An end to Income-based and Public Service loan programs?

[cchoukal]

Trump's budget ends student loan forgiveness program, slashes repayment options

---

Members don't see this ad.

 

[rakotomazoto]

Not too surprising, but there is still plenty of time for this headline to get better or worse before it actually becomes law. This is just another reason to push people away from going down the long and financially painful road that is medical education.

 

[AdmiralChz]

Not too surprising, but there is still plenty of time for this headline to get better or worse before it actually becomes law. This is just another reason to push people away from going down the long and financially painful road that is medical education.

To be completely fair, this program wasn’t really designed or intended for high-earners like physicians or lawyers who typically make in excess of $150K. As the article elaborates, it’s more for teachers and social workers who make $40-60K with masters degrees saddled with a large amount of debt and able to repay sometimes only after years/decade or more. The program was well-intentioned but completely unfunded instead kicking it 10 years down the curb to figure out. It sucks if one was planning on this program at the outset as a reason for going into one field or another... but the writing has been on the wall for years (since the beginning?).

The price of education is undoubtedly astronomical, but a solid paycheck beckons on the other side even for those in primary care. There are other mechanisms in place for loan forgiveness - HPSP/Military/Rural/Underserved all offer scholarships and loan forgiveness with proven track records of success.

A likely scenario would be to 1) have a cap on annual earnings making one eligible for PSLF (this would probably include total household income) and 2) for those above the cap having a graduated scale (partial forgiveness, as theoretically one is working for a non-profit rather than a true PP group to use an Anesthesiology example). I don’t think a full elimination of the program is in the cards, and the article seems to indicate that as well.

 

[CUBR]

No question graduate students will be paying more under this proposal. I don't think a full elimination of the program is going to happen either. It's hard to imagine the government being able to back out of a program that has changed 500K people's career choices for the last 10 years.

 

[rakotomazoto]

It's hard to imagine the government being able to back out of a program that has changed 500K people's career choices for the last 10 years.

Historically, when they do make these large changes, they grandfather in people who have existing loans taken out over the past 10 years.

To be completely fair, this program wasn’t really designed or intended for high-earners like physicians or lawyers who typically make in excess of $150K. As the article elaborates, it’s more for teachers and social workers who make $40-60K with masters degrees saddled with a large amount of debt and able to repay sometimes only after years/decade or more. The program was well-intentioned but completely unfunded instead kicking it 10 years down the curb to figure out. It sucks if one was planning on this program at the outset as a reason for going into one field or another... but the writing has been on the wall for years (since the beginning?).

Completely agree that the program was never set up to succeed, for this reason my personal plans never included PSLF as a serious option. I would be eligible in 2024 and I was always skeptical that there would be funding by then. After people began to have their debts relieved in 2017, the government would realize how much $$$ they were giving away and the gravy train would come to an end. Which is exactly what is starting to happen. I actually do believe that the program will eventually be dissolved completely at a future date, although the other loan forgiveness options that you mentioned (military/rural/underserved) are not going anywhere. Totally my own opinion, but it seems like the government would rather increase funding to other programs that give it more direct control over the money and the training rather than allowing people to go to whatever overpriced private schools that they want and then send the bill to Uncle Sam 10 years after they finish.

For pysch and family medicine and others in primary care living in expensive urban areas, it would be difficult to practice without some form of loan relief. For sure, these is only infinitely more true for teachers and social workers in those same areas. But you could also argue that their training is not as long and expensive as primary care doctors' training.

 

[BLADEMDA]

"However, undergraduate students would have their loans forgiven after 15 years, compared with 20 years now. So they'd be paying more per month, but less overall. Graduate students, meanwhile, would not have their loans forgiven for 30 years."

-----------
I doubt the democrats go along with this as proposed. Trump has no spine and will fold like a wet noodle once the democrats take control like they did with the bloated spending bill recently passed. I suspect a gradual phase out of loan forgiveness based on income.