The Public Service Loan Forgiveness (PSLF) program, which fully discharges the student loans of borrowers who work for the government or a nonprofit for 10 years, is one of the most expensive features of the federal role in higher education. Its “jackpot” structure creates incentives for borrowing, thus causing the cost to explode over time.

PSLF is expected to cost $30 billion for new borrowers over the coming decade. Lawmakers could replace PSLF with a flexible block-grant program that incentivizes public service immediately while empowering states to target funds to urgent areas of need. States could use these funds to pay more workers, offer signing bonuses, or improve job benefits. The proposed block grant would spend $15 billion over 10 years distributed through the Department of Labor.