FutureOT2018x

2+ Year Member
Dec 18, 2015
30
11
Status
Pre-Occupational Therapy
Just being accepted into OT school, I know it's kind of early to be asking about loan forgiveness/tuition reimbursement but I was wondering if anyone has any additional info/input about loan forgiveness for federal loans or just tuition reimbursement in general. I have looked at information provided by fed loan servicing. I guess the part that throws me off is what qualifies for Public Service Loan Forgiveness (PSLF). The website indicates that aside from government entities and 501 (c)(3), you can work for a private, not-for-profit organization if it provides a qualifying public service.

This is copied from the FAQs from their website:

"I work for a private, not-for-profit organization. What type of service does my organization have to provide to be eligible for Public Service Loan Forgiveness (PSLF)?
Your private, not-for-profit organization must provide one of the following services:

  • Emergency management
  • Military service (service on behalf of the U.S. Armed Forces or the National Guard)
  • Public safety
  • Law enforcement (services provided by a publicly-funded organization whose principal activities pertain to preventing, controlling, or reducing crime, or the enforcement of criminal law)
  • Public interest legal services (legal services that are funded in whole or in part by a local, State, Federal, or Tribal government)
  • Early childhood education (licensed or regulated child care, Head Start, and State-funded pre-kindergarten)
  • Public service for individuals with disabilities
  • Public service for the elderly
  • Public health (nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health support occupations)
  • Public education (services that provide educational enrichment or support directly to students or their families in a school or school-like setting)
  • Public library services
  • School library services, or other school-based services
Note: The following types of employers never qualify for PSLF:

  • For-profit organizations or businesses
  • Labor unions
  • Partisan political organizations"

----So on this FAQ page, if you click on health care practitioner occupations, it'll bring you the Bureau of Labor Stats and provide a list of practitioners. OTs are on this list.

----SO...does that mean if I worked as an OT, say at a private, not-for-profit hospital (30 hours per week minimum per qualification policy), does that mean I would qualify for loan forgiveness after making payments for ten years? I have sent multiple e-mails to admins on this website and have yet to hear back...so I just wanted to see if anyone on here had any input or info... Thanks in advance!! :)
 

occupationalguy

2+ Year Member
Aug 9, 2016
242
204
Status
DPT / OTD
The government has sadly been proposing a budget which limits public service loan forgiveness to 60k max: ten years of minimum payments. Doesn't really amount to much that way.

The debate in law will be: are you eligible for any loan once you sign that promissary note and grandfathered in, or when you start the program payments, or is no one grandfathered in. I have heard lawyers talking in forums and the consensus seems to be the first option, which is great for us if it is!

There is NO student loan forgiveness for us with terms like RNs get, or teachers.
 

Bokonomy

2+ Year Member
Apr 1, 2015
401
116
Status
Occupational Therapy Student
The government has sadly been proposing a budget which limits public service loan forgiveness to 60k max: ten years of minimum payments. Doesn't really amount to much that way.

The debate in law will be: are you eligible for any loan once you sign that promissary note and grandfathered in, or when you start the program payments, or is no one grandfathered in. I have heard lawyers talking in forums and the consensus seems to be the first option, which is great for us if it is!

There is NO student loan forgiveness for us with terms like RNs get, or teachers.
School OTs can actually get the teacher loan forgiveness, as they are considered special education, or something like that. I think it's up to 20k for 5 years, but I'm not sure. And if you want to combine it with PSLF, the years worked are considered seperate (so 15 years for 80k if that's where they cap it as opposed to 10).

Also, I have been reading everything I can find on the cap, and given that it is an election year, the proposed cap (if it happens) would be unlikely to occur in the next year. After that, the proposal would be impacted by the next president and those in office...
So, I don't mean to get political here, but if you're feeling lukewarm or even antipathy towards Hillary Clinton, vote anyway. Remember that there are downballot races and local issues you need to vote on. And keep an eye out on it and other issues supported on AOTAs website and write to your congressmen. I've actually gotten responses from one before (surely the intern, but still).
 
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occupationalguy

2+ Year Member
Aug 9, 2016
242
204
Status
DPT / OTD
School OTs can actually get the teacher loan forgiveness, as they are considered special education, or something like that. I think it's up to 20k for 5 years, but I'm not sure. And if you want to combine it with PSLF, the years worked are considered seperate (so 15 years for 80k if that's where they cap it as opposed to 10).

Also, I have been reading everything I can find on the cap, and given that it is an election year, the proposed cap (if it happens) would be unlikely to occur in the next year. After that, the proposal would be impacted by the next president and those in office...
So, I don't mean to get political here, but if you're feeling lukewarm or even antipathy towards Hillary Clinton, vote anyway. Remember that there are downballot races and local issues you need to vote on. And keep an eye out on it and other issues supported on AOTAs website and write to your congressmen. I've actually gotten responses from one before (surely the intern, but still).
I am non-political as one can get. I want these loans paid off :)

The proposed budget capping the student loan repayment is in the budget proposed by President Obama. Of course it has not passed because the Republicans don't approve anything he wants. If Hillary wins and has a Democratic congress to support her initiatives it stands to reason that this cap will pass along with the sweeping new budget. Aside from other implications - that wouldn't be so great for us.

Re the therapy Cap for OT services it is set to expire Dec 31st 2017. If the new budget has a therapy cap on OT services it will be passed, again, by congress. I'm not holding my breath but I think this cap could expire or be repealed theoretically.
 

Bokonomy

2+ Year Member
Apr 1, 2015
401
116
Status
Occupational Therapy Student
I am non-political as one can get. I want these loans paid off :)

The proposed budget capping the student loan repayment is in the budget proposed by President Obama. Of course it has not passed because the Republicans don't approve anything he wants. If Hillary wins and has a Democratic congress to support her initiatives it stands to reason that this cap will pass along with the sweeping new budget. Aside from other implications - that wouldn't be so great for us.

Re the therapy Cap for OT services it is set to expire Dec 31st 2017. If the new budget has a therapy cap on OT services it will be passed, again, by congress. I'm not holding my breath but I think this cap could expire or be repealed theoretically.
Looking into the history, while PSLF was passed when Bush was in office (2007), we had a Democratic controlled Congress at the time. Obama may have proposed a 60k cap, but it's still better than the alternative, which would be a Trump presidency with a Republican controlled Congress. Many Republicans would rather do away with PSLF entirely, so the cap may have been a compromising response on Obama's part. Or not, because it favors doctors who don't need it (their residency counts towards the ten years).

In other loan forgiveness related issues, D-NY rep Paul Tonko had proposed a provision to the recent mental health care act bill to allow for mental health OTs to be considered a profession eligible for the NHS (?) program. In general, Dems are more likely to support loan forgiveness programs and bills that support healthcare and the communities we assist.
 

occupationalguy

2+ Year Member
Aug 9, 2016
242
204
Status
DPT / OTD
Is Public Service Loan Forgiveness Being Capped?
In a recent budget plan, the Obama administration proposed capping the amount of student loans that can be forgiven under PSLF at a little over $57,000. This proposal was part of a larger reform package aimed at expanding the Pay As You Earn (PAYE) repayment program. The final regulationsfor that expanded program (now called “Revised Pay As You Earn,” or “REPAYE”) were issued just a few weeks ago, and the proposal to cap PSLF was dropped. So right now, there is no cap on PSLF in any form, for any program.

Is Public Service Loan Forgiveness Being Eliminated Altogether?
Several proposals originating in the Republican-controlled House of Representatives have called for the complete elimination of the PSLF program. This is not something to take lightly. However, in a divided government, it is common for one party to propose legislation that is more of a “wish list” than a realistic attempt to legislate, since any final legislative package necessarily will involve compromise. With the Obama administration still in the White House, any proposal to eliminate PSLF has little, if any, chance of actually passing. The final federal budget package that was ultimately passed by Congress and signed by the President in late 2015 did not contain any provision eliminating PSLF.

Okay – But Can The Public Service Loan Forgiveness Program Still Be Changed?
Technically, yes. The PSLF program is governed by federal statutes and regulations, and the federal government can pass new laws to amend existing programs. Given the current political environment, however, I think it is unlikely we will see any changes to PSLF prior to the next administration coming into office – and that doesn’t happen until January 2017.

If There Are Changes to the Public Service Loan Forgiveness, Would Current Borrowers Be Grandfathered In?
This is a very good question. I just don’t know – and there’s no way to predict what future reforms may look like, and who they would impact. However, there are a few things to note here:

  • First, when the Obama administration proposed capping PSLF, they made clear that current borrowers could continue to access currently-available federal student loan programs; the proposed “cap” would have been limited to borrowers who chose to access the expanded PAYE program (again, just to be clear, this cap ultimately was not implemented).
  • Second, after PSLF’s creation in 2007, the program has literally been written into Direct federal student loan promissory notes (the contracts setting forth the terms and conditions of Direct program loans). I’ve spoken to several legal experts who believe it might be a contractual violation for the federal government to eliminate a program that is expressly made available by contract. They could eliminate the clause from future contracts, which would affect future borrowers, but not for current borrowers.
  • Third, some estimates show that up to 25% of federal student loan borrowers may ultimately be eligible for PSLF. Canceling the forgiveness benefit for so many people (including wide swaths of politically sensitive professions such as law enforcement, teachers, and the military) could lead to public outcry.
  • Finally, there is plenty of precedent where the federal government has made certain entitlement programs more restrictive, but limited those restrictions to newer or younger entrants into the system (i.e., with reforms to Social Security and Medicare), effectively “grandfathering in” people who had been invested for awhile.
I certainly cannot predict the future or make any guarantees about any of this. However, I think these are reasons to be cautiously optimistic.

So What’s The Bottom Line?
The PSLF program can be capped, changed, or eliminated. That’s just the simple truth. But the analysis does not, and cannot, stop there.

As a practical matter, I need to be clear that there is no current law, and no serious proposal, to change PSLF right now. Also, if any changes are made in the future, I don’t think they will occur until there is a new administration and a new Congress – that’s 2017 at the earliest, which just so happens to be the year during which the first PSLF borrowers will be applying for loan forgiveness.

I do personally think there will be some sort of changes made to the PSLF program, but we cannot know at this time what those changes might be. Furthermore, for the reasons stated above, I think there are compelling reasons for any such changes to be phased in or limited to people who are not currently invested in the program – in other words, I think there are good legal and policy arguments for grandfathering in borrowers who are presently on track for PSLF. But, there’s no way to know for sure.

So much of this is ultimately going to depend on who wins the White House and what Congress looks like in 2017. So all we can really do right now is wait, watch, and hope for the best.