PSLF Grandfathering Logistics

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PSLF Grandfathering Logistics

Postby Anonymous User » Mon Nov 28, 2016 10:29 pm

I am about three years into a public service job and am planning on using PSLF. A promising job opportunity in a PSLF-ineligible job has come along, and I'm considering accepting it for the long-term career advantages it would bring. The problem is, with my debt load and the job's pay, I basically have to rely on PSLF, so it would be at most a temporary stop in my career.

I know that there is a lot of talk about PSLF going away, but I also know a lot of people watching developments in this space think the government would grandfather in people who are already working toward loan forgiveness. Does anyone have a sense (preferably based on knowledge of changes to other government programs) as to how grandfathering would likely work? Would it be based on when the relevant loans were taken out (e.g., no PSLF for loans generated after 2017)? Or is there any reason to think it could be based on whether you are currently in a PSLF-eligible job at the time the program is limited?

Thanks in advance

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zot1

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Re: PSLF Grandfathering Logistics

Postby zot1 » Mon Nov 28, 2016 10:32 pm

Don't you become ineligible when you leave? Making the time you got the loans irrelevant?

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Re: PSLF Grandfathering Logistics

Postby Anonymous User » Mon Nov 28, 2016 10:43 pm

zot1 wrote:Don't you become ineligible when you leave? Making the time you got the loans irrelevant?


OP here. I don't think so? The Department of Education's FAQ on the program says that the payments don't have to be "consecutive." (https://studentaid.ed.gov/sa/sites/defa ... stions.pdf) Am I mistaken?

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Re: PSLF Grandfathering Logistics

Postby iliketurtles123 » Mon Nov 28, 2016 10:52 pm

Anonymous User wrote:
zot1 wrote:Don't you become ineligible when you leave? Making the time you got the loans irrelevant?


OP here. I don't think so? The Department of Education's FAQ on the program says that the payments don't have to be "consecutive." (https://studentaid.ed.gov/sa/sites/defa ... stions.pdf) Am I mistaken?


No you're correct. You need 120 payments and they don't have to be consecutive

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zot1

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Re: PSLF Grandfathering Logistics

Postby zot1 » Mon Nov 28, 2016 10:56 pm

That seems right. I'm assuming if the program ended, they would want to exclude as many people as possible. I think the best way of doing that is by just letting those currently in qualifying positions to continue.

Disregarding all of that...

Department of Education wrote:Can I be certain that the PSLF Program will exist by the time I have made my 120
qualifying payments?
We cannot make any guarantees about the future availability of PSLF. The PSLF Program was created
by Congress, and Congress could change or end the PSLF Program.

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nevdash

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Re: PSLF Grandfathering Logistics

Postby nevdash » Wed Nov 30, 2016 2:43 pm

My guess is that grandfathering would be based on the date of the loan. Everyone speculating that grandfathering will happen does so partly because the program is written, in some form or another, in your master promissory note. Whether that's the case will depend on whether your loan was disbursed before or after the program is eliminated.

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Re: PSLF Grandfathering Logistics

Postby Cellar-door » Wed Nov 30, 2016 4:05 pm

If PSLF goes away there isn't any real reason to think that Congress would grandfather anything. The easiest way to do it from a legislative perspective is just to kill it. I haven't seen any real good argument why they would grandfather anything.

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A. Nony Mouse

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Re: PSLF Grandfathering Logistics

Postby A. Nony Mouse » Wed Nov 30, 2016 4:09 pm

I agree that there's no particular reason to believe there will be grandfathering. I think if there is, date of the loan would be easier to administer than being in a qualifying job. (Also because being in a qualifying job doesn't make you "on" PSLF, so that may be coloring how I see that.)

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Re: PSLF Grandfathering Logistics

Postby Anonymous User » Wed Nov 30, 2016 9:11 pm

Thanks, everyone, for the thoughts. Below is why I'm pretty confident that people working toward PSLF forgiveness will be grandfathered in. I recognize that the future's unknowable, but am I missing something?

*The Obama administration's short-lived $57k PSLF cap was to be applied prospectively only.

*The PSLF is alluded to in the master promissory notes. Even if that doesn't necessarily mean they couldn't modify/get rid of it for current borrowers, surely it would create an additional headache.

*I'm pretty sure that the government pretty regularly makes changes to programs on a prospective-only basis, for instance, Medicare.

*Even though no one is formally enrolled in PSLF like a debt-forgiveness program, students and graduates have taken on debt or let their balances grow relying on the program's continued existence. It's not hard to see how changing the program for those borrowers could be thought unfair. It would almost certainly take more political will to pass a PSLF change applicable to ALL borrowers, in contrast to just new borrowers.

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A. Nony Mouse

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Re: PSLF Grandfathering Logistics

Postby A. Nony Mouse » Thu Dec 01, 2016 12:10 am

The government can change non-criminal stuff and make it retroactive, too. They do this a lot with immigration law.

I actually agree that grandfathering is more likely, in part because it would be much simpler and avoid a lot of conflict. But I think there are arguments on BOTH SIDES and at this point everything is speculation.

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zot1

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Re: PSLF Grandfathering Logistics

Postby zot1 » Thu Dec 01, 2016 12:14 am

Screw grandfathering, I'm ready for full forgiveness.

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bearsfan23

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Re: PSLF Grandfathering Logistics

Postby bearsfan23 » Thu Dec 01, 2016 12:21 am

Is there any actual evidence of PLSF going away, not just the usual law student/lawyer hyperventilating?

Trump's proposed plan actually calls for loan forgiveness to be expanded to full forgiveness, regardless of job type, after 15 years x 12.5%.

Getting rid of PSLF isn't even discussed, so I'm wondering where all this worrying is coming from?

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A. Nony Mouse

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Re: PSLF Grandfathering Logistics

Postby A. Nony Mouse » Thu Dec 01, 2016 12:34 am

bearsfan23 wrote:Is there any actual evidence of PLSF going away, not just the usual law student/lawyer hyperventilating?

Trump's proposed plan actually calls for loan forgiveness to be expanded to full forgiveness, regardless of job type, after 15 years x 12.5%.

Getting rid of PSLF isn't even discussed, so I'm wondering where all this worrying is coming from?

I think just the fact that it's been discussed in the past under Obama, who in theory would seem more sympathetic to this kind of cause. And periodical articles like the one in the WSJ today (I couldn't get behind the paywall but it's about how much is going to get forgiven). Even if Trump is calling for forgiveness to be expanded generally, he doesn't seem like someone who'd think it's worth rewarding people for voluntarily choosing to get paid less just for the public good.

But no, at the moment there isn't a specific proposal that I know about.

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Re: PSLF Grandfathering Logistics

Postby Anonymous User » Thu Dec 01, 2016 9:49 am

A. Nony Mouse wrote:
bearsfan23 wrote:Is there any actual evidence of PLSF going away, not just the usual law student/lawyer hyperventilating?

Trump's proposed plan actually calls for loan forgiveness to be expanded to full forgiveness, regardless of job type, after 15 years x 12.5%.

Getting rid of PSLF isn't even discussed, so I'm wondering where all this worrying is coming from?

I think just the fact that it's been discussed in the past under Obama, who in theory would seem more sympathetic to this kind of cause. And periodical articles like the one in the WSJ today (I couldn't get behind the paywall but it's about how much is going to get forgiven). Even if Trump is calling for forgiveness to be expanded generally, he doesn't seem like someone who'd think it's worth rewarding people for voluntarily choosing to get paid less just for the public good.

But no, at the moment there isn't a specific proposal that I know about.


"The GAO estimates that $137 billion of the roughly $355 billion owed under income-driven repayments won’t be repaid. Most of it—the $108 billion disclosed Wednesday—would be forgiven because of borrowers fulfilling their obligations under the plans. The other $29 billion will be written off because of disability or death, the GAO projects, the only other circumstances under which the government takes a loan off its books. The government can garnish wages and Social Security checks for those in default.

And that $108 billion only covers loans made through the current school year. The overall sum could continue to grow alongside enrollment increases. The GAO said it could take 40 years to know the full costs of the programs."

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A. Nony Mouse

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Re: PSLF Grandfathering Logistics

Postby A. Nony Mouse » Thu Dec 01, 2016 10:29 am

Thanks. Though I have to wonder how much of the $137 billion that's going to be forgiven would ever have been collected. The article references the $29b discharged through death/disability, but that doesn't mean they managed to collect fully on every other student loan out there. I know you can only rarely discharge student loan debt through bankruptcy, but I have a hard time thinking the only reason the programs were instituted was to let indebted grads live an easier life - I have to presume part of the point of the programs was, it's better to get some money back on these loans than none and if the payments are manageable the gov is more likely to see some of their money.

(I find that last line kind of weird - of course the amount that's going to be forgiven is going to grow as you have new borrowers join the program; we won't ever know the full costs unless we pick a specific date on which to measure them.)

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Re: PSLF Grandfathering Logistics

Postby TLSaul2001 » Thu Dec 01, 2016 11:57 am

I just hope we know the fate of PSLF within the next year or 2. If it's going away I'm just switching to a 25 year extended fixed payment plan because under IBR my debt is going to balloon to the point where even a 15 year forgiveness plan is going to give me a ridiculous tax bill the year it's forgiven.



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