H.R.6720 - Student Loan Forgiveness for Frontline Health Workers Act

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aprilfools

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Anyone know if this is actually gaining any traction?

Seems unlikely this will come to fruition.

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Anyone know if this is actually gaining any traction?

Seems unlikely this will come to fruition.
"Specifically, the Department of Education (ED) must carry out a program to forgive the outstanding balance of principal and interest due on federal student loans for borrowers who are frontline health care workers."

Not sure if this is in reference to "all" student loan debt of medical students. If so, then no this is not going to happen as it creates a 1.) moral hazard and 2.) practical issue.

1.) Moral hazard: Several of us have already paid off a majority of our loans through residency or have chosen less expensive medical schools in order to pay less student loans. Unless this amount is refunded to us (which it wouldn't be), the financially responsible will have essentially lost significant relative income to others.

2.) Practical issue: Who will qualifies for this? Surely the EM resident in NYC who was working overtime and helping intubate COVID patients left and right in March 2020. What about the IM resident in the midwest at a hospital with a surplus of PPE who saw 5-10 COVID patients on floor rotations in October 2020? It isn't nearly the same but it's COVID patient care too. How do you determine eligibility? The federal government has a difficult enough time deciding who is entitled to unemployment benefits which is infinitely less complicated. They're not going to dip their fingers into the nuances of which residents were involved and to what extent so the solution is either they're going to pay all of us even if we were minimally involved creating another moral hazard and huge price tag for them or they're not going to pay us.
 
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"Specifically, the Department of Education (ED) must carry out a program to forgive the outstanding balance of principal and interest due on federal student loans for borrowers who are frontline health care workers."

Not sure if this is in reference to "all" student loan debt of medical students. If so, then no this is not going to happen as it creates a moral hazard and practical issue.

1.) Moral hazard: Several of us have already paid off a majority of our loans through residency or chosen less expensive medical schools. Unless this amount is refunded to us (which it wouldn't be), we have essentially lost relative income to others.

2.) Practical issue: Who qualifies for this? Surely the EM resident who was working overtime and helping intubate patients left and right during March 2020? What about the IM resident who saw 5-10 COVID patients on floor rotations in October 2020? Isn't that patient care too? How do you quantify this? The federal government has a difficult enough time deciding who is entitled to unemployment benefits which is infinitely less complicated. They're not going to dip their fingers into the nuances of health care so the solution is either they're going to pay all of us even if we were minimally involved creating another moral hazard as it's difficult to quantify.

This. I'm in psych, but I see patients on the medicine wards sometimes. Do I qualify? What about my outpatient friends who don't see patients on the wards, but continued to see patients in crisis (and some caught COVID from patients who didn't yet have a positive test)?

And once you say psychiatry is eligible, can you justify saying anyone else isn't?
 
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I'm definitely inclined to agree with that sentiment.

I just wonder with all the platforming this admin has done surrounding some type of loan forgiveness as well as the rhetoric we as a nation have used to describe healthcare workers over the past year to justify their being put in harms way will lead to something actually coming of this, though.
 
As with most loan repayment programs, the hurdles will be so high, the eligibility will be so narrow and the bureaucracy will be so bloated to make any of it useful except for like 3 people who love of OD on forms.

But it doesn't really matter. This will die in committee.
 
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I'm definitely inclined to agree with that sentiment.

I just wonder with all the platforming this admin has done surrounding some type of loan forgiveness as well as the rhetoric we as a nation have used to describe healthcare workers over the past year to justify their being put in harms way will lead to something actually coming of this, though.

The administration never discussed outright student loan forgiveness. That was a Sander's or potentially Warren proposal. The current administration advocated for financial relief during the pandemic as well as freezing interest rates. A fairer solution is hazard pay to resident physicians and it can be applied for by each program director who knows how much COVID exposure their residents had. That way you aren't punishing the person who is in PGY-3 who's nearly paid off his 200K loans by waiving student loans indiscriminately benefiting those who have merely been making minimal payments.
 
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A better solution is to just lower the interest rate for government student loans to near zero if you're doing income based repayment. Gives huge incentive to pay back your loans on a payment plan and adjusts for however much you make, wherever you're at in your life. And auto-enroll all of us into IBR plans.

Current system bad. Loan forgiveness probably worse.
 
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The administration never discussed outright student loan forgiveness. That was a Sander's or potentially Warren proposal. The current administration advocated for financial relief during the pandemic as well as freezing interest rates. A fairer solution is hazard pay to resident physicians and it can be applied for by each program director who knows how much COVID exposure their residents had. That way you aren't punishing the person who is in PGY-3 who's nearly paid off his 200K loans by waiving student loans indiscriminately benefiting those who have merely been making minimal payments.

In this example the person wasn't punished, they just failed to predict the future. Not paying your loans off because you think they'll be forgiven for whatever reason down the road is a gamble that can result in paying far more in interest than you would have otherwise... and paying them off early is guaranteed ROI that the former person is not getting. That person was free to speculate about the future and put their money where their mouth was like everyone else.
 
In this example the person wasn't punished, they just failed to predict the future. Not paying your loans off because you think they'll be forgiven for whatever reason down the road is a gamble that can result in paying far more in interest than you would have otherwise... and paying them off early is guaranteed ROI that the former person is not getting. That person was free to speculate about the future and put their money where their mouth was like everyone else.
It's one thing to invest in stocks for future earnings. It's another to behave fiscally irresponsibly and incurring heaps of debt while hoping for a massive, destabilizing event like COVID-19 for that to be forgiven. If everyone gambled like that, the results would be bad. Regardless student loan forgiveness is not happening as a result of COVID-19. In a month or two, the US will hit herd-immunity and we will be on the path to ending this pandemic. I suppose people who carry the bolded sentiment can always bank on another disaster.
 
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It's one thing to invest in stocks for future earnings. It's another to behave fiscally irresponsibly and incurring heaps of debt while hoping for a massive, destabilizing event like COVID-19 for that to be forgiven. If everyone gambled like that, the results would be bad. Regardless student loan forgiveness is not happening as a result of COVID-19. In a month or two, the US will hit herd-immunity and we will be on the path to ending this pandemic. I suppose people who carry the bolded sentiment can always bank on another disaster.

Yes, people who behave irresponsibly while hoping for some crazy event to forgive their debt are most likely going to have bad results in paying more interest than someone who decides to pay down their debts. This is why I'm saying that the person who chose to pay off their debts is not being "punished" if that does eventually come to pass; the vast majority of times that person will come out ahead because they did the "right" thing. I'm not going to win the lottery because I don't buy lottery tickets, and a lottery winner might do better than me financially, but the vast majority of the time I will be ahead financially because I chose the safe route. Therefore i don't knock the lottery winner and I don't feel bad for myself.

I also agree that widespread student loan forgiveness due to COVID, especially in any amount that will change a physician's debt, is extremely unlikely and couldn't be banked on. PSLF is fortunately still an option for people with huge debt loads though
 
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It's one thing to invest in stocks for future earnings. It's another to behave fiscally irresponsibly and incurring heaps of debt while hoping for a massive, destabilizing event like COVID-19 for that to be forgiven. If everyone gambled like that, the results would be bad. Regardless student loan forgiveness is not happening as a result of COVID-19. In a month or two, the US will hit herd-immunity and we will be on the path to ending this pandemic. I suppose people who carry the bolded sentiment can always bank on another disaster.

Idk what you are talking about. Its not "financially irresponsible" to hold off payments to see if there is loan forgiveness.

In fact, anyone making loan payments before the current grace period ends is a sucker.
 
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Idk what you are talking about. Its not "financially irresponsible" to hold off payments to see if there is loan forgiveness.

In fact, anyone making loan payments before the current grace period ends is a sucker.
Agreed with bolded. I am also not paying anything until we hear what happens in September. I do think it's fiscally irresponsible to:

1.) Use student loan $ to pay for wants rather than needs (ex. branded products, investing in volatile platforms (bitcoin), and spam selling calls with no insurance)
2.) Make a decision on attending XYZ medical school over ABC medical school for wants rather than needs.
3.) Not pay student loans after you begin earning a steady stream of income in hopes of a future catastrophic event or administration change leading to policy which will lead to complete forgiveness.

The reasons I think this are because if everyone acted this way, the student loan system would fail. I suppose maybe we're getting into SPF territory so maybe we'll have to agree to disagree here.
 
Already know to stop reading. Can safely say that BTC has outperformed your portfolio over the last 2 years.

Yes, because nothing volatile could outperform a portfolio over 2 (count 'em, TWO!!!) whole years!
 
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Yes, because nothing volatile could outperform a portfolio over 2 (count 'em, TWO!!!) whole years!

Yes yes, in fact make sure to also avoid investing in a "volatile" stock like TSLA since that is also outperforming what you decided to put your money into.
 
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I do not understand why the govt doesnt get creative with this issue.

Pay off your loan in full in the next 12 months and the interest rate of the loan is WAiVED and all you have to do is pay the principal of the loan.. How many people would take advantage of that.

For those who cant pay their loans off in full, make 12 months of payments on time and interest rates revert to near zero percent for the remainding lifetime of the loan, i f 3 payments are missed, interest reverts back to 6-8 percent whatever the original interest rates were.

OR just flat out decrease interest rates to near zero on all the loans going forward..
 
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I do not understand why the govt doesnt get creative with this issue.

Pay off your loan in full in the next 12 months and the interest rate of the loan is WAiVED and all you have to do is pay the principal of the loan.. How many people would take advantage of that.

For those who cant pay their loans off in full, make 12 months of payments on time and interest rates revert to near zero percent for the remainding lifetime of the loan, i f 3 payments are missed, interest reverts back to 6-8 percent whatever the original interest rates were.

OR just flat out decrease interest rates to near zero on all the loans going forward..

No matter what you propose people will always come out of the woodwork and complain about "people having it easier today". (ignoring the fact that previous generations had it easier than the current graduates in every possible way)
 
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No matter what you propose people will always come out of the woodwork and complain about "people having it easier today". (ignoring the fact that previous generations had it easier than the current graduates in every possible way)
I get it. BUt the purpose of these programs is to jump-start the economy. People are delaying many, many milestones because of student loan repayment. Many people's credit have been ruined by the student loan companies precluding adequate participation in the economy.
 
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I would personally love 0-3% interest. I'd simply make minimal payments and invest in the market for a guaranteed 7%+ over 30 years or >7% in other avenues.

If they wanted they could do super low interest with the caveat that it's all paid back within a small number of years (so your "minimal" payment would still be high but at least its hitting more principle). But it's easy to come after grad students with the fed budget so they're not gonna do that

Yes yes, in fact make sure to also avoid investing in a "volatile" stock like TSLA since that is also outperforming what you decided to put your money into.

I am invested in Tesla since I invest in the entire stock market. It's just stupid to pick one stock and put any amount of money at it that could actually change your finances. Doctors don't need to take risks to end up rich. No one ever did poorly investing in the total stock market when they could, but i can tell you that probably all physicians who are screwed financially either didn't invest enough money in the first place OR invested in single stocks
 
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If they wanted they could do super low interest with the caveat that it's all paid back within a small number of years (so your "minimal" payment would still be high but at least its hitting more principle). But it's easy to come after grad students with the fed budget so they're not gonna do that



I am invested in Tesla since I invest in the entire stock market. It's just stupid to pick one stock and put any amount of money at it that could actually change your finances. Doctors don't need to take risks to end up rich. No one ever did poorly investing in the total stock market when they could, but i can tell you that probably all physicians who are screwed financially either didn't invest enough money in the first place OR invested in single stocks
There is nothing wrong in investing in the total stock market, and there is also nothing wrong in investing in single stocks.. Just your risk tolerance..
 
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