PSLF - What You Can Do for Your Country Act

[Monsterdaddy]

See article: "New bill would end 'bureaucratic nightmare' for Public Service Loan Forgiveness program"

The proposed bill doesn't expand who is eligible and doesn't help address tuition inflation. But it does allow for 50% forgiveness at 5 years while expanding qualifying payments to ANY repayment plan.

The 50% after 5 years sounds like a great deal for doctors - after 4 years of residency +1 year they are free to pursue private practice.

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[DondeEstaElBano]

See article: "New bill would end 'bureaucratic nightmare' for Public Service Loan Forgiveness program"

The proposed bill doesn't expand who is eligible and doesn't help address tuition inflation. But it does allow for 50% forgiveness at 5 years while expanding qualifying payments to ANY repayment plan.

The 50% after 5 years sounds like a great deal for doctors - after 4 years of residency +1 year they are free to pursue private practice.

Dear god let this be retroactive! 6 years of payments while active duty and still chipping away.

 

[Sine Cura]

Less than 0.5% of applications were approved and loans discharged, not that less than 1% of eligible applicants got loans discharged

https://studentaid.ed.gov/sa/about/data-center/student/loan-forgiveness/pslf-data

Maybe these applicants should lrn2read if their financial livelihoods are at stake

 

[gwarm01]

From the article:
Additionally, PSLF participants could ask that half of their loans be forgiven at five years, with their remaining loans forgiven at the end of 10 years, under the bill.

That sounds like one hell of a deal.

 

[mentos]

Here's what you can do for your country, how about paying for the loans you decided to borrow and take the burden off of us taxpayers?

 

[sakigt]

They did the same thing in 2010, forgave billions on home debt, and then didn't tax people on the amount written off."

As someone who is paying theirs back early I get it, but the fact is this is a huge strain on our economy. And personally Ive so far paid $170k to borrow $100k and still owe $60k. Huh what?

 

[lord999]

Less than 0.5% of applications were approved and loans discharged, not that less than 1% of eligible applicants got loans discharged

https://studentaid.ed.gov/sa/about/data-center/student/loan-forgiveness/pslf-data

Maybe these applicants should lrn2read if their financial livelihoods are at stake

I disagree with certain scenarios in that. VA actually is quite angry with SallieMae for older loans because they gave incorrect advice to the loan recipients (and we have the communications in writing to the loan recipient). It's actually something that Policy is having to fix. For quite a number of veterans, they were specifically misled on the combination benefits.

 

[gwarm01]

Here's what you can do for your country, how about paying for the loans you decided to borrow and take the burden off of us taxpayers?

I don't see this as being any different than taking tax credits, or using tax advantaged investment accounts. These laws exist to encourage a certain type of behavior, so why not take advantage of it if you qualify?

 

[mentos]

I don't see this as being any different than taking tax credits, or using tax advantaged investment accounts. These laws exist to encourage a certain type of behavior, so why not take advantage of it if you qualify?

Tax advantaged investment encourages responsibility. Student loan forgiveness encourages what, taking handouts?

 

[BC_89]

Kaine told the attendees at the ABA Day gathering that the bill would “simplify the PSLF process and ensure the administration provides our public servants the forgiveness they deserve.”

I do appreciate any effort to help ease student loan finances of 501(c)3 - public service employees, but wouldn't the headaches be easily lifted if we put a cap on federal loans from all public universities in both undergrad and grad plus loan offers? That would have to force the tuition down while simultaneously shutting down specific start-up or for-profit programs. As long as students can do basic math and stay away from private lenders I think that'd be much easier than different proposals being amended - changed - denied - reinstated - and - around - around - we - go...

 

[BMBiology]

I don't see this as being any different than taking tax credits, or using tax advantaged investment accounts. These laws exist to encourage a certain type of behavior, so why not take advantage of it if you qualify?

Unlike 401 k, this “opportunity” is not opened to everyone.

I doubt it would pass under a republican controlled senate.

 

[gwarm01]

Tax advantaged investment encourages responsibility. Student loan forgiveness encourages what, taking handouts?

The intention is to encourage people to work for government agencies or non-profits, which tend to pay less than other types of positions. The value of that may be up for debate, but I would encourage anyone who is eligible to take advantage of the plan.

Unlike 401 k, this “opportunity” is not opened to everyone.

I doubt it would pass under a republican controlled senate.

It's available to anyone who chooses to work for a qualified employer, just like tax credits are available to people who choose to have children.

I agree that it doesn't stand much of a chance. Not a single Republican senator is co-sponsoring it. It's probably just posturing for the upcoming election, as I see Bernie and Elizabeth Warren are both on board.

 

[BMBiology]

The intention is to encourage people to work for government agencies or non-profits, which tend to pay less than other types of positions. The value of that may be up for debate, but I would encourage anyone who is eligible to take advantage of the plan.

First, Kaiser is “non-profit” and they pay their pharmacists very well. It is probably one of the most desirable places to work.

Second, why is my work not as important as someone who works at a non public or public institution?

This was a poorly planned law. I am sure it was pushed by special interest groups. Tuition went thru the roof. Who cares if you have $50 k or $500 k in student loans when the government is going to forgive all of it anyways?

 

[GrandTheftAutumn]

The intention is to encourage people to work for government agencies or non-profits, which tend to pay less than other types of positions. The value of that may be up for debate, but I would encourage anyone who is eligible to take advantage of the plan.



It's available to anyone who chooses to work for a qualified employer, just like tax credits are available to people who choose to have children.

I agree that it doesn't stand much of a chance. Not a single Republican senator is co-sponsoring it. It's probably just posturing for the upcoming election, as I see Bernie and Elizabeth Warren are both on board.

Modest Anteater: Having children is not a choice for some people. It requires having a mate, which can be a huge barrier.

Don't worry, I'm on the same boat.

 

[gwarm01]

First, Kaiser is “non-profit” and they pay their pharmacists very well. It is probably one of the most desirable places to work.

Second, why is my work not as important as someone who works at a non public or public institution?

This was a poorly planned law. I am sure it was pushed by special interest groups. Tuition went thru the roof. Who cares if you have $50 k or $500 k in student loans when the government is going to forgive all of it anyways?

I'm not sure why you're trying to argue with me over this because I've never made any of those claims. My stance is 100% "smoke 'em if you got 'em."
I will say that those Kaiser pharmacists are pretty lucky to have amazing salaries and qualify for a program like this.

 

[mentos]

The intention is to encourage people to work for government agencies or non-profits, which tend to pay less than other types of positions. The value of that may be up for debate, but I would encourage anyone who is eligible to take advantage of the plan.



It's available to anyone who chooses to work for a qualified employer, just like tax credits are available to people who choose to have children.

I agree that it doesn't stand much of a chance. Not a single Republican senator is co-sponsoring it. It's probably just posturing for the upcoming election, as I see Bernie and Elizabeth Warren are both on board.

A 2k tax credit for a child is a far cry from a 6 figure student loan bailout. If they gave refunds to those of us who paid off our loans then that would be fair, of course that's not going to happen.

 

[sakigt]

A 2k tax credit for a child is a far cry from a 6 figure student loan bailout. If they gave refunds to those of us who paid off our loans then that would be fair, of course that's not going to happen.

That's because they don't make money off people who pay off their loans.

 

[confettiflyer]

I don't see this as being any different than taking tax credits, or using tax advantaged investment accounts. These laws exist to encourage a certain type of behavior, so why not take advantage of it if you qualify?

People are salty because it incentivized overborrowing with a lower/equivalent eventual net cost than someone who borrowed less (“more prudent”)

But yeah agree, this program was known in 2007 when it launched, people should have considered it.

 

[Monsterdaddy]

Basically, if you expect forgiveness you should maximize your borrowing otherwise you are just leaving money on the table. There are also a number of ways to significantly reduce your loan payments, sometimes to zero....

All of the above mechanics really are similar to taxpayers minimizing tax liability. The only difference is perception and probably the rather large dollar six figure benefits of "gaming" student loans vs. taxes. Put in another way, just substitute people saying, "Pay your loans!" with "Pay your taxes!"

That said, I do think there should be legislation to address the various loopholes and to discourage schools from continually raising tuition well above inflation rates. For example, (as I said before) loans for living expenses should never be forgiven, spousal income should always be included (i.e. kill PAYE), 401(k) contributions should not reduce loan payments, etc.

 

[Sine Cura]

Maximize moral hazard, minimize tax liability. Absolute degeneracy.

 

[confettiflyer]

I figure I pay so much in federal taxes, I’m going to dip into the PSLF trough guilt-free. The total payments for my 10 years will be just under the total principal balance I took out.

Plus, loopholes will always be present. If you can write and pass and airtight law, you should be a lobbyist and make $$ punching holes in legislation.

I had seriously considered starting a 501(c)3 company that provided online pharmacy advice that hired retail pharmacists for 30/hrs a week work-at-home. A recurring $5,000 tax deductible donation annually 10 years would be reasonable with 100 on staff, that would cover overhead and a modest salary for me.

Got too busy to do it. I’m sure one of you can do it!

 

[NITRAS]

Basically, if you expect forgiveness you should maximize your borrowing otherwise you are just leaving money on the table. There are also a number of ways to significantly reduce your loan payments, sometimes to zero....

All of the above mechanics really are similar to taxpayers minimizing tax liability. The only difference is perception and probably the rather large dollar six figure benefits of "gaming" student loans vs. taxes. Put in another way, just substitute people saying, "Pay your loans!" with "Pay your taxes!"

That said, I do think there should be legislation to address the various loopholes and to discourage schools from continually raising tuition well above inflation rates. For example, (as I said before) loans for living expenses should never be forgiven, spousal income should always be included (i.e. kill PAYE), 401(k) contributions should not reduce loan payments, etc.

PSLF encourages several bad behavior.
1. Willing to borrow more, which leads to higher tuition inflation
2. Increasing risk in people's lives with non-bankrupt-able debt.
3. Encouraging people to make less money/significantly limit career choices. Loosing out on $50k a year for ten years is half a million in lost income. That's less taxes.
4. Encourage dependence on the government.

I find it morally fine to pay as little as taxes are allowed by law. The government is the least efficient way to do anything. I use tax advantages retirement accounts because they make sense. The government will get their taxes on all monies in IRAs, 401ks, eventually.

 

[BMBiology]

Encouraging people to save for retirement thru tax advantage accounts like 401 k is a good thing.

Encouraging people to borrow to the max for a worthless college degree is a bad thing.

So stop trying to justify PSLF. I also wouldn’t get too excited...the government might just put restriction on how much loan is forgiven based on income.

The vast majority of Americans don’t even have a college degree and you expect them to just stand there and let the government forgive > $100,000 to doctors, pharmacists and dentists?

 

[steveysmith54]

https://www.google.com/amp/s/www.foxnews.com/politics/warrens-massive-640-billion-student-loan-cancellation-questioned-over-fairness-to-students-who-paid-off-their-debts.amp

Looks she wants to cap the forgiveness based on current income

 

[BC_89]

https://www.google.com/amp/s/www.foxnews.com/politics/warrens-massive-640-billion-student-loan-cancellation-questioned-over-fairness-to-students-who-paid-off-their-debts.amp

Looks she wants to cap the forgiveness based on current income

She claims that the cost of the policy, in addition to her proposed universal free college, would be “be more than covered by my Ultra-Millionaire Tax -- a 2% annual tax on the 75,000 families with $50 million or more in wealth.”

Interesting: Tax the top % to cover everyone else.

I'm all for people working in underserved regions or give military service in exchange for education coverage, but something doesn't sit right allowing students to get the opportunity to max out loans, tuck away the difference in a bank account, and move on with others paying the bill...

 

[BMBiology]

She claims that the cost of the policy, in addition to her proposed universal free college, would be “be more than covered by my Ultra-Millionaire Tax -- a 2% annual tax on the 75,000 families with $50 million or more in wealth.”

Interesting: Tax the top % to cover everyone else...

Most rich people will find a way not to pay this tax and the middle class will end up holding the bag.

 

[steveysmith54]

She claims that the cost of the policy, in addition to her proposed universal free college, would be “be more than covered by my Ultra-Millionaire Tax -- a 2% annual tax on the 75,000 families with $50 million or more in wealth.”

Interesting: Tax the top % to cover everyone else.

I'm all for people working in underserved regions or give military service in exchange for education coverage, but something doesn't sit right allowing students to get the opportunity to max out loans, tuck away the difference in a bank account, and move on with others paying the bill...

I think the intriguing aspect of her form of forgiveness is that caps out at 50k, even lower depending on your income . So I am new grad Rph, I took out 300k, so less than 20 percent of it is forgiven, does that mean that I have a to be responsible and pay the balance? What raw deal that is!

 

[PharmtoCS]

You still pay taxes on tax advantaged accounts. The difference is that you pay the tax when you withdraw from your account instead of upfront.

 

[owlegrad]

Encouraging people to save for retirement thru tax advantage accounts like 401 k is a good thing.

Encouraging people to borrow to the max for a worthless college degree is a bad thing.

So stop trying to justify PSLF. I also wouldn’t get too excited...the government might just put restriction on how much loan is forgiven based on income.

The vast majority of Americans don’t even have a college degree and you expect them to just stand there and let the government forgive > $100,000 to doctors, pharmacists and dentists?

Some people might frame it as being good to encourage people to pursue higher education as well as work for nonprofits.

Cynical people might think you are being disingenuous with how you decide what is good and what is bad. The thing you want to do (save on taxes) is "good", the thing that won't benefit you (loan forgiveness) is "bad". Interesting, that. Society benefits from an educated populous so really anything that encourages people to be educated should probably fall under the banner of "good".

The idea of capping loan forgiveness based on income might have merit but do you really want to encourage people to obtain worthless degrees so they can be forgiven vs degrees with value such as medical or dental? The laws of unintended consequences can be tricky. I would much rather forgive the debt on a degree that has value to society such as a medical degree rather than say a PhD in art history.

 

[NITRAS]

Higher education has no value other than to create income. Otherwise, it’s a luxury.

Nothing morally superior about working for a non-profit. Especially if you are doing the same work.

 

[confettiflyer]

I think the intriguing aspect of her form of forgiveness is that caps out at 50k, even lower depending on your income . So I am new grad Rph, I took out 300k, so less than 20 percent of it is forgiven, does that mean that I have a to be responsible and pay the balance? What raw deal that is!

From a policy perspective, her idea makes more sense, since it’s the incomplete degrees and loan balances sub-50k for a large portion of the US that’s causing all this constrained spending and pain.

It’s also a great way to come off as an ultra left wing liberal and lose a presidential election, IMO. The Obama “spread it around” quote of 2019, if you will.

 

[confettiflyer]

Test

 

[confettiflyer]

Some people might frame it as being good to encourage people to pursue higher education as well as work for nonprofits.

Cynical people might think you are being disingenuous with how you decide what is good and what is bad. The thing you want to do (save on taxes) is "good", the thing that won't benefit you (loan forgiveness) is "bad". Interesting, that. Society benefits from an educated populous so really anything that encourages people to be educated should probably fall under the banner of "good".

True, but I would have gone to pharmacy school anyway and would have likely obtained a fair rate on private loans either during or after school (via refinance).

I was educated enough to participate in society with a subsidized state undergraduate education.

It’s like tax rebates for solar panels in a sunny state, I would have likely bought them without the rebate anyway.

Given a) the private market solutions available for high income career paths, and b) available subsidies for undergraduate education, why should graduate education be government subsidized or supported at all?

I’m starting to think no, I really don’t think the added value to society is worth it. I was an educated voter and productive member of society before pharmacy school, society would have gotten my added income tax anyway without PSLF/grad loans.

My elegant solution would be to make standard a 10% of income x 10 years repayment with private lenders and collateralize/partially guarantee the debt like with a Fannie-like entity. Basically would kick in during mass recessions.

 

[mentos]

I think the intriguing aspect of her form of forgiveness is that caps out at 50k, even lower depending on your income . So I am new grad Rph, I took out 300k, so less than 20 percent of it is forgiven, does that mean that I have a to be responsible and pay the balance? What raw deal that is!

You should be responsible to pay back whatever you decided to borrow. It's not our problem if you decided to take out 300k. Can my mortgage be forgiven too? How about I buy a Bentley, can that be forgiven? The government will only forgive 50k of my vacation home? Terrible deal!

 

[allantois]

I doubt the GOP would bring up this bill up for a vote. There isn’t a single Republican co-sponsor

 

[confettiflyer]

You should be responsible to pay back whatever you decided to borrow. It's not our problem if you decided to take out 300k. Can my mortgage be forgiven too? How about I buy a Bentley, can that be forgiven? The government will only forgive 50k of my vacation home? Terrible deal!

Yes, your mortgage can be forgiven if you live in a “one action state” for foreclosure proceedings.

Yes, Bentley can be repossessed and the deficiency discharged in bankruptcy or float as an unsecured debt until the statute of limitations runs out.

Yes, it’s your problem I took out 500k, because the lender is the government and last I checked we’re a government by the people, etc etc... same reason all those upside down Fannie Mae loans are the government’s problem, lol.

 

[confettiflyer]

I doubt the GOP would bring up this bill up for a vote. There isn’t a single Republican co-sponsor

Yeah, it won’t pass... but people forget PSLF was signed into law by a republican. I had a good laugh when people would blame Obama for it.

 

[mustang sally]

I figure I pay so much in federal taxes, I’m going to dip into the PSLF trough guilt-free. The total payments for my 10 years will be just under the total principal balance I took out.

Exactly. By the time I make it to 10 years on PSLF, I will have basically paid close to the balance of the loan. It's the interest that makes it so difficult to pay off. Maybe we should have more reasonable interest rates on student loans.

 

[BMBiology]

Some people might frame it as being good to encourage people to pursue higher education as well as work for nonprofits.

Cynical people might think you are being disingenuous with how you decide what is good and what is bad. The thing you want to do (save on taxes) is "good", the thing that won't benefit you (loan forgiveness) is "bad". Interesting, that. Society benefits from an educated populous so really anything that encourages people to be educated should probably fall under the banner of "good".

The idea of capping loan forgiveness based on income might have merit but do you really want to encourage people to obtain worthless degrees so they can be forgiven vs degrees with value such as medical or dental? The laws of unintended consequences can be tricky. I would much rather forgive the debt on a degree that has value to society such as a medical degree rather than say a PhD in art history.

We need to stop forcing students to take classes they don’t care for just so they can get a piece of paper. Not everyone should go to college. There is virtually nothing you can learn on your own nowadays.

Let’s stop pretending that college has been working. It has not. It is not only a waste of time, but it is also a waste of capital for a significant number of students.

 

[steveysmith54]

You should be responsible to pay back whatever you decided to borrow. It's not our problem if you decided to take out 300k. Can my mortgage be forgiven too? How about I buy a Bentley, can that be forgiven? The government will only forgive 50k of my vacation home? Terrible deal!

I ageee with your points. From the looks of it, this bill will hurt people who have borrowed ungodly amounts of money, like 300k plus (currently the cost of Tuition plus room and board for pharmacy schools in CA). I don’t know if this plan would make income based repayment plans obsolete, such as PAYE, which currently have given students hope of tax free forgiveness (I emphasize the word “hope”, as it is still undecided). As stated before being on the hook for 250k in debt, residing in CA, with 24 hrs a week on reduced new grad salary, would leave one to be essentially “screwed”.

Obviously, the interest rates and tuition is what should be addressed before any forgiveness talks commence

 

[gwarm01]

Exactly. By the time I make it to 10 years on PSLF, I will have basically paid close to the balance of the loan. It's the interest that makes it so difficult to pay off. Maybe we should have more reasonable interest rates on student loans.

No kidding. I forget the exactly when it happened, but the interest rate was jacked up immensely. My early undergrad loans had interest rates in the 2-3% range, while my later loans (including my gigantic pharmacy loans) are all in the 6-7% range.

Oh well, these things are on auto-debit. Eventually my checking account will start getting a big boost each month.

 

[confettiflyer]

I’m gonna bet $5 this ends up in the same garbage heap as the Rubio/Warner Dynamic Repayment Act.