Have you noticed that student loan debt is creeping into financial advice shows like Dave Ramsey’s radio program and financial newspaper columns?

In the Raleigh News & Observer, a recent graduate wondered whether to enter the government’s public service loan forgiveness program (PSLF) to reduce his or her loans. “I always associated those jobs with low pay,” the graduate wrote, “and the reason I went to college was to increase my earning power. It would be nice to be debt free after ten years but how does one decide if the trade-off for lower pay is worth the debt forgiveness?”

The columnist, certified financial planner Holly Nicholson, gave a financial answer, a hypothetical example of a graduate with a $40,000 debt. Under the usual 10-year repayment plan (at 5 percent interest) the total payment would be $50,011. With public service (assuming the graduate stayed in public service for 10 years) the total would be $22,344.

That difference raises a moral hazard, for the student and for our country. (Jenna Robinson discussed this hazard in 2009—the program isn’t new but has been growing dramatically, especially at law schools.) “Public service” is defined as working for government, a tax-exempt 501(c)(3) organization, or certain specified non-tax-exempt organizations, such as school libraries or public-service law firms.

Such favoritism reduces the attractiveness of jobs in the private sector and will shift young people into jobs that they may not be suited for. It also perpetuates the myth that public service is morally “better” than private enterprise (think, Peace Corps versus international trade).

Why should the government channel people into one kind of life over another, and distort the economy as well?