Bush Firefighter Student Loans
The Bush Firefighter Student loans are a nickname given to certain provisions of recent legislation that has lightened the burden on students and student loans in general.
The College Cost Reduction and Access Act was passed by both houses of Congress and signed into law during the fall of 2007. The act had many long reaching effects on the area of student loans. The maximum amount for Pell Grants was to be gradually increased through 2012. The interest amounts and requirements for several student loan programs were to be reduced. One of the important provisions of the act was a program of loan forgiveness for students who perform 10 years of service in selected careers. This provision is sometimes called Bush Firefighter Student Loans.
The nickname comes from President Bush, of course, who has done much to make college more accessible and considered the College Cost Reduction and Access Act an important piece of legislation toward that goal. Among the several career fields that classify as public service under the loan forgiveness program are the military, law enforcement, teaching, nursing, and firefighting.
The idea behind the bill is fairly simple. Many students who finish college burdened by long term debt from their Government backed student loans are not as likely to choose a career field that serves the public interest, such as law enforcement or firefighting, over a career field that offers more immediate financial compensation. The idea of the loan forgiveness program is to encourage these students to follow up on any interest in a public service field.
The law requires that the student make payments for a period of ten years while serving in the public service field. At this time, the remaining loan balance, both interest and principle will be “forgiven.” This program only applies to students with Government backed and eligible student loans. Private student loans that were secured without Government backing are not covered by the program.
The Bush Firefighter student loans are not actually loans, but a loan balance reduction program to encourage loan holders to enter the field of firefighting. The forgiveness of a part of their student loan is seen as compensation for the lower earning potential of these necessary and important public service careers. The student loans industry has some concerns about the program citing that the loan forgiveness program could lead to higher interest rates in the future to keep the student loan market competitive. There is also some criticism that the program does too little to encourage graduates to select these fields and higher wages or even educational subsidies would be more effective.
