Jason DiLorenzo, PSLFJobs.com Founder, joins Yahoo Finance’s Akiko Fujita to discuss how the 2020 presidential election could impact federal student aid programs.
AKIKO FUJITA: Well student loan forgiveness is a key issue in this upcoming election, especially among younger voters with the average student loan debt for recent college graduates hitting a new record-- that number now topping more than $30,000. Let's bring in Jason DiLorenzo. He is the founder of PSLFJobs.com, and he joins us from Phoenix today. Jason, welcome.
JASON DILORENZO: Thank you. Thanks for having me.
AKIKO FUJITA: Let's first talk about how your platform works. PSLF-- we're of course talking about Public Service Loan Forgiveness. But how does your platform enable those who have student debt to find jobs to help pay it down?
JASON DILORENZO: So we are a jobs platform and in addition also a resource to individuals who are considering or pursuing the Public Service Loan Forgiveness Program. So the-- there are about 35 million. The public-service sector is a lot larger than you might think-- 35 million jobs in the United States, about 12 or 13 million 501(c)(3) non-profit organizations, and then an additional 22 million federal, state, or local governments or agencies.
So we only feature PSLF-qualified jobs on our platform, and then we also offer to student loan borrowers an analytical resource to help them figure out how much their student loan debt would cost through the Public Service Loan Forgiveness Program and give them an opportunity to post jobs and their resume or post their resume where only they're going to be applying for qualified jobs.
AKIKO FUJITA: When you talk about the number of PSLF jobs, how have you seen that increase along with the amount of student debt for college graduates?
JASON DILORENZO: I'm starting to see now, as I speak a lot at graduate programs at schools-- and what I'm starting to see now is that those that have higher levels of student loan debt are moving their eye more towards getting loan forgiveness, tax free in 10 years, by working for a qualifying entity. I started a advisory five years ago called Doctors Without Quarters specifically for medical graduates. And in managing about $1.5 billion of federal student loan debt, about 80% of that was being positioned for public service loan forgiveness. So we're starting to see career decisions being made for the economic value of getting loan forgiveness, and more and more people considering working in a nonprofit or government environment.
AKIKO FUJITA: So let's talk about how the candidates have positioned themselves on this particular issue. You've got Joe Biden promising $10,000 in forgiveness for federal loans. President Trump hasn't specified that, but he's sort of alluded to the fact that he's open to the policy as well. I mean, how do you see this playing out? And more importantly, especially those who are shouldered with this kind of debt--
JASON DILORENZO: No doubt.
AKIKO FUJITA: --which way do your votes break as a result of where these candidates stand?
JASON DILORENZO: For the Public Service Loan Forgiveness Program specifically, the average borrower that's pursuing that program today-- there's about 1.4 million people enrolled in the program right now are pursuing loan forgiveness-- their average student loan balance is actually to be forgiven about 70-- little over $70,000. So how the PSLF Program works is that you pay based on your income for 10 years and then get granted tax-free loan forgiveness.
So blanket loan forgiveness for those who are seeking income-based repayment plan forgiveness, if it's $10,000 removed from what gets forgiven, the actual out-of-pocket result to them doesn't-- it doesn't move the needle at all. If you have $10,000 of federal student loan debt and that gets eliminated or canceled, certainly that's an immediate benefit to you. But I'm not seeing it move the needle for those larger debt balances where borrowers are pursuing a loan forgiveness either through public service, or the income-driven plans today have longer-term loan forgiveness available.
The Trump administration in the most recent budget proposal that they came out with proposed to eliminate Public Service Loan Forgiveness. So to go in front of those individuals who might be pursuing that or considering that, even if the program were to be eliminated this afternoon, you have it in your master promissory notes, and so individuals who have-- I'm sure you've read them cover to cover. But when you fill out your master promissory note with your lender, the Department of Education, you have this available to you.
And so borrowers today are going to be grandfathered in to not just the Public Service Loan Forgiveness Program but other indications of all the things that were in their promissory notes at the time. So you might have a new universe of options available to you. I think both administrations now are trying to simplify the options in what is ultimately kind of a complex and evolving marketplace right now.
But a little more, we're seeing the Trump administration come a little closer--
AKIKO FUJITA: Yeah.
JASON DILORENZO: --in terms of also being generous with loan forgiveness.
AKIKO FUJITA: OK, Jason DiLorenzo there, joining us from PSLFJobs.com. Appreciate your time today.
JASON DILORENZO: Thank you.