Jobs with Student Loan Forgiveness

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Bekki
Posts: 47
Joined: Thu Jun 11, 2015 3:06 pm

Jobs with Student Loan Forgiveness

Post by Bekki » Sun Feb 14, 2016 7:12 pm

My 28yo sister is in grad school, and deeply, DEEPLY in student loan debt. She's currently got over $125k in student loans, and she's going to take out another $40k or so to finish grad school.

The career path she has chosen (family counseling) isn't an unusually high paying job, and I have expressed concern over her desire to attend extremely expensive schools, and finance her lavish lifestyle with additional student loans.

She swears up and down that there are plenty of job opportunities in underserved areas that will pay off all of her student loans with a 10 year commitment. Because she believes that this is available to her, she has absolutely no fear of pulling out more and more debt.

I'm curious about the details of these types of positions that pay off student loans for the employees. I know that different programs can vary, but I'm wondering if there are any common guidelines to how these programs work. Specifically:

1) Is it typical for 100% of student debt to be paid? Or just federal loans?

2) Is there ever a cap on the amount of student debt that will be paid?

3) Does having an unusually high amount of student debt ever disqualify a person from such a position?

I am absolutely terrified for my sister's financial well-being. She is very a free-spirit spender, who believes that being a 28 year old with a bachelor's degree entitles her to a certain level of lifestyle. But between several maxed out credit cards, bad credit, low income (she is only working part-time as a Starbucks barista as she attends grad school), and enough student loan debt to make me break out in hives, I'm worried that she is on the fast-track to financial ruin.

I've tried several times to try and help her consider other options, and make gentle suggestions about cutting down on her spending or taking a second job. But she insists that she doesn't have to worry, because she will just take a job that pays off all of her student loans.

Is it REALLY that easy? Does such a unicorn really exist? Or is she most likely making assumptions on too little information?

I just can't imagine an entity that serves low-income, under-privileged individuals paying off the loans my sister took out to buy everything from sushi to cross-country airfare to visit family.

User avatar
JonnyDVM
Posts: 1583
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Jobs with Student Loan Forgiveness

Post by JonnyDVM » Sun Feb 14, 2016 7:22 pm

She's referring to PSLF or public student loan forgiveness. Yes it exists. 10 years in a qualified position and the loans disappear thus giving people like your sister no incentive to curtail their borrowing. There was recently some political discussions of capping the PSLF at 54k since allowing an astronomical amount of loan debt to be forgiven is not going to be easy on the taxpayer. I'm not sure what the update is on that. Your sister should be aware that a cap is almost certainly on the horizon. Worst case scenario she could do REPYE. Payments are capped at 10% of income and debt is forgiven after 20 years. That may be what she ultimately ends up looking at. Sounds like her bed is already made and the loans are already at the point where her career will offer her no way to actually repay them in full.

So yes, an interesting conundrum has been created by the federal loan system. If you know your loans will ultimately be forgiven why not borrow as much as they'll give you ? Some might feel morally wrong about borrowing student loan money to eat fancy dinners. Other don't. All of us taxpayers are the ones that will ultimately be on the hook for 165k + interest.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

ktd
Posts: 159
Joined: Mon Mar 10, 2014 8:19 am

Re: Jobs with Student Loan Forgiveness

Post by ktd » Sun Feb 14, 2016 7:26 pm

I am sure laws will change for PSLF. For the income based repayment plan, she will have to pay taxes on the amount forgiven. The IRS is going to get its money no matter what.

jridger2011
Posts: 458
Joined: Sun Feb 06, 2011 4:17 pm

Re: Jobs with Student Loan Forgiveness

Post by jridger2011 » Sun Feb 14, 2016 7:29 pm

The program is real and as I understand, it does not have to be with the same job for 10 years straight. The issue is finding a series of jobs that are decent enough to do 10 yrs worth without wanting to change course but be on the hook to pay the loans off in full.

Bekki
Posts: 47
Joined: Thu Jun 11, 2015 3:06 pm

Re: Jobs with Student Loan Forgiveness

Post by Bekki » Sun Feb 14, 2016 8:17 pm

JonnyDVM wrote:She's referring to PSLF or public student loan forgiveness. Yes it exists. 10 years in a qualified position and the loans disappear thus giving people like your sister no incentive to curtail their borrowing. There was recently some political discussions of capping the PSLF at 54k since allowing an astronomical amount of loan debt to be forgiven is not going to be easy on the taxpayer. I'm not sure what the update is on that. Your sister should be aware that a cap is almost certainly on the horizon. Worst case scenario she could do REPYE. Payments are capped at 10% of income and debt is forgiven after 20 years. That may be what she ultimately ends up looking at. Sounds like her bed is already made and the loans are already at the point where her career will offer her no way to actually repay them in full.

So yes, an interesting conundrum has been created by the federal loan system. If you know your loans will ultimately be forgiven why not borrow as much as they'll give you ? Some might feel morally wrong about borrowing student loan money to eat fancy dinners. Other don't. All of us taxpayers are the ones that will ultimately be on the hook for 165k + interest.


Thanks for that info! It's helpful now to at least know the name of this program, so that I can Google.

I came across this article, that had some good (and scary) info:

http://www.yesmagazine.org/issues/the-d ... m-20150908


I think I'm just shocked that a cap was never put in place to begin with. Where the heck is all of this money supposed to come from??

Oh, right. We, the taxpayers.

Do you know if this program applies to both federal and private student loans? Or just federal? Because I'm not certain, but I am pretty sure that at least 50k of her loans are private.

The whole thing is just a mess. It irritates me a LOT that she willingly splurges on luxuries with the expectation that the taxpayers will cover everything.

User avatar
JonnyDVM
Posts: 1583
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Jobs with Student Loan Forgiveness

Post by JonnyDVM » Sun Feb 14, 2016 10:37 pm

Bekki wrote:
JonnyDVM wrote:She's referring to PSLF or public student loan forgiveness. Yes it exists. 10 years in a qualified position and the loans disappear thus giving people like your sister no incentive to curtail their borrowing. There was recently some political discussions of capping the PSLF at 54k since allowing an astronomical amount of loan debt to be forgiven is not going to be easy on the taxpayer. I'm not sure what the update is on that. Your sister should be aware that a cap is almost certainly on the horizon. Worst case scenario she could do REPYE. Payments are capped at 10% of income and debt is forgiven after 20 years. That may be what she ultimately ends up looking at. Sounds like her bed is already made and the loans are already at the point where her career will offer her no way to actually repay them in full.

So yes, an interesting conundrum has been created by the federal loan system. If you know your loans will ultimately be forgiven why not borrow as much as they'll give you ? Some might feel morally wrong about borrowing student loan money to eat fancy dinners. Other don't. All of us taxpayers are the ones that will ultimately be on the hook for 165k + interest.


Thanks for that info! It's helpful now to at least know the name of this program, so that I can Google.

I came across this article, that had some good (and scary) info:

http://www.yesmagazine.org/issues/the-d ... m-20150908


I think I'm just shocked that a cap was never put in place to begin with. Where the heck is all of this money supposed to come from??

Oh, right. We, the taxpayers.

Do you know if this program applies to both federal and private student loans? Or just federal? Because I'm not certain, but I am pretty sure that at least 50k of her loans are private.

The whole thing is just a mess. It irritates me a LOT that she willingly splurges on luxuries with the expectation that the taxpayers will cover everything.


Unfortunately for your sister only federal loans are available for PSLF and I believe the other income based repayment options with forgiveness on the end only apply to federal loans as well. PSLF is being leveraged hard by some MDs who's jobs pay hundreds of thousands of dollars but who are still on track to have 400k or more forgiven. It's been referred to as the"doctors loophole" so your sister isn't the only one taking advantage. I suspect the whole thing will blow up when the first wave of PSLF comes (2017? If I'm not mistaken). I don't think readers of the New York Times are going to take kindly to articles highlighting how a doctor making 200k/yr had half a million in student loans waived away. The PSLF was put in place to help someone like your sister not be burdened by tremendous student debt while filling a needed government position that helps the greater good. Frittering away borrowed public money with the expectation that she won't have to pay it back is abuse of the program IMO. To be honest I can't blame people for taking advantage when the opportunity is sitting right there for them. I would be very surprised if a cap wasn't installed in short order. From a pragmatic standpoint your sister needs to make repaying her private debt a priority and hope the government comes through with the promised bail out for her federal loan balance. This is obvious but taking out private student loans to finance an education in social work is not a good financial decision.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

logical synapse
Posts: 20
Joined: Sat May 25, 2013 6:50 pm

Re: Jobs with Student Loan Forgiveness

Post by logical synapse » Sun Feb 14, 2016 11:26 pm

Others are correct that PSLF and other federally mandated income based repayment plans are only applicable to government loans and will not apply to any private loans. Just to play devil's advocate in support of PSLF, the government has actually profited quite handsomely on student lending in the past few years (http://www.businessinsider.com/student- ... fit-2013-5). However I agree that it remains possible, perhaps even likely, that the government will place a cap on PSLF. Whether that cap should be retroactive or not will be up to debate, as many people have made career decisions based on the availability of PSLF. Good luck OP! Unfortunately even if your sisters loans are forgiven, how does she plan on funding her expensive lifestyle on a modest salary? She needs too learn to live below her means now more than ever...

User avatar
LadyGeek
Site Admin
Posts: 41590
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Jobs with Student Loan Forgiveness

Post by LadyGeek » Sun Feb 14, 2016 11:34 pm

I removed some off-topic comments (post removed). As a reminder, see: General Etiquette

We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

Additionally, opinions of the political process (taxpayers paying for this program) are off-topic.

UNACCEPTABLE TOPICS

Politics and Religion

In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
  • Common religious expressions such as sending your prayers to an ailing member.
  • Usage of factual and non-derogatory political labels when necessary to the discussion at hand.
  • Discussions about enacted laws or regulations that affect the individual investor. Note that discussions of proposed legislation are prohibited.
  • Proposed regulations that are directly related to investing may be discussed if and when they are published for public comments.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
legio XX
Posts: 411
Joined: Tue Jul 15, 2008 6:37 am
Location: NYC

Re: Jobs with Student Loan Forgiveness

Post by legio XX » Mon Feb 15, 2016 8:30 am

JonnyDVM wrote: I don't think readers of the New York Times are going to take kindly to articles highlighting how a doctor making 200k/yr had half a million in student loans waived away. The PSLF was put in place to help someone like your sister not be burdened by tremendous student debt while filling a needed government position that helps the greater good.


This was always my understanding of those public service options. Obviously things have changed if the MDs don't need to work in under-served areas or a similar quid pro quo. ?!?! Under the original concept I can't see much room for abuse. Who would spend ten years as a social worker or teacher/doctor in a poverty area without a vocation for that kind of work? Not exactly an easy out for anyone else. I certainly never considered public school teaching to kill my loans even though paying was a long slog.

Vic

User avatar
market timer
Posts: 5809
Joined: Tue Aug 21, 2007 1:42 am

Re: Jobs with Student Loan Forgiveness

Post by market timer » Mon Feb 15, 2016 8:39 am

Something like 40% of jobs are eligible for Public Service Loan Forgiveness.

mcs_GA
Posts: 5
Joined: Sun Dec 29, 2013 10:13 am

Re: Jobs with Student Loan Forgiveness

Post by mcs_GA » Mon Feb 15, 2016 8:52 am

Jobs where you are eligible for student loan forgiveness are often lower paying jobs and/or very demanding. The intent of the loan forgiveness is for people who want to go into public serving jobs, who are willing to trade financial gain for public good. While your sister may have those altruistic leanings, her lifestyle doesn't match it. My concern would be, even if her student loans magically disappear, she lives and expects a lifestyle that will always beyond her reach.

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Mon Feb 15, 2016 8:56 am

legio XX wrote:
JonnyDVM wrote: I don't think readers of the New York Times are going to take kindly to articles highlighting how a doctor making 200k/yr had half a million in student loans waived away. The PSLF was put in place to help someone like your sister not be burdened by tremendous student debt while filling a needed government position that helps the greater good.


This was always my understanding of those public service options. Obviously things have changed if the MDs don't need to work in under-served areas or a similar quid pro quo. ?!?! Under the original concept I can't see much room for abuse. Who would spend ten years as a social worker or teacher/doctor in a poverty area without a vocation for that kind of work? Not exactly an easy out for anyone else. I certainly never considered public school teaching to kill my loans even though paying was a long slog.

Vic


Any job at any 501(c)3 nonprofit qualifies, which means that high wage earners in many different positions can qualify. Hospitals/medical systems and universities - where there are many, many highly compensated individuals - provide ample opportunities for PSLF while still offering great salaries and benefits.

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Mon Feb 15, 2016 9:16 am

Bekki wrote:
1) Is it typical for 100% of student debt to be paid? Or just federal loans?



This fact is a serious concern for your sister if she has substantial private loans in addition to federal loans. Private loans do not qualify for forgiveness, but that's not her biggest problem. Federal loan repayments are adjusted based on income and total loan debt, which often makes them affordable even for low wage earners. Private loan holders will give her no such consideration. The payments will be high, the repayment terms inflexible, and if she experiences job loss or an inability to pay for any other reason, they will come after her.

Bekki
Posts: 47
Joined: Thu Jun 11, 2015 3:06 pm

Re: Jobs with Student Loan Forgiveness

Post by Bekki » Mon Feb 15, 2016 9:37 am

According to my sister, there are a lot of job opportunities that qualify for this program in her field (counseling). That makes sense.

But yes, I am mostly concerned about her spending habits. If all of her federal loans disappear after ten years, that will be fantastic. But if her spending patterns continue this way, she will be just as bad off, or worse off, in the long run.

She is 28, and has not yet had to support herself fully by virtue of her own hard work. She's either been in school for her undergrad (100% financed with loans), living at home with my parents rent free for several years after that while she worked part time, spent money with abandon, and took time to decide what she wanted to do with her life. Now that she is in grad school, she is living on her own for the first time ever, but she only works part time and takes about $1500/month in additional student loans to cover living expenses and other expenditures.

Her expectation that 100% of her loans will be forgiven removes any and all incentive to live frugally, and work full time to support herself. And now she's talking about dropping to part time for grad school, because full time school is just "too much work" for her.

I can absolutely see how the PSLF is helpful for many people, especially those going in to desperately needed helping fields. But it's turning out to be a huge pitfall for my sister.

yeledbed
Posts: 48
Joined: Mon Apr 02, 2012 10:22 pm

Re: Jobs with Student Loan Forgiveness

Post by yeledbed » Mon Feb 15, 2016 3:58 pm

PSLF is a real thing, but it sounds like your sister (and possibly several posters) may not fully understand the program.

The requirement for forgiveness is not "10 years in public service"; it is "making 120 qualifying payments while employed full-time in public service". To qualify, a payment must be timely, for the full amount due, and made under a qualifying repayment plan (usually income-driven). She will be responsible for paying back her loans for 10 years. Only after that, will the remaining amount be forgiven. And, as others have correctly mentioned, only federal loans apply, specifically those received under the "William D. Ford Federal Direct Loan (Direct Loan) Program". Other federal loans aren't eligible, but may be consolidated into an eligible program. Private student loans are not eligible.

Here's a site with details: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service

User avatar
JonnyDVM
Posts: 1583
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Jobs with Student Loan Forgiveness

Post by JonnyDVM » Mon Feb 15, 2016 6:02 pm

I understand PSLF just fine. I've read and debated it's merits many times. Personally I believe loan debt has gotten totally out of control but I find the patches put in place to offer relief very unpalatable. There are many people in my profession blowing a gasket because the jobs that fit the criteria for PSLF are in some cases directly competing against them in the private sector. The jobs that qualify for PSLF go way beyond the scope of what was originally intended. Knowing the loan balances ear marked for forgiveness are essentially public money going up in smoke makes it a double whammy. Ten percent of a typical social worker's income is not going to put a dent into 150k of a ballooning loan balance. The merits of the PSLF program are not an appropriate topic for this forum, but your sister will certainly be able to find a job that qualifies for the program given her degree choice. It seems highly unlikely she will be able to find a job that provides for the life style she wants to live.

A reasonable approach in my mind for her would be to-
1) Not take any more private loans
2) Find the highest paying PSLF qualifying job available
3) Significantly reduce/eliminate any luxury expenses (sushi, vacations, 500 tv channels...)
4) Make sure I did everything that made me eligible for forgiveness after 10 years (assuming the program still exists)
5) Consider taking a part time job above and beyond whatever job in social work she finds to pay down the private school debt as fast as possible (I'm thinking waitressing, data entry, or something like that). I know this is a long shot and probably won't happen but this is realistically something she should be considering if she ever wants to be out of debt. Perhaps financial independence is something that is just not important to her? Unfortunately OP you can't force people to see the light.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

Maverick3320
Posts: 359
Joined: Tue May 12, 2015 2:59 pm

Re: Jobs with Student Loan Forgiveness

Post by Maverick3320 » Tue Feb 16, 2016 4:20 pm

JonnyDVM wrote:
Bekki wrote:
JonnyDVM wrote:She's referring to PSLF or public student loan forgiveness. Yes it exists. 10 years in a qualified position and the loans disappear thus giving people like your sister no incentive to curtail their borrowing. There was recently some political discussions of capping the PSLF at 54k since allowing an astronomical amount of loan debt to be forgiven is not going to be easy on the taxpayer. I'm not sure what the update is on that. Your sister should be aware that a cap is almost certainly on the horizon. Worst case scenario she could do REPYE. Payments are capped at 10% of income and debt is forgiven after 20 years. That may be what she ultimately ends up looking at. Sounds like her bed is already made and the loans are already at the point where her career will offer her no way to actually repay them in full.

So yes, an interesting conundrum has been created by the federal loan system. If you know your loans will ultimately be forgiven why not borrow as much as they'll give you ? Some might feel morally wrong about borrowing student loan money to eat fancy dinners. Other don't. All of us taxpayers are the ones that will ultimately be on the hook for 165k + interest.


Thanks for that info! It's helpful now to at least know the name of this program, so that I can Google.

I came across this article, that had some good (and scary) info:

http://www.yesmagazine.org/issues/the-d ... m-20150908


I think I'm just shocked that a cap was never put in place to begin with. Where the heck is all of this money supposed to come from??

Oh, right. We, the taxpayers.

Do you know if this program applies to both federal and private student loans? Or just federal? Because I'm not certain, but I am pretty sure that at least 50k of her loans are private.

The whole thing is just a mess. It irritates me a LOT that she willingly splurges on luxuries with the expectation that the taxpayers will cover everything.


Unfortunately for your sister only federal loans are available for PSLF and I believe the other income based repayment options with forgiveness on the end only apply to federal loans as well. PSLF is being leveraged hard by some MDs who's jobs pay hundreds of thousands of dollars but who are still on track to have 400k or more forgiven. It's been referred to as the"doctors loophole" so your sister isn't the only one taking advantage. I suspect the whole thing will blow up when the first wave of PSLF comes (2017? If I'm not mistaken). I don't think readers of the New York Times are going to take kindly to articles highlighting how a doctor making 200k/yr had half a million in student loans waived away. The PSLF was put in place to help someone like your sister not be burdened by tremendous student debt while filling a needed government position that helps the greater good. Frittering away borrowed public money with the expectation that she won't have to pay it back is abuse of the program IMO. To be honest I can't blame people for taking advantage when the opportunity is sitting right there for them. I would be very surprised if a cap wasn't installed in short order. From a pragmatic standpoint your sister needs to make repaying her private debt a priority and hope the government comes through with the promised bail out for her federal loan balance. This is obvious but taking out private student loans to finance an education in social work is not a good financial decision.


I've got no dog in this fight, but isn't the income:loan ratio exactly the same for a doctor as the OP's sister? The doctor makes 200k, but owes 500k; the social worker makes 50k, but owes 125k. Both are equally difficult to pay off, are they not?

User avatar
Toons
Posts: 12101
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: Jobs with Student Loan Forgiveness

Post by Toons » Tue Feb 16, 2016 4:25 pm

She's currently got over $125k in student loans, and she's going to take out another $40k or so to finish grad school.

She needs to take the mindset that this money Must be paid back ,irregardless if she does not get a high paying job. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

User avatar
Taco Knight
Posts: 160
Joined: Mon Apr 06, 2015 11:02 am

Re: Jobs with Student Loan Forgiveness

Post by Taco Knight » Tue Feb 16, 2016 4:48 pm

yeledbed wrote:PSLF is a real thing, but it sounds like your sister (and possibly several posters) may not fully understand the program.

The requirement for forgiveness is not "10 years in public service"; it is "making 120 qualifying payments while employed full-time in public service". To qualify, a payment must be timely, for the full amount due, and made under a qualifying repayment plan (usually income-driven). She will be responsible for paying back her loans for 10 years. Only after that, will the remaining amount be forgiven. And, as others have correctly mentioned, only federal loans apply, specifically those received under the "William D. Ford Federal Direct Loan (Direct Loan) Program". Other federal loans aren't eligible, but may be consolidated into an eligible program. Private student loans are not eligible.

Here's a site with details: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service


I can't believe I had to read this many posts before someone was able to competently comment on PSLF.

For all those who think it's "free", you have to sign up for some sort of payment plan, usually one that is the lowest, IBR, PAYE, RePAYE, etc. And make 120 payments while employed by a certified employer (government, school, 501c3 etc).

I don't have the data, but c'mon! Very very few MDs are using this program. Ignoring the question of how many have employers that qualify (a small %, I'd wager), this isn't free money! If you have to pay 10-15% of your discretionary income based on your salary and the putative MD is raking in 200K, they are paying quite a bit, say 1-3K a month, that it's likely cheaper for them to pay them off aggressively like a non-PSLF borrower. Also, bear in mind that if an MD is making 200K out of school, what he or she would be making 10 years later. Why would they even try to limit themselves with any PSLF option?

Look at this way: Say an MBA and an MPA cost the same and have the same social costs and career interruption and everything. But an MBA goes into the private sector and makes 100K right out of school (and maybe even a quick 30K over the summer between), but the MPA goes to work an entry-level government position and makes 45K. In 5 years, equally promoted, the MBA might be making 300K and the MPA is making 85K. Most heads of agencies max out at 100-300K, and that's folks with 30 years' experience.

Now do you see who it's supposed to help? The MBA ought to aggressively pay down their student loans to escape the interest, while the MPA will sign up on a plan and have a 100K debt looming over them for 120 months, but only pay 300-500/month. This is because the MPA could have gotten a higher-paying job and gone to school for it, but chose to work in PUBLIC SERVICE, even though the degrees cost the same in time and effort.

Talk about a strawman argument, this strawdoctor falls flat.

User avatar
JonnyDVM
Posts: 1583
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Jobs with Student Loan Forgiveness

Post by JonnyDVM » Tue Feb 16, 2016 8:30 pm

Taco Knight wrote:
Talk about a strawman argument, this strawdoctor falls flat.


http://whitecoatinvestor.com/the-doctor ... -and-pslf/

You are mistaken. This is happening. I know several people who are actively doing it. If you are an MD with 400k 500k 600k in loans and wanted to go into a position at a university where the position was PSLF eligible anyway why wouldn't you? The savings versus aggressive loan payoff are substantial. Why I don't begrudge anyone for doing it because they can, it is annoying when my wife and I worked hard to pay back what we borrow while others can borrow and then not repay the entire balance. As for it not being free- when you borrow and repay substantially less than you borrowed plus the interest you owed you are getting a deal. The money written off has to come from somewhere. I stand by my prior claim that PSLF requirements were inadvertently made too loose allowing a lot of people to qualify that the program was not really made for. I hope this doesn't end up bringing a retroactive cap that is devastating for those for whom the program was actually intended.

If you borrow 150K at 5% interest for an education the repay 10% annually of a 45k salary for a decade how much of the loan are you repaying? Not much.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

User avatar
Taco Knight
Posts: 160
Joined: Mon Apr 06, 2015 11:02 am

Re: Jobs with Student Loan Forgiveness

Post by Taco Knight » Wed Feb 17, 2016 9:41 am

JonnyDVM wrote:If you borrow 150K at 5% interest for an education the repay 10% annually of a 45k salary for a decade how much of the loan are you repaying? Not much.


Right, but you're repaying 10% of 45K or or more 120 times... that's not free.

User avatar
JonnyDVM
Posts: 1583
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Jobs with Student Loan Forgiveness

Post by JonnyDVM » Wed Feb 17, 2016 1:17 pm

Taco Knight wrote:
JonnyDVM wrote:If you borrow 150K at 5% interest for an education the repay 10% annually of a 45k salary for a decade how much of the loan are you repaying? Not much.


Right, but you're repaying 10% of 45K or or more 120 times... that's not free.


While it's not totally free in the truest sense of the word, I think you would agree only being required to repay an amount annually that doesn't even cover the interest on your loan is of significant financial benefit to you. My main beef with the whole program isn't people taking advantage of it. The issue is how we got here in the first place. They shouldn't charge you 150k tuition to become a social worker and they certainly shouldn't let you borrow that much. The entire system needs reformed. For some reason no one seems to care that our educational system has reached a point where people literally are incapable of paying back the debt they took on without government repayment programs that cap payment amounts and forgive loans at the end. That makes no sense whatsoever. Where is all this money going to come from in 20 years when millions of dollars of educational debt is forgiven? Why does no one care about this!
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Wed Feb 17, 2016 1:51 pm

Taco Knight wrote:
Talk about a strawman argument, this strawdoctor falls flat.


You're correct that PSLF isn't free, and that's important for the OP to note.

There are, however, many MDs and other high wage earners using the program. In fact, it's really only beneficial to those who earn advanced degrees, as the debt:income ratios don't work out for those with only an undergraduate degree.

In Pittsburgh, both of our major health systems are nonprofit organizations, which makes every single one of their employees eligible for PSLF. As a young doctor in those systems, you'd have to be an idiot not to be applying for IBR/REPAYE/ICR and planning on using PSLF. Even with an AGI of $200,000, your monthly payments would be capped between $1500-$2300 on a loan balance of $500,000. You'll very quickly find yourself only paying the loan interest, so the entire amount will become tax deductible. After 120 payments, you'll have contributed a grand total of $180,000-$276,000, and the remaining balance, including interest, is forgiven. That's an incentive worth close to $500,000 itself - probably more if you bother to run the numbers on the value of tax deductions and the additional income freed for investing each month.

Jeff P
Posts: 145
Joined: Tue Aug 11, 2015 10:07 am

Re: Jobs with Student Loan Forgiveness

Post by Jeff P » Wed Feb 17, 2016 2:44 pm

Edited. See below.
Last edited by Jeff P on Thu Feb 18, 2016 5:54 pm, edited 1 time in total.

User avatar
Taco Knight
Posts: 160
Joined: Mon Apr 06, 2015 11:02 am

Re: Jobs with Student Loan Forgiveness

Post by Taco Knight » Wed Feb 17, 2016 3:05 pm

psystal wrote:Even with an AGI of $200,000, your monthly payments would be capped between $1500-$2300 on a loan balance of $500,000. You'll very quickly find yourself only paying the loan interest, so the entire amount will become tax deductible. After 120 payments, you'll have contributed a grand total of $180,000-$276,000, and the remaining balance, including interest, is forgiven. That's an incentive worth close to $500,000 itself - probably more if you bother to run the numbers on the value of tax deductions and the additional income freed for investing each month.


Except there is a cap on student loan interest deduction, of either $2500 or $3K. So that still puts 10s of 1000s of dollars as an actual cost to repayment.

User avatar
Taco Knight
Posts: 160
Joined: Mon Apr 06, 2015 11:02 am

Re: Jobs with Student Loan Forgiveness

Post by Taco Knight » Wed Feb 17, 2016 3:10 pm

JonnyDVM wrote:
Taco Knight wrote:
JonnyDVM wrote:If you borrow 150K at 5% interest for an education the repay 10% annually of a 45k salary for a decade how much of the loan are you repaying? Not much.


Right, but you're repaying 10% of 45K or or more 120 times... that's not free.


While it's not totally free in the truest sense of the word, I think you would agree only being required to repay an amount annually that doesn't even cover the interest on your loan is of significant financial benefit to you. My main beef with the whole program isn't people taking advantage of it. The issue is how we got here in the first place. They shouldn't charge you 150k tuition to become a social worker and they certainly shouldn't let you borrow that much. The entire system needs reformed. For some reason no one seems to care that our educational system has reached a point where people literally are incapable of paying back the debt they took on without government repayment programs that cap payment amounts and forgive loans at the end. That makes no sense whatsoever. Where is all this money going to come from in 20 years when millions of dollars of educational debt is forgiven? Why does no one care about this!


Yes, I agree with you on the latter. My contention above was never to doubt that it's a good deal, but the tone of the OP and the first few replies seemed to imply that PSLF was free in the sense of free. It's really just a way to help those who need it and are well-intentioned and to influence those who might not be as well-intentioned into making a choice they otherwise might not have without the program.

But the cost of education in this country is abysmal in general. If you want a program that costs the average taxpayer even more (with arguably less public benefit) look at the private for-profit degree mills which take the GI Bill. American servicepeople (which, obviously, we've seen a lot of in the past decade) are getting useless degrees from uncredited businesses because they don't know any better, and while it may be at little cost to them, it costs the taxpayers a lot and the for-profit "schools" make it as pure revenue, no FAFSA or grants or anything.

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Wed Feb 17, 2016 3:11 pm

Jeff P wrote:This is a different program but is a reflection of how the tax bill at the end for the forgiven amount/amount paid on your behalf can really mess you up financially.

It’s incredibly depressing to think about, that bankruptcy may be your only option … to start over at 55 when you worked so hard to get an education to better yourself and society.

— Michael Hulshof, a 2012 graduate of the University of La Verne College of Law who was profiled in a recent NBC News article on personal finance, commenting on the ticking tax time bomb that’s perhaps better known as income-based loan repayment.

(When Hulshof graduated from law school, he had $145,000 in student debt. Today, thanks to accruing interest of roughly $1,500 a month, he has about $220,000 in student debt. By the time his debt is forgiven at the end of the 25-year repayment plan, he’ll owe the government approximately $400,000. Hulshof estimates that he’ll owe up to $175,000 in taxes on his forgiven law school debt.)


http://abovethelaw.com/2016/02/income-based-law-school-debt-repayment-will-eventually-ruin-you-financially/


That's true for regular borrowers, and an important consideration. You wouldn't want the bill to be unexpected.

However, for the OP, loans forgiven under PSLF are not taxable.

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Wed Feb 17, 2016 3:13 pm

Taco Knight wrote:
psystal wrote:Even with an AGI of $200,000, your monthly payments would be capped between $1500-$2300 on a loan balance of $500,000. You'll very quickly find yourself only paying the loan interest, so the entire amount will become tax deductible. After 120 payments, you'll have contributed a grand total of $180,000-$276,000, and the remaining balance, including interest, is forgiven. That's an incentive worth close to $500,000 itself - probably more if you bother to run the numbers on the value of tax deductions and the additional income freed for investing each month.


Except there is a cap on student loan interest deduction, of either $2500 or $3K. So that still puts 10s of 1000s of dollars as an actual cost to repayment.


That's true, and I should correct myself a bit further, too. The deduction is phased out above $80,000 in income, so it's likely not applicable to our $200,000 income individual.

Still, the basic argument doesn't change substantially.

User avatar
Taco Knight
Posts: 160
Joined: Mon Apr 06, 2015 11:02 am

Re: Jobs with Student Loan Forgiveness

Post by Taco Knight » Wed Feb 17, 2016 3:19 pm

Fair enough.

However, I can only look at it via the lens that if I had a 200K AGI and 500K in student loans, I'd pay them off in full in three years and have years 4-10 of the same period enjoying the dickens out of my income.

When you clock 30-60K in AGI and have a 50-150K debt looming, the PSLF is the way to go.

User avatar
Taco Knight
Posts: 160
Joined: Mon Apr 06, 2015 11:02 am

Re: Jobs with Student Loan Forgiveness

Post by Taco Knight » Wed Feb 17, 2016 3:21 pm

psystal wrote:


That's true for regular borrowers, and an important consideration. You wouldn't want the bill to be unexpected.

However, for the OP, loans forgiven under PSLF are not taxable.


The part I bolded should be edited into Jeff P's post so someone midway through a modest PSLF doesn't have a heart attack...

User avatar
JonnyDVM
Posts: 1583
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Jobs with Student Loan Forgiveness

Post by JonnyDVM » Fri Feb 19, 2016 7:25 am

Taco Knight wrote:
psystal wrote:


That's true for regular borrowers, and an important consideration. You wouldn't want the bill to be unexpected.

However, for the OP, loans forgiven under PSLF are not taxable.


The part I bolded should be edited into Jeff P's post so someone midway through a modest PSLF doesn't have a heart attack...


The average person in the United States saves very little for retirement or emergencies, carries a balance on credit cards and lives primarily paycheck to paycheck. Anyone that thinks the loan coffers will actually be replenished by tax balances due on forgiven amounts is dreaming. I'd be more than willing to wager 90% + of REPAYE/IBE participants somply won't have the funds to pay the taxes due. Coincidently, those that came up with this brilliant idea will be out of the political picture by them. Also in 20 years those with large outstanding loan balances will make up a huge population of the voting public. I think you can see where I'm going with this.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

User avatar
JonnyDVM
Posts: 1583
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Jobs with Student Loan Forgiveness

Post by JonnyDVM » Fri Feb 19, 2016 7:34 am

Taco Knight wrote:Fair enough.

However, I can only look at it via the lens that if I had a 200K AGI and 500K in student loans, I'd pay them off in full in three years and have years 4-10 of the same period enjoying the dickens out of my income.

When you clock 30-60K in AGI and have a 50-150K debt looming, the PSLF is the way to go.


You're not thinking about the taxes that come out of a 200k salary couples with the size of payments needed to quickly trim down a massive sized 500k loan. Add in the pressure to live like a doctor and PSLF becomes the obvious choice. The majority of MDs with big loans and big salaries without PSLF as an option for them don't pay off their loans in short order. They quickly move into nicer homes and nicer cars and rapidly adjust to the hefty income. If you can make 120 payments towards PSLF and be done (with your time as a resident counting towards that 10 year accrual) you'd be foolish not to do so.

When you have 40k income and 150k loans or 80k income and 400k loans (I've seen this one) PSLF or IBR or REPAYE doesn't become an option. It becomes a necessity if you want to eat. The 80k/400k explained to me that without IBR he literally would not be capable of making his payments as they nearly exceeded his net salary. The immediate question that comes to mind is why our government decided it was a good idea to lend him 400k!
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Fri Feb 19, 2016 9:18 am

JonnyDVM wrote:
Taco Knight wrote:
psystal wrote:


That's true for regular borrowers, and an important consideration. You wouldn't want the bill to be unexpected.

However, for the OP, loans forgiven under PSLF are not taxable.


The part I bolded should be edited into Jeff P's post so someone midway through a modest PSLF doesn't have a heart attack...


The average person in the United States saves very little for retirement or emergencies, carries a balance on credit cards and lives primarily paycheck to paycheck. Anyone that thinks the loan coffers will actually be replenished by tax balances due on forgiven amounts is dreaming. I'd be more than willing to wager 90% + of REPAYE/IBE participants somply won't have the funds to pay the taxes due. Coincidently, those that came up with this brilliant idea will be out of the political picture by them. Also in 20 years those with large outstanding loan balances will make up a huge population of the voting public. I think you can see where I'm going with this.


Only individuals with graduate degrees (and the higher associated loan balances) are likely to have any unpaid loans after 20 years, even under REPAYE/IBR plans. You'd have to have accrued unusually large debt and spent 20 years of your career at an unusually low salary. Considering that only 11% of the US population has a graduate degree, this isn't likely to happen to very many people. Even the OP's sister will probably pay off all of her debt before the 20 year mark.

User avatar
DaftInvestor
Posts: 3220
Joined: Wed Feb 19, 2014 10:11 am

Re: Jobs with Student Loan Forgiveness

Post by DaftInvestor » Fri Feb 19, 2016 10:00 am

Here's another posting from a lawyer who is taking advantage of this program:
http://thefinancialdiet.com/everything- ... s-program/

Tax-free loan forgiveness for Lawyers and Doctors in public service - who would of thought it possible. The above lawyer talks about how complex the rules are - getting thousands, or tens or hundreds of thousands, in free money should be complex.

stockpile
Posts: 21
Joined: Mon Jan 25, 2016 2:23 am

Re: Jobs with Student Loan Forgiveness

Post by stockpile » Fri Feb 19, 2016 10:14 am

With all these payment programs that MDs are taking advantage of, it really makes you questions why any doc would go into the military to get their loans paid (HPSP). Not good for manpower going forward.

soupcxan
Posts: 208
Joined: Tue Apr 14, 2009 8:54 am

Re: Jobs with Student Loan Forgiveness

Post by soupcxan » Fri Feb 19, 2016 10:45 am

[deleted]
Last edited by soupcxan on Tue Aug 02, 2016 1:48 pm, edited 1 time in total.

stuffthatpig
Posts: 43
Joined: Fri Feb 05, 2016 1:19 pm

Re: Jobs with Student Loan Forgiveness

Post by stuffthatpig » Fri Feb 19, 2016 1:03 pm

Ah my generation...what a bunch of fools. Glad I escaped only owing ~$30k.

My friend owes $140k for his communication degree with $90k of it being private loans. He and his parents (who had to cosign) took out another loan for $40k and called up discover and said, "Listen, either you take this $40k or you'll never see another dime from us." Discover took the money and the borrowers defaulted on $50k of it. That sounds like something she may want to look into as well. If you do it up front (and continue to pay your Federal loans) you could save a bunch of money. Not exactly sure what assets or resources your sister has to come up with a stack of cash but that's a great option.

Now can we figure out how to teach young, impressionable students that student loans ARE NOT FREE? Seriously y'all.

flyingbison
Posts: 1363
Joined: Wed Mar 12, 2014 8:52 am

Re: Jobs with Student Loan Forgiveness

Post by flyingbison » Fri Feb 19, 2016 1:21 pm

stuffthatpig wrote:Ah my generation...what a bunch of fools. Glad I escaped only owing ~$30k.



Average student loan debt for class of 2015 is only about $35K, for those who graduate with loans at all (about 70%).

stuffthatpig
Posts: 43
Joined: Fri Feb 05, 2016 1:19 pm

Re: Jobs with Student Loan Forgiveness

Post by stuffthatpig » Fri Feb 19, 2016 1:30 pm

flyingbison wrote:
stuffthatpig wrote:Ah my generation...what a bunch of fools. Glad I escaped only owing ~$30k.



Average student loan debt for class of 2015 is only about $35K, for those who graduate with loans at all (about 70%).

True. People complain a lot but I think the numbers are extremely skewed by the 6 figure loan debt crowd.

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Fri Feb 19, 2016 1:37 pm

flyingbison wrote:
stuffthatpig wrote:Ah my generation...what a bunch of fools. Glad I escaped only owing ~$30k.



Average student loan debt for class of 2015 is only about $35K, for those who graduate with loans at all (about 70%).


That's an important point for perspective. The only ones running up truly incomprehensible amounts of debt are those that continue on to graduate school, which isn't a very large portion of the population. It's also good for the OP to note - it shows what an outlier her sister is in terms of the general population.

Whacker
Posts: 17
Joined: Sun Mar 29, 2015 1:12 am

Re: Jobs with Student Loan Forgiveness

Post by Whacker » Sat Feb 20, 2016 11:51 am

For folks who see PSLF as some inappropriate handout, please consider the following:

Our public and nonprofit sectors require the employ of doctors, lawyers, engineers, and other highly-educated professionals. Higher education cannot always be financed by grants, part-time work, or wealthy families. It's a challenge to attract highly-qualified employees, even those who value public service, when the pay is markedly lower than the private sector. In rare cases, as pointed out above, the net pay may not cover the financing costs of the graduate education required to do the job. Yes, the cost of higher education needs reform. But within this context, PSLF seems to be a reasonable investment by the public sector, and investment which makes public sector work a more viable option for certain potential employees. A strategy to attract and retain (for at least 10 years) qualified, well-educated professionals to public and nonprofit jobs.

User avatar
JonnyDVM
Posts: 1583
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Jobs with Student Loan Forgiveness

Post by JonnyDVM » Sat Feb 20, 2016 12:55 pm

Whacker wrote:For folks who see PSLF as some inappropriate handout, please consider the following:

Our public and nonprofit sectors require the employ of doctors, lawyers, engineers, and other highly-educated professionals. Higher education cannot always be financed by grants, part-time work, or wealthy families. It's a challenge to attract highly-qualified employees, even those who value public service, when the pay is markedly lower than the private sector. In rare cases, as pointed out above, the net pay may not cover the financing costs of the graduate education required to do the job. Yes, the cost of higher education needs reform. But within this context, PSLF seems to be a reasonable investment by the public sector, and investment which makes public sector work a more viable option for certain potential employees. A strategy to attract and retain (for at least 10 years) qualified, well-educated professionals to public and nonprofit jobs.


I've enjoyed this discussion and I'm glad the mods allowed it to continue. I will say that numbers for loans are routinely skewed. For instance the AVMA loves to report average loan balances including those that are fortunate enough to graduate with no loans at all which obviously pulls the figure way downwards. As for PSLF- the program cannot and will not last as currently constructed. A better strategy would be to pay your public positions more in line with private sector work. Add in the benefits and holiday time off and it wouldn't be hard to convince qualified candidates to sign up. You don't want good public employees bolting after 10 years which this program basically encourages. You want them there for their entire careers. One half million dollar loan balance forgiven could hypothetically cover a significant salary increase to a public position for quite a long time. In addition, I'm convinced the current state of higher education simply cannot continue. The average loan balance of undergrad is ONLY 35k? That's a significant amount of money for someone fresh out of school in a country where your average family of four grosses 50 something thousand/ year. That also means a lot of the other money to cover tuition is coming from mom and dad and hurting their ability to save for retirement. When is the reform coming and what is it ultimately going to cost us? That's a question to which I would love to know the answer.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

User avatar
Strayshot
Posts: 275
Joined: Thu Mar 05, 2015 8:04 am
Location: New Mexico

Re: Jobs with Student Loan Forgiveness

Post by Strayshot » Sun Feb 21, 2016 10:38 am

What a fun thread to read! JonnyDVM already wrote all the posts that I would have, we are like 100% aligned on this topic, so I can't add much there.

For the OP, all I can add is to recommend that sister look into state and organization / lender specific programs for additional debt relief under qualifying situations and perks outside of the federal PLSF assistance. This can take some digging, but can potentially be a boon. Some organizations like the Peace Corps and Teach for America have special situations as well. I am not using PLSF or the state program I found (neither made financial sense) but am utilizing a lender-specific program that has been a tremendous help. Other recommendation: under no circumstances should anyone (parents or siblings etc) get involved in consigning for any loans. There was no mention of this so hopefully it hasn't happened, but this would allow the tragedy to spill into others financial lives. Once she graduates and can't sustain her lifestyle, beware for pressure to provide this kind of help.

As for her general fiscal behavior, maybe she should run for office? I also hear Wall Street has a continuing need for people with her qualities, and both of those options could pay more than her current career :moneybag

Big Dog
Posts: 578
Joined: Mon Sep 07, 2015 4:12 pm

Re: Jobs with Student Loan Forgiveness

Post by Big Dog » Sun Feb 21, 2016 12:13 pm

Our public and nonprofit sectors require the employ of doctors, lawyers, engineers, and other highly-educated professionals. Higher education cannot always be financed by grants, part-time work, or wealthy families. It's a challenge to attract highly-qualified employees, even those who value public service, when the pay is markedly lower than the private sector.


Been in a growing nonprofit for 10+ years, and we pay market rates to attract high quality people, including engineers. It can be done.

fwiw: according to the Bureau of Labor Statistics, the US currently graduates 2x as many lawyers as are needed each year. Thus, there is a massive surplus of JD's., so attracting them should be relatively easy.

(But, tbf, few non profits needs full time legal staff.)

flyingbison
Posts: 1363
Joined: Wed Mar 12, 2014 8:52 am

Re: Jobs with Student Loan Forgiveness

Post by flyingbison » Mon Feb 22, 2016 12:00 pm

JonnyDVM wrote:In addition, I'm convinced the current state of higher education simply cannot continue. The average loan balance of undergrad is ONLY 35k? That's a significant amount of money for someone fresh out of school in a country where your average family of four grosses 50 something thousand/ year.


Well, it's less than a lot of new cars, and the benefits will last much longer.

1pk3mks
Posts: 11
Joined: Fri Oct 06, 2017 6:36 pm

Re: Jobs with Student Loan Forgiveness

Post by 1pk3mks » Thu Oct 12, 2017 9:28 pm

Does anyone have a 2017 update on the PSLF program? I know it was under threat with the Trump administration.

User avatar
neurosphere
Posts: 2609
Joined: Sun Jan 17, 2010 1:55 pm
Location: NYC

Re: Jobs with Student Loan Forgiveness

Post by neurosphere » Fri Oct 13, 2017 1:11 pm

1pk3mks wrote:
Thu Oct 12, 2017 9:28 pm
Does anyone have a 2017 update on the PSLF program? I know it was under threat with the Trump administration.
This is an old thread but, and I didn't read upstream, but...

The short answer to your question is that there are no changes for anyone with existing loans. And while we can't discuss planned/proposed changes to laws until they are "final", I will say that there has never been a proposed change which would affect anyone taking out federal loans through July 2018.

When I give lectures to students and those with existing loans, I say to assume that PSLF is a given for their loans. Now, for anyone contemplating FUTURE loans, I caution that the laws which apply to not-yet-obtained loans can be changed at any time. Just like any other law.
-- Real name: Sotirios Keros. If you have to ask "Is a Target Retirement fund right for me?", the answer is yes.

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Fri Oct 13, 2017 1:47 pm

JonnyDVM wrote:
Tue Feb 16, 2016 8:30 pm
Taco Knight wrote:
Talk about a strawman argument, this strawdoctor falls flat.
http://whitecoatinvestor.com/the-doctor ... -and-pslf/

You are mistaken. This is happening. I know several people who are actively doing it. If you are an MD with 400k 500k 600k in loans and wanted to go into a position at a university where the position was PSLF eligible anyway why wouldn't you? The savings versus aggressive loan payoff are substantial. Why I don't begrudge anyone for doing it because they can, it is annoying when my wife and I worked hard to pay back what we borrow while others can borrow and then not repay the entire balance. As for it not being free- when you borrow and repay substantially less than you borrowed plus the interest you owed you are getting a deal. The money written off has to come from somewhere. I stand by my prior claim that PSLF requirements were inadvertently made too loose allowing a lot of people to qualify that the program was not really made for. I hope this doesn't end up bringing a retroactive cap that is devastating for those for whom the program was actually intended.

If you borrow 150K at 5% interest for an education the repay 10% annually of a 45k salary for a decade how much of the loan are you repaying? Not much.
I can also vouch that PSLF usage is incredibly widespread among MDs at university and university-related medical systems - both 501(c)3 organizations. I'd gladly bet that there are more MDs in the program than any other profession. Some actually start paying their loans back while they're still in school, as without substantial income their payments are effectively, if not actually, $0, and still count as qualifying towards the 120 mark. We are undoubtedly about to see individuals with hundreds of thousands of dollars in debt forgiven who are already making hundreds of thousands of dollars per year. I don't blame them - the law is the law, and we all leverage it to our advantage.

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Fri Oct 13, 2017 1:47 pm

JonnyDVM wrote:
Tue Feb 16, 2016 8:30 pm
Taco Knight wrote:
Talk about a strawman argument, this strawdoctor falls flat.
http://whitecoatinvestor.com/the-doctor ... -and-pslf/

You are mistaken. This is happening. I know several people who are actively doing it. If you are an MD with 400k 500k 600k in loans and wanted to go into a position at a university where the position was PSLF eligible anyway why wouldn't you? The savings versus aggressive loan payoff are substantial. Why I don't begrudge anyone for doing it because they can, it is annoying when my wife and I worked hard to pay back what we borrow while others can borrow and then not repay the entire balance. As for it not being free- when you borrow and repay substantially less than you borrowed plus the interest you owed you are getting a deal. The money written off has to come from somewhere. I stand by my prior claim that PSLF requirements were inadvertently made too loose allowing a lot of people to qualify that the program was not really made for. I hope this doesn't end up bringing a retroactive cap that is devastating for those for whom the program was actually intended.

If you borrow 150K at 5% interest for an education the repay 10% annually of a 45k salary for a decade how much of the loan are you repaying? Not much.
I can also vouch that PSLF usage is incredibly widespread among MDs at university and university-related medical systems - both 501(c)3 organizations. I'd gladly bet that there are more MDs in the program than any other profession. Some actually start paying their loans back while they're still in school, as without substantial income their payments are effectively, if not actually, $0, and still count as qualifying towards the 120 mark. We are undoubtedly about to see individuals with hundreds of thousands of dollars in debt forgiven who are already making hundreds of thousands of dollars per year. I don't blame them - the law is the law, and we all leverage it to our advantage.

psystal
Posts: 331
Joined: Fri Dec 18, 2015 2:44 pm

Re: Jobs with Student Loan Forgiveness

Post by psystal » Fri Oct 13, 2017 1:49 pm

ktd wrote:
Sun Feb 14, 2016 7:26 pm
I am sure laws will change for PSLF. For the income based repayment plan, she will have to pay taxes on the amount forgiven. The IRS is going to get its money no matter what.
This is not accurate. PSLF forgiveness is not considered taxable income by the IRS.

Post Reply