Student Loan Reform

[wannabeaDO]

Whoo HOO!

So I heard this loan reform thing is going to start in 2014.

Let say I graduate osteopathic school in 2014. Cost of Attendance is $80,000 a year. So that is $320,000 for for years plus lots of interest.

But with this new plan I only have to pay 10% of my income up to 20 years.

Let say I make $150,000 a year. This means I have to pay $15,000 a year for 20 years which is equals only $300,000.

This means I can even defer repayment during residency and still pay only $300,000.

Right?

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[NerdyAndrea]

I haven't seen this new reform......interesting

A

 

[tncekm]

Good for the bottom line of students? Probably in the short term. Good for the country/economy? Well, that might be a different story, and if the answer is no then that means it's also bad for students in the long term.

Think about it... now kids will rack up as much student debt as possible and not worry about it. VERY bad idea.

Who will subsidize it all (rhetorical question) and who will be left standing when student loan companies start going out of business (another rhetorical question)?

 

[Siggy]

[citation needed]

 

[wannabeaDO]

"Beginning in 2014, student loan payments under the income-based repayment plan will be capped at no more than 10 percent of a borrower’s discretionary income (the amount of adjusted gross income that exceeds 150 percent of the poverty line). Currently, payments are capped at 15 percent.
If people keep up their payments, any borrowed amount not paid after 20 years will be forgiven (down from the current 25 years). For public service workers (teachers, nurses, military personnel), debt is forgiven after 10 years."

http://www.boston.com/business/pers...1/for_students_a_healthy_dose_of_loan_reform/

 

[wannabeaDO]

Who will subsidize it all (rhetorical question) and who will be left standing when student loan companies start going out of business (another rhetorical question)?

"No longer will private lenders be middlemen in federal student loan transactions. As of July, all new federal loans will come directly from the US Department of Education."

 

[tncekm]

As an aside, why the HELLLLLLLLLLL do teachers and nurses get special treatment on this? 10 years and forgiveness? PHUCK THAT! ARgggghhh! I'm so sick of "big unions" getting special treatment!!!!!!!!!!!!!

 

[tncekm]

"No longer will private lenders be middlemen in federal student loan transactions. As of July, all new federal loans will come directly from the US Department of Education."

Yeah, that was obvious. And, that's why I said it was a rhetorical question.

 

[wannabeaDO]

Yeah, that was obvious. And, that's why I said it was a rhetorical question.

Just in case some people may not have seen Obama's loan reform.

 

[tncekm]

Just in case some people may not have seen Obama's loan reform.

Ha, ha... yeah, good call.

But, honestly, this is disastrous. People will have even more reason to be totally careless with their loan debt and the tax-payer will get stuck with the bill for some dumb kid who got a useless PhD at an expensive private school in a topic nobody cares about, however he/she pursued it because he/she finds it "interesting" despite having zero chance of ever making a living off of it.

 

[NerdyAndrea]

Since I get a Pell grant and some other grants this is good news. I am still dirt poor, but at least I'll have to take out a little less in loans.

There's always a trade off.

 

[DbDan]

Whoo HOO!

So I heard this loan reform thing is going to start in 2014.

Let say I graduate osteopathic school in 2014. Cost of Attendance is $80,000 a year. So that is $320,000 for for years plus lots of interest.

But with this new plan I only have to pay 10% of my income up to 20 years.

Let say I make $150,000 a year. This means I have to pay $15,000 a year for 20 years which is equals only $300,000.

This means I can even defer repayment during residency and still pay only $300,000.

Right?

From what it sounds like you are right. The more interesting thing is people who are in a long residency, see surgical specialties, etc. that are 7 years. If they begin repayment during residency then they have 13 years post-residency to continue paying back. Its also 10% of your adjusted gross, which is not the same as your base salary, its actually lower.

I plan on paying down my loans as quickly as possible if I can but this is definitely interesting and something I never read over in the bill

 

[tncekm]

I plan on paying down my loans as quickly as possible if I can but this is definitely interesting and something I never read over in the bill

Let me guess, it's making you want to run the numbers and see what costs less: paying your loan off fast or letting the tax payers float the bill? That's what I was considering... I can imagine that's going to be good for our country

 

[DbDan]

Let me guess, it's making you want to run the numbers and see what costs less: paying your loan off fast or letting the tax payers float the bill? That's what I was considering... I can imagine that's going to be good for our country

No I'd still rather have that extra 10% in my check as my pay increases.

To be completely honest, I have a feeling they will almost all likely get paid off. Even a primary care doctor is likely to be making more than 150k/yr by his 20th year in practice. Any specialty doctor is likely to be making significantly more than that. Even if a Dr. does general surgery and begins paying off during residency, which would equate to the least amount out of pocket you are looking at:

5 years at ~5k payments = 25k
15 years at ~20k payments (assuming 250k salary, which I believe is the ave for general surgery) = 300k

Also, CoA for most schools is less than 80k, Touro-NV was 77k with a 44k tuition and 33k living expenses and that seems fairly excessive.

 

[tncekm]

No I'd still rather have that extra 10% in my check as my pay increases.

To be completely honest, I have a feeling they will almost all likely get paid off. Even a primary care doctor is likely to be making more than 150k/yr by his 20th year in practice. Any specialty doctor is likely to be making significantly more than that. Even if a Dr. does general surgery and begins paying off during residency, which would equate to the least amount out of pocket you are looking at:

5 years at ~5k payments = 25k
15 years at ~20k payments (assuming 250k salary, which I believe is the ave for general surgery) = 300k

Also, CoA for most schools is less than 80k, Touro-NV was 77k with a 44k tuition and 33k living expenses and that seems fairly excessive.

Sure, doctors will pay off their loans. But, do you think that most people who majored in liberal arts, communications, or business at large private (or even some state) institutions will be able to pay off their loans? No way. They can rack up $150k in debt then make a measly $60k/yr, which after adjusted net income 150% above poverty line will be somewhere along the lines of a $300/month payment, which after 20 years will amount to $72,000. The result is tax payers needing to give that ONE person an additional $78,000 because their loan is forgiven after 20 years.

The only way this will work out int he long term is if the government starts dictating much of your education.

 

[DbDan]

Sure, doctors will pay off their loans. But, do you think that most people who majored in liberal arts, communications, or business at large private (or even some state) institutions will be able to pay off their loans? No way. They can rack up $150k in debt then make a measly $60k/yr, which after adjusted net income 150% above poverty line will be somewhere along the lines of a $300/month payment, which after 20 years will amount to $72,000. The result is tax payers needing to give that ONE person an additional $78,000 because their loan is forgiven after 20 years.

The only way this will work out int he long term is if the government starts dictating much of your education.

Or even "worse" I guess you could say is someone who goes to private university @ 50k a year and then gets a masters in Education and teaches high school or something similar. You are then looking at 300k debt with a 35k salary and a 10 year payoff. There is alot of flaws, i'm wondering how it will work out. From the standpoint of a doctor though it is likely the loans will be repaid.

 

[tncekm]

Or even "worse" I guess you could say is someone who goes to private university @ 50k a year and then gets a masters in Education and teaches high school or something similar. You are then looking at 300k debt with a 35k salary and a 10 year payoff. There is alot of flaws, i'm wondering how it will work out. From the standpoint of a doctor though it is likely the loans will be repaid.

Yeah, it's just another way for the politicians to redistribute wealth. Using socialism as a way of cementing their position of power. Steal from the minority (physicians who can actually pay back thier loans AND pay taxes to cover other people who cannot) and give to the masses of people who didn't chose their education wisely (e.g. if you get low compensation, attend a cheap school!!!!).

I really feel that this might be another massive disaster. I don't know how in the hell they suggest this will save any money at all.

 

[wannabeaDO]

I kind of don't understand the 150% above the poverty line thing? Can someone please explain?

 

[tncekm]

I kind of don't understand the 150% above the poverty line thing? Can someone please explain?

Lets say that you make $65k/yr. And, hypothetically, the poverty line for you would be $20k/yr. That means that 150% of that poverty line is $30k, meaning only $35k can be considered for the 10% max repayment. So, said person, despite making $65k/yr, would have a maximum monthly payment of $291. Stretch that out over 20yrs, and the maximum total repayment would be $69,840. I can't imagine many bachelors degrees cost only $69k after 20yrs of interest. The result will quite simply be more wealth redistribution to pay for the irresponsible.

 

[DbDan]

I kind of don't understand the 150% above the poverty line thing? Can someone please explain?

He did a much better job of explaining

 

[wannabeaDO]

Got it. Thanks!

 

[DOwnage]

So if docs, one of the few professions with the earning potential to actually pay off this large debt we all accumulate, actually pay off their loans over this period of time...sounds good. But people who majored in art history or something that doesn't really have a job on the other end of it (no offense to anyone in that major), how will any financier see any kind of sufficient return on that?

They would be making their money back from people with high paying jobs while losing money for people with lesser paying jobs. In order to actually make this work, they would have to continually raise interest rates on loans otherwise the financier would go out of business or if the government finances it, it turns into a giant money hole. I dont see any alternative where interest rates on student loans don't go up.

Sucks for the next generation of students...I hope to pay for my kids college so they don't have to be a slave to the government.

 

[tncekm]

So if docs, one of the few professions with the earning potential to actually pay off this large debt we all accumulate, actually pay off their loans over this period of time...sounds good. But people who majored in art history or something that doesn't really have a job on the other end of it (no offense to anyone in that major), how will any financier see any kind of sufficient return on that?

They would be making their money back from people with high paying jobs while losing money for people with lesser paying jobs. In order to actually make this work, they would have to continually raise interest rates on loans otherwise the financier would go out of business or if the government finances it, it turns into a giant money hole. I dont see any alternative where interest rates on student loans don't go up.

Sucks for the next generation of students...I hope to pay for my kids college so they don't have to be a slave to the government.

Sounds like you get it. So long as you start from the premise that the government does what it does only to create a more authoritarian state, it all makes sense.

 

[DOwnage]

Sounds like you get it. So long as you start from the premise that the government does what it does only to create a more authoritarian state, it all makes sense.

It's kind of sad when they can buy us off, since for many of us students, our first thoughts are "sweet! after 20 years I'm off the hook!" and we're on our merry little way. However, if you look at the overall societal consequences, it appears that whoever masterminded this didn't take a basic finance class.

 

[NerdyAndrea]

I hope a Biology degree can pay that I actually feel horrid making people pay for my education....I know I have grants and things that is all well received, and I appreciate. However I know when I was working before I paid into those programs, and want to work again so someone else has a chance.

I think about that kind of thing, and who is paying. I mean I will try for schlarships and National Health Service Corps, but I think those are pretty competitive and there are no guarantees. Even though I have 5k worth of grans for my semester I still have 10K in loans. I am at a small private school, and it's all federal loans.

I watch people like my parents suffer every time tere's a hike in taxes. Thelast thing I want is to totally be a cause of that hike in taxes.....

 

[tncekm]

It's kind of sad when they can buy us off, since for many of us students, our first thoughts are "sweet! after 20 years I'm off the hook!" and we're on our merry little way. However, if you look at the overall societal consequences, it appears that whoever masterminded this didn't take a basic finance class.

Yep... it's a sad reality. Spoiled kids can only think about themselves, and not the big picture.

@NerdyAndrea: I'm glad to hear that you're very considerate, but unfortunately you're in the minority. Hopefully that will change before it's too late!

 

[NerdyAndrea]

tneckm, if I didn't have to accept things that were gv't sposored in m life I wouldn't. I guess it's a lucky thing to need it badly enough to get it, but yeah, others I know get it. They come in and fail classes don't go to class, take courses 2 or 3 times. Heck the Indian tribe beareaus here pay for people full ride until they graduate. I knew a girl taking a course over for the fourth time. It didn't matter to her because it wasn't out of her pocket.

That irritates me. That was whenI was doing massage school. I worked 60 hours a week at that time and didn't qualify for aid it was all loans. I'd love to graduate well and go on to med school, finish and work in an underserved area. Then I'd actually tell people I got aid, and it was the best thing that happened to me. I'd also tell them I was proud of doing something I could actually pay it back with.

I don't know tneckm....maybe it's like the Milgram experience in the 60s. People don't see it, and so they can shock the person. Maybe part of the financial counseling at colleges should be showing the incoming people with grants, and schoarships, or federal loans the people who are working so hard to make their lives better. Maybe then it would hit home when they learn how high taxes are and better yet if thosee were the mentors for the students with aid. They could drive them and not let them flunk out, or help them through and wit a job search after.
Okay that's my tangent I get passionate aobut things someitmes LOL

A

 

[Bacchus]

Don't know if it's been said, but OP you can't defer during residency.

 

[DocHomer]

Whoo HOO!

So I heard this loan reform thing is going to start in 2014.

Let say I graduate osteopathic school in 2014. Cost of Attendance is $80,000 a year. So that is $320,000 for for years plus lots of interest.

But with this new plan I only have to pay 10% of my income up to 20 years.

Let say I make $150,000 a year. This means I have to pay $15,000 a year for 20 years which is equals only $300,000.

This means I can even defer repayment during residency and still pay only $300,000.

Right?

I was kind of taken back the other day when I heard about the terms of loan repayment under the new plan. I personally think someone has a moral obligation to repay debt, especially because this is taxpayer money. Apart from a few instances, like working in an underserved area, no one should get off the hook for willfully taking on debt.

Banks were getting paid to originate the loans, and the government would buy them afterward. The government would guarantee the the loans as well. Therefore, banks got all the upside without the risks. Although private companies will still service these loans on a fee per transaction basis, this plan does get rid of the middleman which I think makes a lot of sense. However, this stuff about not having to repay the entire loan doesn't make any fiscal sense. Plus, I don't think it's right to let people off the hook. There will be much less of an incentive to borrow wisely.

 

[cmfandjrb]

Or even "worse" I guess you could say is someone who goes to private university @ 50k a year and then gets a masters in Education and teaches high school or something similar. You are then looking at 300k debt with a 35k salary and a 10 year payoff. There is alot of flaws, i'm wondering how it will work out. From the standpoint of a doctor though it is likely the loans will be repaid.

I am in my 5th year of teaching and make 72K a year...people are making more money than some of you are assuming in your calculations.

And does their calculation take into account only the income of the person who took out the loan, or the household income? B/C a two income family is going to have an even higher adj gross income

 

[RELAX11]

Sorry to burst your bubble OP, if this hasn't already been discussed:


To get the 10% of income towards payments you have to be enrolled 2014 or later. So if you take out loans in 2013, 2012, 2011, etc, which you will if you graduate in 2014 you will fall on the previous student reform of 15% of income towards payments a year and over a period of 25 years not 20 years.

 

[RELAX11]

As an aside, why the HELLLLLLLLLLL do teachers and nurses get special treatment on this? 10 years and forgiveness? PHUCK THAT! ARgggghhh! I'm so sick of "big unions" getting special treatment!!!!!!!!!!!!!

EASY THRILLER.

Doctors also are included if you work for a nonprofit hospital. There are also a few other cases if the state deems the area underprivileged.

 

[Dr Skeptismo]

Okay everybody wait a minute, so let me get this straight. Are you all saying that this student loan reform which was piled into health care legislation to "save" $68 billion and make the health bill "deficit neutral" was really just a political gimmick that will inevitably cost the taxpayer money?!?!?!? Wait, so that means the politicians that put it in were either idiots, or liars trying to pull a fast one on the American people by taking a massive amount of financial power out of the private sector????

 

[RELAX11]

Wait, so that means the politicians that put it in were either idiots, or liars trying to pull a fast one on the American people by taking a massive amount of financial power out of the private sector????

OR YOU ARE FORGETTING OPTION C:


That you have a lot of upset right wing SDN members simply giving misinformation.


It is kind of ridiculous if you think about it, some people actually listen to these people and spread the news, kind of like FAUX news.


This reform was added in the health reform to make it budget neutral, not to increase debt and taxes for americans.


The money that is saved is from eliminating the middle man, the banks. This is massive amounts.


Now if right wingers want to argue that it is bad to get rid of the middle man, I would actually listen.


It is funny how people will push their agenda my telling complete lies.


And I am not interesting in making this a political debate, I won't respond if you do.

 

[AD28]

many of you are quite mistaken.

its 10% of ur income while you're qualified for income based repayment. if 10% of your income is greater than or equal to your monthly payments on a standard 10 year repayment plan, you do not qualify. thats means as physicians you will only qualify during residency. once you become an attending, your monthly payments will start to increase over the course of the loan repayment (back loaded interest) so that by the end of your 20 years of repayment you will probably be paying around 3.5k each month (assuming 300k in student loans). so in the long run, you're not going to "save" money from this. it's just going to be a lot easier to pay for it since your obligations up front are lower (when you make substantially less).

secondly, if you actually do the math... the government will actually MAKE money from this program in the form of interest payments that are stretched out over 2 decades instead of 1 decade or shorter. the longer you take to pay off your debts the more interest you pay. so most people with any financial acumen will take the IBR option during residency, then shift to a 10 year repayment plan to pay off the rest of their loans, otherwise a student loan debt of 300k can end up costing you more like 600k.

and yes it takes into account household income for the calculations. also, the reason teachers get special treatment is because generally they make so little compared to the cost of tuition.

so in conclusion, this doesnt really affect aspiring physicians. it is a boon to people in professions that make very little compared to the cost of their education, but by the end of their repayment periods, chances are there won't be too much savings. also these loans will be paid for via the cost savings from health care reforms. thats why the bills were linked and signed together.

 

[Dr Skeptismo]

RELAX11,
Could you first explain by what mechanism replacing banks as middle men with Uncle Sam as middle man will save money? After that, you could hopefully address how putting the taxpayer on the hook for these forgiven loans is sound fiscal policy? You could put your dismissive answer in one paragraph this time; I can handle it.

 

[Dr Skeptismo]

wrongggggg!

its 10% of ur income while you're qualified for income based repayment, which will only be during your residency. once you become an attending, your monthly payments will start to increase over the course of the loan repayment so that by the end of your 20 years of repayment you will probably be paying around 3k each month. so in the long run, you're not going to "save" money from this. it's just going to be a lot easier to pay for it since your obligations up front when you are making substantially less are lower.

secondly, if you actually do the math... the government will actually MAKE money from this program in the form of interest payments that are stretched out over 2 decades instead of 1 decade or shorter. the longer you take to pay off your debts the more interest you pay. so most people with any financial acumen will take the IBR option during residency, then shift to a 10 year repayment plan to pay off the rest of their loans, otherwise a student loan debt of 300k can end up costing you more like 600k

and yes it takes into account household income for the calculations.

If I'm going to have to pay the same amount back (X% of my income 10-20yrs) regardless of how much I borrow, where is the incentive to borrow as little as possible? If $300,000 costs me the same as $600,000, guess which one I'll take?

 

[RELAX11]

wrongggggg!

its 10% of ur income while you're qualified for income based repayment, which will only be during your residency. once you become an attending, your monthly payments will start to increase over the course of the loan repayment so that by the end of your 20 years of repayment you will probably be paying around 3k each month. so in the long run, you're not going to "save" money from this. it's just going to be a lot easier to pay for it since your obligations up front when you are making substantially less are lower.

secondly, if you actually do the math... the government will actually MAKE money from this program in the form of interest payments that are stretched out over 2 decades instead of 1 decade or shorter. the longer you take to pay off your debts the more interest you pay. so most people with any financial acumen will take the IBR option during residency, then shift to a 10 year repayment plan to pay off the rest of their loans, otherwise a student loan debt of 300k can end up costing you more like 600k

and yes it takes into account household income for the calculations.

Close, but still way off.

 

[RELAX11]

Could you first explain by what mechanism replacing banks as middle men with Uncle Sam as middle man will save money? After that, you could hopefully address how putting the taxpayer on the hook for these forgiven loans is sound fiscal policy? You could put your dismissive answer in one paragraph this time; I can handle it.

It is a little thing called: interest (edit: for private loans) and fees. No need to put the taxpayers on the hook for the loan reform alone, but when you bring in hc reform it is a diff story.


Didn't even need a paragraph.

 

[sandra1]

Could you first explain by what mechanism replacing banks as middle men with Uncle Sam as middle man will save money? After that, you could hopefully address how putting the taxpayer on the hook for these forgiven loans is sound fiscal policy? You could put your dismissive answer in one paragraph this time; I can handle it.

These loans have been always been backed by the federal government and taxpayers have always been on the hook. Before the reform, the private banks were just able to profit for administering the loans and all the risk was on the federal government and the taxpayer. The old system required an extra level of bureaucracy and was a giveaway to the banks since they had no risk. The banks did not create a more efficient system since the loans still went through the federal guarantee. By eliminating the "middle player" the federal government, the taxpayers and those obtaining loans cut out the profits that were going to the banks for unnecessary administrative costs.

 

[Siggy]

As an aside, why the HELLLLLLLLLLL do teachers and nurses get special treatment on this? 10 years and forgiveness? PHUCK THAT! ARgggghhh! I'm so sick of "big unions" getting special treatment!!!!!!!!!!!!!

I imagine that not all nurses are in public service and that there are physicians in public service.

 

[Dr Skeptismo]

It is a little thing called: interest. No need to put the taxpayers on the hook for the loan reform alone, but when you bring in hc reform it is a diff story.


Didn't even need a paragraph.

How about my $300,000 Art History PhD to teach finger painting to underserved students at a public school for 10 yrs. Does that factor into HC reform?

 

[AD28]

If I'm going to have to pay the same amount back (X% of my income 10-20yrs) regardless of how much I borrow, where is the incentive to borrow as little as possible? If $300,000 costs me the same as $600,000, guess which one I'll take?

i think you may have misunderstood my post. 300k will cost you 600k if paid over 20 years. 300k will only cost you 450k if paid over 10 years. and obviously the less you borrow the less you have to pay back?

@relax11, what am i still way off about?

 

[RELAX11]

How about my $300,000 Art History PhD to teach finger painting to underserved students at a public school for 10 yrs. Does that factor into HC reform?

That is a little extreme now hahaha, but plausible. Sure there are going to be people who take advantage of the system, it happens all the time not just for this reform. Still the money saved by eliminating the middle man will cover this abuse of the system. If this is found to be more common than what they expected that like anything the law will be amended. Also remember the govt has set programs which are considered "service." Lets not stretch this definition now. The student loan reform has nothing to do with healthcare, however without this loan reform the healthcare reform would not have been budget neutral, and there would be healthcare reform.

 

[Dr Skeptismo]

By eliminating the "middle player" the federal government, the taxpayers and those obtaining loans cut out the profits that were going to the banks for unnecessary administrative costs.

How does this eliminate the federal government? I'd argue government has admin costs, and without as strong a financial incentive to keep these costs low, these costs tend to be higher than in a company that can go bankrupt. I guess, my fundamental problem lies with guaranteeing/nationalizing what should be a personal risk. This reform just expands on that. Less incentives for fiscal responsibility when playing with other peoples' money, IMO.

 

[RELAX11]

@relax11, what am i still way off about?

I think you understand the foundation of the loan overhaul.

I think you fail to realize how much it could save aspiring physicians.

Sure for those going into higher paying specialties, the overhaul most likely won't help them.

Who it will help are the primary care specialities, which I believe was taken into strong consideration when writing the bill.

If you rack up 250-350K, which many do, and only earn 140K to start off, then you will save money, especially if you choose the 10 yr service program.

Remember, like others have mentioned, you can start this program at the beginning of your residency so by the time you are an attending you will already be 3-4 years into tho 20 or 25 years (depending on if you matriculated b4 or after 2014).

 

[AD28]

How does this eliminate the federal government? I'd argue government has admin costs, and without as strong a financial incentive to keep these costs low, these costs tend to be higher than in a company that can go bankrupt. I guess, my fundamental problem lies with guaranteeing/nationalizing what should be a personal risk. This reform just expands on that. Less incentives for fiscal responsibility when playing with other peoples' money, IMO.

the federal government is not being eliminated. you misread his post. if i rearrange the sentence like this maybe it'll be clear to you:

the federal government, the taxpayers, and those obtaining loans cut out the profits that were going to the banks for unnecessary administrative costs by eliminating the "middle player."

also, the government actually tends to be more efficient with administrative costs than the private sector. case in point - medicare.

 

[AD28]

I think you understand the foundation of the loan overhaul.

I think you fail to realize how much it could save aspiring physicians.

Sure for those going into higher paying specialties, the overhaul most likely won't help them.

Who it will help are the primary care specialities, which I believe was taken into strong consideration when writing the bill.

If you rack up 250-350K, which many do, and only earn 140K to start off, then you will save money, especially if you choose the 10 yr service program.

Remember, like others have mentioned, you can start this program at the beginning of your residency so by the time you are an attending you will already be 3-4 years into tho 20 or 25 years (depending on if you matriculated b4 or after 2014).

the reform itself reduces the payment duraction from 25 to 20 years and the percent of income from 15% to 10%. you're right that the loan forgiveness after 10 years can save aspiring physicians a lot, but that program has been in place for awhile so that's why i didn't mention it in the context of the reform, which is what this thread was addressing.

 

[RELAX11]

the reform itself reduces the payment duraction from 25 to 20 years and the percent of income from 15% to 10%. you're right that the loan forgiveness after 10 years can save aspiring physicians a lot, but that program has been in place for awhile so that's why i didn't mention it in the context of the reform, which is what this thread was addressing.

Yes, I am completely aware of this; if you would have actually read my previous posts on this thread.

The OP will graduate in 2014, thus all his/her loans are still going to be under the 15% and 25 years law rather than the new 10% and 20 years. That is why I am saying depending on if you matriculate b4 or after 2014, because 2014 and after you will be under the new reform.

 

[Dr Skeptismo]

That is a little extreme now hahaha, but plausible. Sure there are going to be people who take advantage of the system, it happens all the time not just for this reform. Still the money saved by eliminating the middle man will cover this abuse of the system. If this is found to be more common than what they expected that like anything the law will be amended.

I think the heart of our disagreement lies in the degree to which we think people will game the system. I'd argue it's human nature to take advantage of this program if the opportunity arises. This, along with any unanticipated consequences (further increases in tuition perhaps), make this a bad idea in my mind.

Also remember the govt has set programs which are considered "service." Lets not stretch this definition now. The student loan reform has nothing to do with healthcare, however without this loan reform the healthcare reform would not have been budget neutral, and there would be healthcare reform.

You should look up what's considered "service," you might be surprised. Pretty much all public (govt) employees are included, thus an underserved public school teacher would most definitely be covered. I wouldn't even consider it a stretch.