PSLF

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Strider_91 said:
I have no doubt that this program will cease to exist for physicians whether Betsy devos gets rid of it or not. Just wait until the first person making 250k/ year or more gets 300k in loans forgiven. People will go NUTS
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I mean, the first people who signed are due to have their loans forgiven this year. Stay tuned.
 
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So according to this article, we have Crooks trying to avoid paying hundreds of thousands of dollars owed to the federal government. You can't make this stuff up.
 
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At this point, all we can hope is they grandfather people in after they do away with the program.


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I have heard it said that signing your promissory note at a certain time when the program is in existence could be some substantial legal evidence that may (or may not) prompt the government to uphold the deal. This is the problem with government deals. Its like playing Monopoly against someone who can change the rules whenever they want. :pompous:
 
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This sucks for future students, but for those in school right now it's actually sort of a blessing. At least now we will know whether or not we will be grandfathered in.

There was no way this program was going to make it 10+ years from now with out being changed, so I would rather know now so that I don't rack up a s*** ton of interest just hoping for the best.
 
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Mr Medschool Money said:
I have heard it said that signing your promissory note at a certain time when the program is in existence could be some substantial legal evidence that may (or may not) prompt the government to uphold the deal. This is the problem with government deals. Its like playing Monopoly against someone who can change the rules whenever they want. :pompous:
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Yeah, but people can also sue the government, especially when there are gonna be thousands of lawyers with debt being directly screwed by this if they just up and took it away. I don't think the program will continue, but I do think people will be grandfathered in.
 
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I agree that this program is too good to continue, but they can't screw everyone over because "you should have known it was too good to be true." The program is specifically written into every MPN, so reneging on the deal would create the greatest class action lawsuit in history.

I gotta say though, I think a lot of schools followed this as a gravy-train to raise tuition. Now I feel hard pressed to pick a lower-paying specialty unless I want to do academia for 7+ years until forgiveness. This shouldn't be a consideration any med student should have to make.
 
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It's going to be an interesting Fall 2016 with how poor congress is at actually debating anything as the Democrats are worried about Russia and Trump is worried about himself. No-one thinks about the consequences of any actions we take. As with US healthcare in general all government is doing is trying to reduce costs to lower middle class individuals (through rebates, welfare, tax credit whatever you want to call it) rather than reducing the cost of the entire system whether it is tort reform, reducing the cost of administrators, and reducing monopolies. The government should regulate and encourage working for the common good but when they started this program they were seeing the first couple years of a higher rate of tuition increases. Public school tuition has kept to a relatively constant rate increase since around 2002 with private schools and out of state public schools seeing a larger rate increase.

I don't see a Trump Whitehouse wanting to spearhead a push to public schools being the choice for people to want to stay in public service since (despite the above costs) private schools are charging a lot more for the education. Apparently the private market isn't helping with cost reduction (much like seen in our healthcare system). Much like our healthcare system it is a monopolized system of schools giving education and insurance companies/hospital conglomerates negotiating rates. The physician (consumer of both education and the actual healthcare) is forgotten.
 
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tymont12 said:
I agree that this program is too good to continue, but they can't screw everyone over because "you should have known it was too good to be true." The program is specifically written into every MPN, so reneging on the deal would create the greatest class action lawsuit in history.

I gotta say though, I think a lot of schools followed this as a gravy-train to raise tuition. Now I feel hard pressed to pick a lower-paying specialty unless I want to do academia for 7+ years until forgiveness. This shouldn't be a consideration any med student should have to make.
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My guess is that this entire plan is going to put on the back burner until 2020. Once the data starts coming in 2018-2019, they're going to put the blame on Donald Trump. It's all politics from here.
 
What annoys me is that one of the arguments is doctors/lawyers/high income earners take advantage of it when it was meant more for people like social workers. With the debt we accrue today from ridiculous tuition hikes, with no reason to them, we should most definitely have this option available. As for the grandfathering, we have this signed in promissory notes guaranteeing it. What they can do though is end it and then put a cap on it, like Obama tried and failed to do. A cap of 50-60k would basically make it useless for me considering how much debt I have.


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I still don't understand why those idiots voted to un-subsidize federal loans in the first place. None of this would be a discussion if we still just had loans that defer accrual until graduation. Loans pretty manageable in that state. What could possibly have been more important in the budget than making sure this country has enough workers to treat sick people?
 
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UNMedGa said:
I still don't understand why those idiots voted to un-subsidize federal loans in the first place. None of this would be a discussion if we still just had loans that defer accrual until graduation. Loans pretty manageable in that state. What could possibly have been more important in the budget than making sure this country has enough workers to treat sick people?
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Obviously making sure this country has enough munitions to make healthy people in other countries dead.
 
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I'm an incoming MS1 who just signed my MPN and took out over 50k in loans for my first year.

Not too familiar with the situation with PSLF being done away with but will I be able to get PSLF since I just signed my MPN last week?
 
JPSmyth said:
I'm an incoming MS1 who just signed my MPN and took out over 50k in loans for my first year.

Not too familiar with the situation with PSLF being done away with but will I be able to get PSLF since I just signed my MPN last week?
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Ideally yes. Anyone who signed up for govt loans under the pretense that this program would exist for them to participate should be grandfathered in. In any normal contractual agreement, the loaner could not change the terms of the loan after it had been signed. That being said, the government can do whatever TF it wants. But I agree with the above posters that, should DeVoss succeed in removing this program, the largest class action lawsuit in recent memory would occur.
 
JPSmyth said:
I'm an incoming MS1 who just signed my MPN and took out over 50k in loans for my first year.

Not too familiar with the situation with PSLF being done away with but will I be able to get PSLF since I just signed my MPN last week?
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The easiest way to not allow you to participate is to change what meets the criteria for 'qualifying organization', as that is rather vague in the promissory notes I've read. After all, they've already said some people's payments over the past 10 years haven't counted.

But, I wouldn't count on you being able to do it. Make secondary plans now.
 
I'm by no means fluent in legaleese, but there's a line in the MPN that states "NOTE: Any amendment to the Act that affects the terms of this MPN will be applied to your loans in accordance with the effective date of the amendment."

Would that mean that any change they make to the terms of the MPN will be applied to our loans no matter when we signed the MPN? Or am I completely reading that wrong?

Sauce: Master Promissory Note: Federal Direct Stafford/Ford Loan, Federal Direct Unsubsidized Stafford/Ford Loan
 
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So basically the price of medical school is going to triple for those entering in 2018. That gap year to buff your application and retake that MCAT could cost you $600,000 compared to the class of 2021.

Ouch.

At many times in my career in medicine I have used the analogy of running along a bridge that is rapidly burning behind you. Next year the MCAT scores will be higher. Next year tuition will be higher. Next year Step 1 average will be higher. Next year more applicants will be applying for (insert specialty). I see my metaphor will continue to hold. But eliminating PSLF will be like a storage locker filled with barrels of gunpowder and gasoline on the bridge.
 
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sazerac said:
So basically the price of medical school is going to triple for those entering in 2018. That gap year to buff your application and retake that MCAT could cost you $600,000 compared to the class of 2021.
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This is really only true for people planning on using PSLF though, right? The financially savvy were most likely never going to use PSLF (unless they have an extreme debt/specialty income ratio). Most would be better off to follow the White Coat Investor counsel to:
1. Refinance loans ASAP
2. Live like a resident for 1-3 yrs post-residency
3. Pay off all loans
4. Enjoy the good life
 
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Lets also keep two things in mind:

1) Trump can't change PSLF--only Congress can. (And they likely will, though who knows if they'll stop short of Trump's proposal or take it even further)

2) If something does get enacted now and people are grandfathered in, it's still possible once the first people start receiving PSLF, that Congress will go back and change things further. We'll likely see forgiveness start occurring in Dec/January at the earliest--I think Oct is the earliest anyone can have made 120 payments by, and if it takes 2 months to process a REPAYE application it'll surely take at least one more to process a half million dollar loan forgiveness)

I agree with the above advice. No one should be planning for/counting on PSLF. It'll sure be a nice windfall if it sticks around, but now two presidents have proposed either severely capping (Obama) or eliminating (Trump) the program. That says a lot about how politicians are viewing the program.
 
sazerac said:
So according to this article, we have Crooks trying to avoid paying hundreds of thousands of dollars owed to the federal government. You can't make this stuff up.
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Wut? Taking advantage of a stupid/flawed law/policy doesnt make somebody a crook. Do you consider billionaires who hire the best accountants/lawyers to pay the least amount of taxes possible crooks?
 
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Does anyone know what does the July 1, 2018 date mean for current students right now? Legit info cross checked by legal counsel would be much appreciated here.
 
CleganeBowlis4Real said:
So basically everyone posting in this thread is good. I have to admit I am surprised. I thought for sure they would make all changes retroactive.
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Does this mean that all current students are grandfathered into public service loan forgiveness even if our graduation date is 2019, 2020, or 2021?
 
68PGunner said:
Does anyone know what does the July 1, 2018 date mean for current students right now? Legit info cross checked by legal counsel would be much appreciated here.
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The text states that the proposal applies to loans originated on or after that date except for loans provided to borrowers to finish their current course of study. That is non-legalese plain speak. If you are a new student and your loan originates after July 1, 2018, no PSLF for you. If you are already in school and have loans already, the loans you get to finish medical school will still fall under PSLF. Of course you can't count on anything until the final bill actually is signed however.
 
LucidSplash said:
The text states that the proposal applies to loans originated on or after that date except for loans provided to borrowers to finish their current course of study. That is non-legalese plain speak. If you are a new student and your loan originates after July 1, 2018, no PSLF for you. If you are already in school and have loans already, the loans you get to finish medical school will still fall under PSLF. Of course you can't count on anything until the final bill actually is signed however.
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Here's the deal. Every year, we have to apply for new loans to pay the annual tuition and COL. So, let's say that you're a 3rd or a 4th year in 2018. You're taking out loans for 2018-2019. The loan date for those will be like 7/28/2018. Do those loans also qualify for PSLF? Has there a precedent for this kind of thing?
 
One thing that I'm very positive about this is that current students or workers will be grandfathered into the system since PSLF is quoted in every PMNs out there.
 
68PGunner said:
Here's the deal. Every year, we have to apply for new loans to pay the annual tuition and COL. So, let's say that you're a 3rd or a 4th year in 2018. You're taking out loans for 2018-2019. The loan date for those will be like 7/28/2018. Do those loans also qualify for PSLF? Has there a precedent for this kind of thing?
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You'll be taking out loans to finish a course of study for which you originated loans prior to 7/1/18. So according to this specific proposal, your new loans would still fall under PSLF.

There's no precedent for PSLF, it hasn't been around that long. But basically they can change the rules anytime they like as long as they don't violate the terms of the original promissory note. PSLF is a repayment program and is not part of the original promissory.
 
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Elessar said:
This is really only true for people planning on using PSLF though, right? The financially savvy were most likely never going to use PSLF (unless they have an extreme debt/specialty income ratio). Most would be better off to follow the White Coat Investor counsel to:
1. Refinance loans ASAP
2. Live like a resident for 1-3 yrs post-residency
3. Pay off all loans
4. Enjoy the good life
Click to expand...

People with long residencies/fellowships can benefit especially if planning already on doing academics or working in a relatively lower reimbursed specialty. Yes it's different for everyone and one should take into account their specific situation. There's so many repayment plans now at so many different stages depending if they have subsidized loans vs unsub, PAYE, IBR, and now REPAYE. Even public med schools these days with undergrad not being in the picture isn't cheap. For example, someone with an AGI of 220k and 225k loan balance when finishing residency will take 10 years in the standard repayment plan to pay it off at around 2500 a month coming to 312k total paid. Someone who knows they want to work in private practice and not go with PSLF can refinance with a private company to lower the interest and end up paying more on the loan towards the principal and finishing repayment sooner.

Someone that completed a 6 year residency they would only have to make 4 years of payments post residency if working for a nonprofit at a total of 112.5k though payments during residency in IBR would depend on family size and this keeps the first year out of training (9 months) your payments are actually of the previous year level. On the high end if you are single with around a 43k AGI with payments of 300 a month during residency that comes out to 21.6k so total payment under IBR (at worst) is 134k.
 
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