Three MORE months of student loan relief!

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Yea dude that’s what I said... Benyay...

And I think it’s actually pronounced - Bengay... or is it two words? Ben Gay?

I need to bring out the sarcasm tag again

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2. 10-25 years is a long time, and political winds can change. . . so can your forgiveness.
3. People warp their lives to get forgiveness, rather than be successful. (ie. if you lost $50k a year to work a non-profit, then forgiveness cost you $500,000)


This whole "stimulus" thing is similar to Caesar throwing bread to the masses to keep them pacified. It didn't exactly work out well for the Romans. . . . .

Wonder if we can get a coliseum to hold these political rallies.

To wit:

1) When was the last time there was a proposal to retroactively revoke PSLF? Never. Even the most conservative proposal put forward calls for grandfathering. I suppose that can change, but that’s like saying it’s possible to be annihilated by an asteroid tomorrow. Plus, PSLF was born from a republican president and is not part of annual congressional appropriations.

2) Agreed - which is why I’d only go into this when non-profit work pays more than for-profit work, which is the norm vs exception in pharmacy (California at least)

3) The US will fall eventually, this is why people of means keep one foot out the door.
 
To wit:

1) When was the last time there was a proposal to retroactively revoke PSLF? Never. Even the most conservative proposal put forward calls for grandfathering. I suppose that can change, but that’s like saying it’s possible to be annihilated by an asteroid tomorrow. Plus, PSLF was born from a republican president and is not part of annual congressional appropriations.

I'm not good at predicting the future, but there is so much crazy stuff going on. I don't think anything should surprise me. A few millionaire physicians who get half million dollar debts erased by PSLF in the news could change it in a heart beat. Until the debt is forgiven, you still have the risk. Which is why you should treat student loan debt as any consumer debt.
 
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3. People warp their lives to get forgiveness, rather than be successful. (ie. if you lost $50k a year to work a non-profit, then forgiveness cost you $500,000)
Your thinking is wrong on this point. This was the whole reason PSLF was passed by bipartisan votes in the first place in 2007 -- to encourage new grads to NOT pursue more lucrative careers and work in public and non-profit sectors. Not everyone just wants to make money. Nothing wrong with wanting to work for the government or a non-profit but new grads with high loan payments were shunning these sectors because they couldn't afford it.

And guess what? It worked mostly as planned. Even physicians who may eventually go private practice and make mint still spent 3-6 extra years in the non-profit/public sector.

Not saying PSLF couldn't be improved. I for one have advocated for years that any loans for living expenses NOT be forgiveable (heck, everyone has living expenses whether they went to school or not). And to keep schools from upping tuition to the sky, I think only a percentage of the loans above a certain limit should be forgiveable, the higher the tuition, the lower the forgiveness.
 
I agree about PSLF changes, my thoughts:

1) 12 years for full forgiveness, not 10.
2) 25% of debt forgiven in equal 3 year tranches (or 33.33% per 4 years) not the all-or-nothing game we have now.
3) Total lifetime maximum forgiveness is limited to $250,000 pegged to inflation

Personal opinion: all student loans should be based off the 10yr treasury bill, aka the actual cost of financing.

For non-PSLF: 15yrs for undergraduate and 20 years for graduates.


Way out there idea: let people pay 3.5% of income for LIFE (student loan is just never forgiven, ever).

A pharmacist making $150,000 a year, minus a $25k expenses deduction, would pay $364.58/mo in present dollars. A 40 year career would yield $175,000 in total payment (present dollars).
 
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I agree about PSLF changes, my thoughts:

1) 12 years for full forgiveness, not 10.
2) 25% of debt forgiven in equal 3 year tranches (or 33.33% per 4 years) not the all-or-nothing game we have now.
3) Total lifetime maximum forgiveness is limited to $250,000 pegged to inflation

Personal opinion: all student loans should be based off the 10yr treasury bill, aka the actual cost of financing.

For non-PSLF: 15yrs for undergraduate and 20 years for graduates.


Way out there idea: let people pay 3.5% of income for LIFE (student loan is just never forgiven, ever).

A pharmacist making $150,000 a year, minus a $25k expenses deduction, would pay $364.58/mo in present dollars. A 40 year career would yield $175,000 in total payment (present dollars).
This is so logical that it could never happen.
 
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@confettiflyer , always need new ideas but I think your ideas don't address the two major problems; 1) moral hazard of borrowing the maximum and spending all you want; and 2) the tuition gouging by the schools.

I would propose a new loan class, let's call it for fun GradMinus loans which are never forgivable. Anything for living expenses has to be borrowed on GradMinus. For schools that charge too much tuition (and that is a scheme that needs to be worked out), some portion can be GradPlus starting at 90% and the remainder is GradMinus, and the GradPlus goes down 10% each tranche until it hits zero and everything is now unforgivable GradMinus loans. So students may finally balk at tuition gouging.
 
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@confettiflyer , always need new ideas but I think your ideas don't address the two major problems; 1) moral hazard of borrowing the maximum and spending all you want; and 2) the tuition gouging by the schools.

I would propose a new loan class, let's call it for fun GradMinus loans which are never forgivable. Anything for living expenses has to be borrowed on GradMinus. For schools that charge too much tuition (and that is a scheme that needs to be worked out), some portion can be GradPlus starting at 90% and the remainder is GradMinus, and the GradPlus goes down 10% each tranche until it hits zero and everything is now unforgivable GradMinus loans. So students may finally balk at tuition gouging.

I know, and I agree my idea doesn’t address moral hazard.

And in other news, Biden just floated his plan. Looks like 5% PSLF and $10k/yr x 5 years student loan forgiveness is now out in the ether.
 
Is there a chance there could be a total wipe out of the loans? I am also holding off payments as I would hate to pay off my loans and then find out the loans are for given for everyone else. This is money I could invest and attain FIRE earlier.
 
I actually used my extra savings from my student loans being suspended to pay off my husband's student loans and some other small personal loans we had. Our only debts now are my student loan and our mortgage, which is pretty awesome! (I think this is what is called the snowball method.)
 
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It's official, the extra three months COUNTS for PSLF!!!

Secretary DeVos Fully Implements President Trump's Presidential Memorandum Extending Student Loan Relief to Borrowers Through End of Year | U.S. Department of Education

"Non-payments by borrowers working full-time for qualifying employers will count toward the 120 payments required by the Public Service Loan Forgiveness program and as payments that are required to receive forgiveness under an income-driven repayment plan."

See what I mean - paying down student loans is bonkers. Eat my shorts BM
 
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Too bad you are not doing PSLF. You get the tax bomb
There are easy ways to avoid the tax bomb. And you have 20-25 years to plan for it so I doubt anyone would actually be paying taxes on 1099-C income.
 
Not if you have a retirement fund like 401 k.
Trust me, it's still easier to take on extra debt and move assets out of your name than it is to grow your 401k over 20-25 years.
 
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It's official, the extra three months COUNTS for PSLF!!!

Secretary DeVos Fully Implements President Trump's Presidential Memorandum Extending Student Loan Relief to Borrowers Through End of Year | U.S. Department of Education

"Non-payments by borrowers working full-time for qualifying employers will count toward the 120 payments required by the Public Service Loan Forgiveness program and as payments that are required to receive forgiveness under an income-driven repayment plan."

What the hell, hahah...pleasant surprise.

Hello 9yr PSLF
 
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Too bad you are not doing PSLF. You get the tax bomb

Tax bomb means nothing to me. I put 50 bucks into a mutual fund every 2 weeks to deal with the tax bomb in 16 years from now
 
So rack up personal debt to balloon that side of the ledger and shielding assets like you would apply for Medicaid. Cool strategy bro
 
There are easy ways to avoid the tax bomb. And you have 20-25 years to plan for it so I doubt anyone would actually be paying taxes on 1099-C income.
Also, if we consider the inflation, probably good to pay as little as possible and delay paying off the loan.
 
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In regards to IBR payments, every situation is different but if you can afford to suck it up and pay off debt within 4-5 years, I would say its worth it. You can play catch up in investments with the freed up cash and less restrictions on maximizing your potential income.
On the other hand, PSLF is a great deal to me considering you qualify and that there is low risk in getting disqualified within the 10 years.
 
I sometimes wish I’d done PSLF as the work I eventually landed in would have qualified. But my debt didn’t really add up to enough where it would have been all that advantageous for me anyway. After ten years I’m pretty sure I would have paid more than I ultimately did, and I didn’t like the lingering feeling of uncertainty.

Each personal scenario is so different that it doesn’t make sense for everyone to treat their debt the same way.

I do enjoy living the PSLF wins vicariously through you all however!
 
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Congrats to all on some more forgiveness. Condolences that you still hold loans in a more precarious work environment.

no condolences needed, save them for up and coming!
 
I feel like I would be crazy to pay anything more than the bare minimum on my student loans. Pay my debts or I’m a deadbeat? Please...

I would so much rather go to Disneyland - they got those mint julip things and the benyays that I can eat like a million of. If I aggressively paid off my loans I would have no idea what it’s like eating 6 benyays and and riding the haunted mansion feels like.. Screw you Dave Ramsey.

I paid my loans within 3 years. Still went to Disneyland. It can be done.
 
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FYI, it seems for those asking FedLoans to certify these waived payments that FedLoans is not counting them yet. Some feedback was that FedLoans will wait until after after October (and now December) and figure it out when the dust settles (unless you are getting forgiveness now). So don't be discouraged if you submitted your employer verification.
 
I paid my loans within 3 years. Still went to Disneyland. It can be done.


Fair enough - but there is more than one way to skin a cat right?

You are a Mentos kind of guy, I am a Now and Later kind of guy..
 
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Hey folks, check this out. FedLoans has finally implemented a progress tracker. Login to your account and press the green Check Progress button. It classified each month as: 1) Qualifying, 2) Need Employment Certification; or 3) Ineligible.

I was surprised to see one that was listed as Ineligible - Payment Is Pending Manual Review so I called FedLoans. The rep couldn't explain it but she did put in a ticket to review. So I hope I get an extra month credit.
 
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