both the federal and private varieties, declined slightly in the second and third quarters of 2023 because the value of the student loans paid off or forgiven exceeded the value of new student loans being issued.

There is currently no expiration date for the Public Service Loan Forgiveness program. However, some borrowers have only until Dec. 31, 2023, to try to consolidate their student loans so they can qualify for this program and some other kinds of student loan forgiveness.

What about people in college now or going soon?

Current and future college students will also be able to apply to the program if they embark on public service careers.

There are also several income-driven repayment plans that student loan borrowers can apply for. The monthly student loan payment under these plans is typically between 5% and 20% of the borrower’s monthly discretionary income, depending on the specific plan.

Any remaining loan balances will be forgiven after 20 to 25 years of on-time monthly payments. People who participate in an income-driven repayment plan can also apply to the Public Service Loan Forgiveness program.

An estimated 855,000 borrowers currently qualify to have $42 billion in loans forgiven based on making their student loan payments for the past 20 years.

What else is going on with student debt forgiveness?

Over the past few decades, many Americans took out student loans to attend a college or technical school that defrauded them. Others took out loans to enroll in schools that went out of business before those borrowers could complete their degrees. The Biden administration has made it easier for these people to have their loans canceled through the borrower defense to repayment program.

And the Biden administration has canceled $11.7 billion in debt owed by almost 513,000 borrowers with a total and permanent disability.

In addition, many borrowers have loan balances that have grown to a sum that exceeds what they originally borrowed. And there are Americans who have been paying on their student loans for at least 25 years. The Department of Education is also considering making these former students eligible for loan forgiveness.

William Chittenden, Associate Professor of Finance, Texas State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Written by: Elizabeth Larson

Published: 28 December 2023

LAKE COUNTY, Calif. — Faced with dramatic cost increases for its Burns Valley sports complex, the city of Clearlake is looking for additional funds and what it can do to reduce the costs of the project.

The sports and recreation center, to be built on 25 acres behind the Burns Valley Mall at 14885 Burns Valley Road, is proposed to include baseball and soccer fields, a 20,000 square foot recreation center with basketball and volleyball courts, a small amount of retail space, a new public works corporation yard, a picnic site, walking areas, an Americans with Disabilities Act-accessible playground and a native plant demonstration area.

City leadership sees the project as key to the city’s future prospects.

“You believe as I do that this is a critical project for the future of the city and the larger region as well and we really need to figure this out,” City Manager Alan Flora told the council during its Dec. 7 meeting.

Flora said the city has been working on the Burns Valley sports complex project for several years.

The city purchased the property at the end of 2020 and immediately started working on the environmental review and design work, Flora said.

However, the project was stalled for about a year as the city attempted to reach an agreement with the Koi Nation tribe over mitigation measures. “That agreement was ultimately never reached,” Flora said.

The city planning commission went forward with approving the environmental documents. After the council refused to grant the Koi’s appeal of that decision, the tribe filed a lawsuit in July, four months after it had sued over the city’s 18th Avenue project, which went to a hearing in October. Last month, a judge ruled against the tribe on the 18th Avenue suit.

Flora said the Burns Valley litigation is still ongoing. Lake County Superior Court records show a case management conference is scheduled for February.

The problem the city is facing now with the continual delays, said Flora, is the increase in costs.

When the city started working on the grant, estimates are that the project would cost a little over $8 million. Flora said the city was able to put $9 million through grants from the state and federal governments, city funds, and contributions from Lake County Tribal Health and the Konocti Unified School District.

The city has continued working to complete the project’s construction documents. A few weeks before the meeting, Flora said they received the 60% design plans from their design team — the same firm that did the design of Lakeport’s Xabatin Park.

Along with those plans, the city received an updated cost estimate that put the construction at $18.7 million — over twice what the city has available — and a figure which doesn’t include the recreation center itself, expected to cost another $12 million to $15 million, Flora said.

On top of that, the city still has to deal with the litigation with the Koi Nation. In October, the council approved doubling the money set aside for the litigation to $500,000.

To overcome what Flora called the “very significant gap” between the earlier and recent cost estimates, the city will have to look both at cost reductions and additional funding opportunities.

The council could make the decision to abandon the whole project, but Flora cited the project’s role in the city’s future.

He wasn’t asking the council to try to solve all of the problems at that meeting, but he wanted council members to be aware of the need to come up with ideas about additional funding.

Flora noted that the council had established for the project an advisory committee composed of planning commissioners, council members and community group representatives. He suggested reconvening that group.

There are basic project components that can’t be eliminated, like the infrastructure for the electrical and lighting components, which Flora said totals $6 million. It’s a high-end system that eliminates glare for the neighborhood.

The soccer field proposes artificial turf, more expensive than sod. “Is that something we really want?” Flora asked.

He also asked council members to speak to state and federal representatives for possible additional funding.

Flora said the goal, as of a month before that point, was to complete the project design plans in January and to put it out to bid. They hoped the litigation would have been resolved by that time, but as it isn’t, there are going to be additional delays.

Councilman Dirk Slooten asked how confident Flora was in the recent estimate, noting it was so different from the first that one of them must be wrong.

Flora said he wished he didn't have very much confidence in the latest estimate, but that he’s gone through it, line by line, and compared it with recent projects the city has completed. He also noted that the design firm is the same one that did the Lakeport park, so they had the cost estimates for that project available.

Ultimately, he noted, “I don’t think it’s as far off as we would like it to be.”

Councilmember Joyce Overton asked if there was a way to do the project in phases while looking for more funds.

Flora said yes, but he said they may not like the alternatives. “A lot of the cost is really the basic infrastructure,” he said, explaining that it doesn’t make sense to cut infrastructure — like field lighting — that will be needed for key aspects of the project. Other items like park benches and trees could be cut out, but that won’t save much.

There are some potential grant opportunities coming up early in 2024, which Flora shared with the council.

While there are those opportunities out there, it will take time. “The more time it takes, the more it costs,” said Flora, and if the city has the $18.7 million at this time next year, it’s not going to be enough.

Councilman Russ Cremer said the project is extremely important for the community’s youth and he didn’t see the council walking away from it.

Councilman David Claffey said he saw it the opposite way. “This is devastating,” he said, adding that the city had a short window in which they had the money and the plans, and they missed it.

Claffey was concerned that the city would be chasing its tail for the next five years. “We’re in a tough spot here.”

Flora said during the discussion that the city needed to be really committed to making the project a world-class facility.

Overton agreed, and suggested they reconvene the advisory group as a first step.

Flora said city staff also is working on a sponsorship program that could help raise some funding, as it did for Austin Park. They want to roll that out after the start of the new year.

During public comment, when a community member suggested abandoning the project and choosing another site, Flora responded, “Unfortunately, the Koi Nation are threatening litigation on almost every development project in the city” so he didn’t think choosing another site would be helpful.

The council also heard support from community members involved with youth sports.

One of those was Helen Mitcham, a board member for South Shore Little League. She said 392 children played for the league last year, which doesn’t count volunteers. “This is a big deal for them.”

The league was chartered in 1959 and so is celebrating its 65th anniversary, Mitcham said. Cremer said he had played on the fields as a child.

“We have a lot of people who are excited about this,” Mitcham said, adding that she refuses to be negative and believes they will find the money somewhere.

Cremer said they have to do a full-court press to find more money and shave costs, because they absolutely need the project for the community and to boost tourism. “So it’s good all the way around. We’ve got to get it done.”

The council agreed to reconvene the advisory committee and to press forward.

Flora, in turn, asked the council to speak to their state representatives about financial help.

Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.

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Written by: Lake County News reports

Published: 28 December 2023

With 2024 about to arrive, the California Highway Patrol is educating the public on traffic safety laws that were passed during this year’s legislative session and signed by Gov. Gavin Newsom.

The laws referenced below take effect on Jan. 1, 2024, unless otherwise noted.

Vehicles: Registration — AB 256 (Dixon)

Existing law requires current month and year tabs to be displayed on the registered vehicle’s rear license plate.

Beginning July 1, 2024, and until Jan. 1, 2030, a violation of vehicle registration shall not be the sole basis for any enforcement action before the second month after the month of expiration of a vehicle’s registration.

However, if a vehicle is stopped for any other Vehicle Code violation, enforcement action for a violation of vehicle registration may be taken before the second month following the month of expiration.

Late registration fees from the Department of Motor Vehicles will still apply.

Vehicle Removal: Expired Registration (AB 925, Ta)

Requires a peace officer or traffic enforcement official to verify the lack of current vehicle registration with the Department of Motor Vehicles before towing a vehicle for expired registration longer than six months and prohibits the vehicle from being towed if the officer or traffic enforcement official does not have immediate access to those records.

Vehicles: Speed Safety System Pilot Program — AB 645 (Friedman)

The cities of Los Angeles, Oakland, San Jose, Glendale, Long Beach, and the City and County of San Francisco may install a limited number of cameras to enforce speed limits for a five-year pilot period in school zones and designated “safety corridors” — locations that have a high occurrence of fatal and injury crashes — and areas known for illegal street racing.

Recorded violations will be subject to a civil penalty.

Vehicles: Stopping, Standing, and Parking — AB 413 (Lee)

Designed to increase visibility at crosswalks, this law prohibits parking or stopping a vehicle along a curb at least 20 feet from a marked crosswalk or 15 feet of a crosswalk where a curb extension is present.

The regulation only applies to the side of the road of the vehicle’s approach to the crosswalk.

Local jurisdictions may establish different distances through local ordinances by marking areas with signs or paint.

Cruising — AB 436 (Alvarez)

The law removes city and county authority to regulate cruising via local ordinances.

Additionally, the law legalizes "lowrider" vehicles to cruise California's streets, by removing the height restriction on lowered vehicles.

Automobile Dismantlers: Catalytic Converters — AB 641 (Fong)

This law redefined an automobile dismantler to include individuals in possession of nine or more catalytic converters.

Additionally, the law creates penalties for individuals illegally acting as an automobile dismantler. Individuals and businesses who have a legitimate purpose for having catalytic converters, such as repair shops, will be excluded from penalty.

Vehicles: Catalytic Converters — AB 1519 (Bains)

This law makes it illegal to remove a Vehicle Identification Number (VIN) marking from a catalytic converter.

It also makes it illegal to possess three or more catalytic converters that have had their VIN markings removed.

Vehicles: Catalytic Converters — SB 55 (Umberg)

This law requires a motor vehicle dealer or retailer to have the catalytic converter engraved or etched with the VIN before a new or used truck or car is sold.

The law does allow for the purchaser to decline having the VIN etched or engraved on the catalytic converter.

Emergency Notification: Ebony Alert: Missing Black Young — SB 673 (Bradford)

This legislation establishes the “Ebony Alert,” which allows law enforcement agencies to request the CHP to activate an alert for Black youth, including young women and girls between 12 to 25 years of age, who are reported missing under unexplained or suspicious circumstances, at risk, developmentally disabled, cognitively impaired, or who have been abducted.

Emergency Services: Endangered Missing Advisory — AB 946 (Nguyen)

This new law will aid in the recovery of missing persons who do not meet the age restrictions associated with the AMBER and Silver Alerts.

The new law authorizes law enforcement agencies to request the CHP activate the “Endangered Missing Advisory” for public distribution of missing person information within appropriate geographical areas when specific criteria is met.

Vehicle Safety Regulations — SB 68 (McGuire)

This law authorizes the CHP to establish rules and regulations allowing commercial vehicles capable of carrying more than 500 gallons of fuel to exceed the standard
10 hours-of-service limit during Governor-declared State of Emergencies.

The exception only applies for the purpose of vehicles transporting fuel for refueling aircraft used in emergency-related activities, including fire suppression.

Pupil Transportation: Driver Qualifications — SB 88 (Skinner)

This law will require drivers and their vehicles which are used by a local educational agency to provide pupil transportation for compensation, to meet certain safety requirements.

Vehicles: Zero-Emission School Buses: Signage — SB 775 (Padilla)

This law authorizes a school district, county office of education, or charter school using a zero-emission school bus to transport pupils at or below the 12th-grade level to place signage on the rear of the zero-emission school bus that identifies the school bus as a clean air zero-emission bus.

It also authorizes the CHP to issue guidelines governing the size and placement of that signage.