PSLF reality, NYTimes

[Anti-PD1]

28,000 Public Servants Sought Student Loan Forgiveness. 96 Got It.

A program intended to wipe away the student loans of qualifying public servants has rejected more than 99 percent of those who applied, according to a government audit that found that “fragmented” management and “piecemeal” operating instructions had contributed to the failure to forgive more debt.

The Education Department said last week that 28,000 borrowers had submitted applications to have their debts canceled since the public service loan forgiveness program began accepting them a year ago. Only 96 were approved, the agency said. More than 70 percent were rejected for not meeting the eligibility requirements. Most of the rest had left necessary information out of their applications.

In its report on Thursday, the Government Accountability Office said major administrative failings had left both the program’s administrator and borrowers in a state of confusion about the program’s rules.

To get their remaining balances forgiven, applicants must spend at least a decade working for government agencies or certain types of nonprofit organizations; they also must make 120 qualifying monthly payments on their federal student loans. More than 1.2 million borrowers have sought to have their employment certified for eligibility in the program, the accountability office said.
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I wouldn't bank on this. Never a free lunch.

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[evilbooyaa]

There was a separate article talking about how the type of loans most students had back when this started are different from the loans people are getting now. I agree that for anyone considering it, there's a lot of fine print that really needs to be looked over very closely before deciding to enroll in it (do you ahve the right type of loans, is your employer really eligible, etc.). The companies that are pipelining people into PSLF and responsible for making the payments on lenders' behalf have proven themselves to be overall quite incompetent with this success rate.

The most glaring thing is that you can't tell if you're on track until you're at year 10, which is absolutely ridiculous. You should be able to query whether your payments (at one year or later) have been counting towards the 10 year requirement, and if not, you can either switch things (like which company you work for) or bail together (if your federal loans aren't the right type of federal loans)

I remember the conclusion of that other article (somebody should really link it if they can find it) was that, hey, there are 96 people now that got hundreds of thousands of student loan debt discharged though, so yay?

 

[Raney Schauer]

"In its 2018 budget proposal, the Trump administration proposed eliminating the loan forgiveness program to save money, but Congress has shown little inclination to do so.

Why bother getting rid of something that doesn't work anyway? There's no impetus to get rid of it or fix it.

BLUF: They. Don't. Care. They'd rather take part in the circus or bloodletting of the week.

 

[radsisrad]

"In its 2018 budget proposal, the Trump administration proposed eliminating the loan forgiveness program to save money, but Congress has shown little inclination to do so.

Why bother getting rid of something that doesn't work anyway? There's no impetus to get rid of it or fix it.

BLUF: They. Don't. Care. They'd rather take part in the circus or bloodletting of the week.

If a system or program truly doesn't work (or doesn't serve a useful purpose), it ought to be discarded. Useless programs are bloat and distractions.

 

[OneTwoThreeFour]

If a system or program truly doesn't work (or doesn't serve a useful purpose), it ought to be discarded. Useless programs are bloat and distractions.

The program doesn't work because the current administration doesn't support it, not the other way around.

 

[Raney Schauer]

If a system or program truly doesn't work (or doesn't serve a useful purpose), it ought to be discarded. Useless programs are bloat and distractions.

LOL that's adorable.

 

[aafisahar]

All the more reason to get out and into private practice.

 

[deleted547631]

28,000 Public Servants Sought Student Loan Forgiveness. 96 Got It.

A program intended to wipe away the student loans of qualifying public servants has rejected more than 99 percent of those who applied, according to a government audit that found that “fragmented” management and “piecemeal” operating instructions had contributed to the failure to forgive more debt.

The Education Department said last week that 28,000 borrowers had submitted applications to have their debts canceled since the public service loan forgiveness program began accepting them a year ago. Only 96 were approved, the agency said. More than 70 percent were rejected for not meeting the eligibility requirements. Most of the rest had left necessary information out of their applications.

In its report on Thursday, the Government Accountability Office said major administrative failings had left both the program’s administrator and borrowers in a state of confusion about the program’s rules.

To get their remaining balances forgiven, applicants must spend at least a decade working for government agencies or certain types of nonprofit organizations; they also must make 120 qualifying monthly payments on their federal student loans. More than 1.2 million borrowers have sought to have their employment certified for eligibility in the program, the accountability office said.
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I wouldn't bank on this. Never a free lunch.

I believe the biggest problem is that most of those who’ve applied thus far are in FFEL loans and not Direct Loans. FFEL and Perkins loans by themselves don’t qualify for PSLF. The key is to have 90%+ of the aggregate amount of student loans as Direct Loans and be paying via IBR, PAYE, RePAYE with a valid 501(c)3, or government / public position, as an employer. Most graduate programs circa 2011 or so have prioritized disbursing via Direct Loans.

 

[radsisrad]

The program doesn't work because the current administration doesn't support it, not the other way around.

I'm not remarking on whether it's objectively useful; what I'm saying is that if it's been reasonably determined to be more or less useless, it ought to be discarded.

 

[OneTwoThreeFour]

I'm not remarking on whether it's objectively useful; what I'm saying is that if it's been reasonably determined to be more or less useless, it ought to be discarded.

So you're not saying whether or not it is useful but then going on to say it is useless.
A hose is useless if it isn't given a water supply.
A flashlight is useless without batteries.
We don't just throw those things away.
The program is useless because it isn't given the support and infrastructure in order to make it work. If those things were provided I'd say PSLF would be very useful.

 

[nimbus]

Linked to OP’s article, how one guy made it work.

Public Servants Do Get Student Loan Forgiveness. Meet One of the First.

 

[NITRAS]

So you're not saying whether or not it is useful but then going on to say it is useless.
A hose is useless if it isn't given a water supply.
A flashlight is useless without batteries.
We don't just throw those things away.
The program is useless because it isn't given the support and infrastructure in order to make it work. If those things were provided I'd say PSLF would be very useful.

I could argue several things against the program.
1. Why on Earth would the taxpayers give hundreds of thousands of dollars to people that have the potential to earn the top 1-5% of all Americans.
2. It encourages students to make bad decisions (go more into debt, and go into fields where they will be underpaid. Its ridiculous to encourage people to pay more for less return.
3. It encourages people to stay in debt longer than they should.

I think the whole student loan program needs to be revamped, but that is a separate issue.

 

[OneTwoThreeFour]

I could argue several things against the program.
1. Why on Earth would the taxpayers give hundreds of thousands of dollars to people that have the potential to earn the top 1-5% of all Americans.
2. It encourages students to make bad decisions (go more into debt, and go into fields where they will be underpaid. Its ridiculous to encourage people to pay more for less return.
3. It encourages people to stay in debt longer than they should.

I think the whole student loan program needs to be revamped, but that is a separate issue.

Rescind it for physicians, sure. But the main beneficiaries of this program are social workers and teachers.

 

[RangerBob]

Rescind it for physicians, sure. But the main beneficiaries of this program are social workers and teachers.

It was intended to benefit them. And by the numbers they could be the biggest group. But when it comes to total cost, the bulk of PLSF dollars will be going to people with graduate degrees (MDs, lawyers, etc).

I agree with the above posters it’s a terrible policy and encourages bad behavior and is quite regressive. But I cannot fault anyone for taking advantage of it-I sure will if I can. I have a few years into the program but my current job isn’t eligible. But my next one could be, and if it is, I’ll definitely go for forgiveness

 

[OneTwoThreeFour]

It was intended to benefit them. And by the numbers they could be the biggest group. But when it comes to total cost, the bulk of PLSF dollars will be going to people with graduate degrees (MDs, lawyers, etc).

I agree with the above posters it’s a terrible policy and encourages bad behavior and is quite regressive. But I cannot fault anyone for taking advantage of it-I sure will if I can. I have a few years into the program but my current job isn’t eligible. But my next one could be, and if it is, I’ll definitely go for forgiveness

What bad behaviors are we talking about?This is a population that have been employed, paying off their loans on time, and working in public service for at least a decade.

 

[kb1900]

It was intended to benefit them. And by the numbers they could be the biggest group. But when it comes to total cost, the bulk of PLSF dollars will be going to people with graduate degrees (MDs, lawyers, etc).

I agree with the above posters it’s a terrible policy and encourages bad behavior and is quite regressive. But I cannot fault anyone for taking advantage of it-I sure will if I can. I have a few years into the program but my current job isn’t eligible. But my next one could be, and if it is, I’ll definitely go for forgiveness

Encourages bad behavior? Working in the public sector at the cost of a salary cut is a bad behavior?

 

[RangerBob]

What bad behaviors are we talking about?This is a population that have been employed, paying off their loans on time, and working in public service for at least a decade.

Encourages bad behavior? Working in the public sector at the cost of a salary cut is a bad behavior?

See Georgetown Law-they actively encourage their students to borrow the max so the government (ie. taxpayers—us!) can bail them out. It gives schools an excuse to raise tuition even more.

Also, public sector for many jobs that are eligible (particularly in medicine) can pay just as well as the private sector. I would’ve had a higher salary if I took the jobs offers I had from a county hospital or the VA. Public sector does not necessarily mean lousy salary.

The program should’ve/should be adjusted to reflect the population it’s meant to benefit-lower paid social workers, teachers, etc. there should be a maximum forgiveness amount to weed out professions from unfairly benefiting from the plan. A neurosurgeon does not need forgiveness on the taxpayer dime, but they benefit far more, in theory, than a pediatrician, whose residency is 4 years less. It would not be unrealistic to assume there are some surgeons out there who will only pay 2-3 years worth of higher IBR/PAYE payments before they get all their loans forgiven because they spend so much time in training.

 

[DysPDM]

.

The most glaring thing is that you can't tell if you're on track until you're at year 10, which is absolutely ridiculous. You should be able to query whether your payments (at one year or later) have been counting towards the 10 year requirement, and if not, you can either switch things (like which company you work for) or bail together (if your federal loans aren't the right type of federal loans)

In case it is helpful to know: I am currently enrolled in this program for a degree I completed in 2013. There is an option to re-certify, annually, that your current job continues to meet requirements for PSLF. In the reply that you receive (yes/no), the number of eligible payments you have already made is also reported. If one does not complete this optional recertification every year, then yes, there are no other confirmations before you apply at payment #120. But it is possible to obtain confirmation along the way (which was very useful in my case as I had caught an error they had made, which FedLoans promptly corrected).

 

[mvenus929]

I could argue several things against the program.
1. Why on Earth would the taxpayers give hundreds of thousands of dollars to people that have the potential to earn the top 1-5% of all Americans.
2. It encourages students to make bad decisions (go more into debt, and go into fields where they will be underpaid. Its ridiculous to encourage people to pay more for less return.
3. It encourages people to stay in debt longer than they should.

I think the whole student loan program needs to be revamped, but that is a separate issue.

I'd argue that it's an incentive to go into fields where they are 'underpaid' (not necessarily a bad decision), and thus promoting people going into the needed fields. Seems like that was the spirit of the program in the first place--people don't go into low paying fields because they have student loan debt to pay off, this helps pay off the debt. After all, someone needs to work in those fields...

I agree with your other points, though.

 

[Stagg737]

Like I've said for years, when you borrow money expect to pay every cent of that back plus interest. Hope for the best, but plan for the worst.

The program doesn't work because the current administration doesn't support it, not the other way around.

Neither did the previous administration. They actively tried to amend it as well and attempted to pass legislation to cap forgiveness at $59k total. This is a program with good intentions which extremely poor implementation, and there is no incentive for the gov to improve it as it would be a major financial sink to taxpayers and the gov which will largely aid individuals who shouldn't need it (ie physicians and other professionals).

I'd argue that it's an incentive to go into fields where they are 'underpaid' (not necessarily a bad decision), and thus promoting people going into the needed fields. Seems like that was the spirit of the program in the first place--people don't go into low paying fields because they have student loan debt to pay off, this helps pay off the debt. After all, someone needs to work in those fields...

I agree with your other points, though.

It was never meant to help physicians of any field in the first place. It was meant to help people pursuing careers like teachers or social workers who make low salaries get out of debt. Either way, it's a crap program that just puts a band-aid on the real problem which is skyrocketing tuition. If the gov really wanted to fix the problem they'd put caps on the tuition at public institutions instead of letting said institutions charge whatever they wanted and then putting the taxpayers on the hook for repayment.

 

[NITRAS]

Rescind it for physicians, sure. But the main beneficiaries of this program are social workers and teachers.

Even for teachers or social workers, what is the logic in encouraging people to go into debt to get a low paying jobs? It’s irrational.

 

[wholeheartedly]

Even for teachers or social workers, what is the logic in encouraging people to go into debt to get a low paying jobs? It’s irrational.

Because we need more people to be teachers and social workers and public health folks

 

[Stagg737]

Even for teachers or social workers, what is the logic in encouraging people to go into debt to get a low paying jobs? It’s irrational.

It's irrational on the individual level but a necessity in the societal level. This program was a (poor) attempt to reconcile the differences between individual and societal needs.