Eliminate Public Service Loan Forgiveness?
A recent Wall Street Journal editorial calls for eliminating the Public Service Loan Forgiveness program. The piece “A Student-Loan Write-Off to Repeal” argues that PSLF has veered far from its original purpose and should be scrapped. The WSJ editorial board notes that PSLF’s “supposed goal was to help government and nonprofit employers compete with private businesses that can pay more.” However, the editors claim the reality is quite different. “Instead, it rewards a politically favored group of workers and can make it harder for private businesses to compete,” it writes.
The Journal’s message is clear: PSLF represents a massive write-off of student debt for a select class of borrowers at taxpayers’ expense. The editorial goes so far as to encourage Congress to step in, bluntly stating, “the GOP can kill loan forgiveness for government and nonprofit workers” if it chooses.
Analyzing A Core Public Service Loan Forgiveness Elimination Argument
The Journal uses several arguments to support its case, but one of its core claims is that “government typically pays as much as, and even more than, businesses” and that PSLF “creates arbitrary distinctions based on tax status. Doctors and nurses at nonprofit hospitals benefit but not those in private practice.”
Using doctors as a prime example is peculiar because data refutes the Journal’s argument (it’s also an example I’m quite familiar with and the salary differences are something I have analyzed in detail). PSLF is a policy response to significant pay gaps between public service careers and the private sector. There is a marked compensation difference between nonprofit and private practice employers in many fields, including medicine, which makes the distinction anything but arbitrary.
This income disparity makes it hard for vital public institutions to recruit and retain top talent. PSLF helps level the playing field. Forgiving student loans after 10 years helps to compensate for that sacrifice and encourages professionals to work in lower-paying, mission-driven roles.
Public Service Loan Forgiveness Case Study: VA Hospitals
Let’s deep dive into the healthcare example used by the Journal. Doctors graduating with hundreds of thousands in student debt might gravitate toward lucrative private practice jobs. However, PSLF makes it more feasible for them to choose a VA hospital – which serves veterans – or a nonprofit clinic without being crushed by debt. Even with PSLF, these doctors aren’t getting a windfall – they’re often still taking a pay cut relative to private sector peers. As Veterans Affairs Secretary Denis McDonough explained in U.S. Medicine, the VA will “likely never be able to compete with the private sector” on physician salaries fully. “If you’re a gastroenterologist at VA, you can just walk across the street and make [three times]
what you’re making at VA,” McDonough said. “We won’t be the lead payer in any market.”
That stark difference underscores why incentives like PSLF matter. Public-service employers often cannot match such salaries. PSLF helps make careers at veterans hospitals and community health centers viable for highly trained professionals who might otherwise be lured away by higher pay.
PSLF is one tool that makes the VA’s compensation package more competitive with private hospitals. Take that away, and the VA might be forced to raise salaries (impacting budgets) or risk more prolonged vacancies and shorter tenures among physicians. The WSJ editorial board acknowledged PSLF’s “supposed goal” of helping public employers compete on pay, but critics say killing the program would actually handicap those employers.
This example highlight a weakness in the WSJ’s argument: eliminating PSLF might save federal dollars in the short run, but it could exact a price on our public workforce. Without the promise of loan forgiveness, fewer graduates may choose critical public service careers – including exacerbating shortages of doctors in veterans hospitals.
In other words, ending PSLF could close off career options for the talent society needs simply because those jobs don’t pay enough to cover student loans. In short, while opponents frame PSLF as a giveaway, supporters see it as an investment in essential services—an incentive that ultimately benefits communities and vulnerable populations.
Data also push back against the notion that PSLF is a boondoggle for the elite. According to Statista, the average amount of student debt forgiven by the PSLF program was about $63,826 per borrower. That reflects the typical debt of professionals like teachers, nurses, and public-interest lawyers who often need graduate degrees. Many PSLF recipients spend 10 years making income-based payments – usually paying thousands of dollars – and have around $60k in debt forgiven. Advocates argue this is hardly an unreasonable reward for a decade of public service, and it’s far less than what those individuals could have earned in the private sector over the same period.
Potential Impact Of Public Service Loan Forgiveness Elimination
If the Public Service Loan Forgiveness program were eliminated, the effects would ripple through healthcare, education, and government agencies. Public hospitals and the Department of Veterans Affairs fear an even more brutal battle for medical talent. “We’re not going to be the lead payer…We need to be a little more competitive,” Secretary McDonough stressed.
The Trump administration had repeatedly sought to end PSLF for new loans, arguing the program was too costly and unfair. President Trump just signed an executive order in March 2025 aimed (narrowly) at excluding specific ideological organizations from PSLF eligibility – a move his supporters applaud but which underscores the view that PSLF is overreaching. GOP lawmakers in the House have also floated ideas to tighten access to PSLF or repeal it as part of deficit-cutting packages. The Wall Street Journal editorial aligns squarely with these calls, essentially urging Republicans to use their power to pull the plug on PSLF.
The Upshot On Public Service Loan Forgiveness
The debate over PSLF’s fate raises a core question: How do we value public service? Opponents frame PSLF as a costly giveaway benefiting well-educated workers and argue that resources would be better spent elsewhere and that public servants shouldn’t get special treatment on loans. Proponents counter that PSLF pays dividends to society by enabling passionate, skilled people to work as teachers, healthcare providers, and public defenders in communities that need them without being penalized for their educational debt. Those on the front lines say the program is working – finally. After a rocky start, tens of thousands of dedicated workers have earned loan forgiveness under PSLF, from nurses in understaffed hospitals to police officers and librarians.
Ultimately, the WSJ editorial is an opening salvo in a more extensive debate. Far from a niche write-off, Public Service Loan Forgiveness sits at the heart of how America incentivizes service and invests in its workforce. Whether PSLF is eliminated or preserved will send a powerful message about what – and who – our society is willing to invest in. For now, the conversation continues with high stakes for borrowers and taxpayers.
Read the full article here
