It really is an interesting question. I lean on the side of not thinking that we should support people borrowing too much money to attend programs that don’t pay much - particularly on the graduate level - because I think it encourages irresponsible borrowing behavior. I’ve been on graduate school forums similar to this one where students encourage other students to borrow large amounts of money because they can simply pay a little in income-based repayment every month and discharge it in public service loan forigiveness. For example, I once saw someone encourage an aspiring social worker to go to a fancy private school she’d gotten admitted to - that cost $60,000 a year - because she could just borrow the money, pay 10% of her discretionary income, then pay for 10 years and get the money forgiven. Admittedly, I have some friends who have done this too in fields that they know don’t pay well.
Let’s say that social worker borrows $120,000 for her MSW and then gets a social work job paying $45,000 a year. She goes on IBR and PSLF. For the 10 years she repays her loans, assuming average salary growth, she pays between $200 and $400 a month. That’s not enough to pay interest on her loan, so the loan keeps growing, but it doesn’t matter to her because she’s only paying what IBR requires. At the end of 10 years, she’s paid less than $40,000 towards the loan. The amount of forgiveness is $165,000! That’s more than she borrowed! The taxpayers eat that. Essentially, she’s gotten a nice tidy scholarship from the government to attend a fancy private school.
I’m not saying I’m not on board with IBR and PSLF - I think they’re great programs that may encourage some people to become teachers, public interest lawyers, social workers, nurses, and the like. I just think we should cap the amount of forgiveness that we allow so as not to encourage people to borrow large amounts to go to very expensive private schools when they could hold costs down by attending a much less expensive place. That then may encourage places like Columbia, which charges $45,000 a year in tuition and fees for its MSW program (and allows students to borrow the extra $25-30K a year it costs to live in NYC), to lower their prices.
I don’t think that matters…spouses get divorced, partners break up, and people die or become incapacitated. It would be terrible to borrow $120,000 for a social work degree because your partner is a lawyer and then three years later he can’t work anymore, or decides to become a teacher instead, or whatever and now you have to repay that debt.