PSLF revisions: New budget proposal screws anyone in PI. Forum

[cron1834]

Also, except for the "vote out the GOP" paragraph I thoughts the ed policy staffer's post was helpful.

Agree. I get why the select spoiled rich kids ITT wouldn't like it, but the substance was helpful (presuming it's legit, I suppose!).

Dude, I grew up in a poor ass family and survived on government cheese. I now have 200k in debt and work at a 501(c)(3). Eat my penis with that bullshit.

Wasn't referring to you, but thanks for the tip.

[bjsesq]

Also, except for the "vote out the GOP" paragraph I thoughts the ed policy staffer's post was helpful.

Agree. I get why the select spoiled rich kids ITT wouldn't like it, but the substance was helpful (presuming it's legit, I suppose!).

Dude, I grew up in a poor ass family and survived on government cheese. I now have 200k in debt and work at a 501(c)(3). Eat my penis with that bullshit.

Wasn't referring to you, but thanks for the tip.

Somebody needed to stop you from poisoning the damn well.

[bjsesq]

Also, except for the "vote out the GOP" paragraph I thoughts the ed policy staffer's post was helpful.

Agree. I get why the select spoiled rich kids ITT wouldn't like it, but the substance was helpful (presuming it's legit, I suppose!).

Dude, I grew up in a poor ass family and survived on government cheese. I now have 200k in debt and work at a 501(c)(3). Eat my penis with that bullshit.

Hope it's clear that's not what I meant with my comment.

You're good.

[twenty]

The 57k forgiveness only makes sense two places, where your debt is low but your income is even lower (i.e, you really do have to be around the poverty line) or where you can't pay off your loans in a 10 year repayment, but you could repay your loans in, say, 15 years with the help of a ten-year checkpoint forgiveness.

Suppose for the sake of example, Bob opens up a legal aid non-profit and is the sole employee. He attended a local T1 for free, but had to take out 40k to cover his COA. If Bob makes around the poverty line for ten years (a huge assumption) and is content making 12 dollars an hour well into his 30s, Bob can expect that the interest on his 40k loan will have raised it to about 58k in ten years. After PSLF, that means he'll pay roughly $500.

Now suppose we have Jack, a guy who attended a T1 for close to free, but still graduated with about 80k in loans. He gets on with the feds, starts out at 60k a year, and over ten years will cap at about 90k a year. Over a ten-year repayment, Jack will have paid 112k when interest is factored in. Obviously a ten-year repayment plan for 112k worth of loans at a 60k salary is silly, so Jack says effit and goes on PAYE. Once PSLF kicks in at the ten year mark, Jack will have dropped his debt from around 85k (assuming he makes the PAYE payment only) to 27k.

Almost any other scenario it makes sense for the participant to not do PAYE and just pay off their loans as quickly as possible (i.e, if Bob starts making basically any more money) or go for the best salary possible and expect a 25-year forgiveness (i.e, if Jack gets a promotion.)

Of course, both of these scenarios assume the person's spouse is making the same amount/less than they are, since spousal income would definitely be included.

[cron1834]

Somebody needed to stop you from poisoning the damn well.

I really don't know why you're personalizing this. Your position has been more or less clear through a dozen posts in this thread, and it's not different from mine. There are only a few folks who seem to actually endorse the thrust of this change, and that's who I was referring to, particularly re: the more politicized descriptions. I may not be a successful LS grad like you, but my RC skills are at least somewhat functional, dude.

[04102014]

I've always supported the Democratic Party. But, this is the President's budget. I feel betrayed. This is really testing my faith in the party; and if these changes end up applying to people who already took out loans I'll never vote Democrat again. I'm not changing parties, I'm just not going to vote.

I'm a staffer for a Member of Congress and I work on education policy. First—the President's budget request is dead on arrival. However, as has been pointed out by other posters, specific ideas and proposals from the president's request can and have been incorporated into budget resolutions passed by the House and Senate. The vast majority don't. For example, the President has proposed a number of changes in the K-12 Ed budget since his first budget request in 2009 that congress has simply ignored.

The fact that this proposal would save money and could be used as a "pay-for" (all new spending must be "paid-for" by cuts or increased revenue) does make it far more likely to get slipped into an otherwise unrelated bill. But at least in the near term, there will be no grand bargain and there don't appear to be any upcoming budget showdowns that would require further savings to be squeezed from the margins. The Budget Control Act, which gave us the sequester, eliminated subsidized stafford loans for grad students in order to reduce spending. It did not apply retroactively and only began applying to loans taken out for the following academic year.

It is unlikely this part of the budget will be enacted within the next year and I can say almost unequivocally that it will not apply retroactively.

If there's one thing that would make enactment of this proposal more likely, its be a big midterm victory for the GOP this fall. If you care about protecting this program and higher ed opportunities for yourselves and future students, volunteer your time to protect the current majority in the Senate and prevent the GOP from gaining seats in the House. It may be easy to gloss over the differences between the national parties if you are not paying very close attention, however, one party clearly believes that individuals and communities should be on their own in almost all matters while the other believes that investments in individuals and communities can pay dividends for society as a whole in addition to those specific individuals and communities.

The public service and health loan forgiveness programs were not created primarily to benefit individual students. It has been determined that there are a shortage of lawyers and doctors practicing in certain areas and fields, and that society would benefit if the government incentivized young professionals to enter these fields.

The staffer's point is totally undermined because of the bolded/below, which went v under appreciated:

this is the President's budget

[bjsesq]

Somebody needed to stop you from poisoning the damn well.

I really don't know why you're personalizing this. Your position has been more or less clear through a dozen posts in this thread, and it's not different from mine. There are only a few folks who seem to actually endorse the thrust of this change, and that's who I was referring to, particularly re: the more politicized descriptions. I may not be a successful LS grad like you, but my RC skills are at least somewhat functional, dude.

You take shots at "select spoiled rich kids" who "don't like" his post, so expect people to react. Considering two of us took issue with it, what would any person with common sense think?

[sidhesadie]

*I do have skin in the game, btw, my wife is PSLF and this change will almost definitely mean that, even if we file separately, we will lose out on 6 figures of COD.

Wasn't sure if this got picked back up later in the thread, (still trying to sort through it all) but just wanted to make sure it's clear this plan eliminates the ability to file separately and have only the borrower's income used for PAYE/IBR. If married, BOTH incomes MUST be included. They are calling it "Closing the loophole that allowed borrowers to exclude spouse's income".

Regardless of how much of the rest of this gets through, I can definitely see that piece making it, which will make many borrowers totally ineligible for IBR/ PAYE, and debts other than federal student loans aren't factored in at all (you know, like if your spouses income covers mortgage, child care, has their own non-federal student loans, etc.)

[sidhesadie]

I've always supported the Democratic Party. But, this is the President's budget. I feel betrayed. This is really testing my faith in the party; and if these changes end up applying to people who already took out loans I'll never vote Democrat again. I'm not changing parties, I'm just not going to vote.

I'm a staffer for a Member of Congress and I work on education policy. First—the President's budget request is dead on arrival. However, as has been pointed out by other posters, specific ideas and proposals from the president's request can and have been incorporated into budget resolutions passed by the House and Senate. The vast majority don't. For example, the President has proposed a number of changes in the K-12 Ed budget since his first budget request in 2009 that congress has simply ignored.

The fact that this proposal would save money and could be used as a "pay-for" (all new spending must be "paid-for" by cuts or increased revenue) does make it far more likely to get slipped into an otherwise unrelated bill. But at least in the near term, there will be no grand bargain and there don't appear to be any upcoming budget showdowns that would require further savings to be squeezed from the margins. The Budget Control Act, which gave us the sequester, eliminated subsidized stafford loans for grad students in order to reduce spending. It did not apply retroactively and only began applying to loans taken out for the following academic year.

It is unlikely this part of the budget will be enacted within the next year and I can say almost unequivocally that it will not apply retroactively.

If there's one thing that would make enactment of this proposal more likely, its be a big midterm victory for the GOP this fall. If you care about protecting this program and higher ed opportunities for yourselves and future students, volunteer your time to protect the current majority in the Senate and prevent the GOP from gaining seats in the House. It may be easy to gloss over the differences between the national parties if you are not paying very close attention, however, one party clearly believes that individuals and communities should be on their own in almost all matters while the other believes that investments in individuals and communities can pay dividends for society as a whole in addition to those specific individuals and communities.

The public service and health loan forgiveness programs were not created primarily to benefit individual students. It has been determined that there are a shortage of lawyers and doctors practicing in certain areas and fields, and that society would benefit if the government incentivized young professionals to enter these fields.

The staffer's point is totally undermined because of the bolded/below, which went v under appreciated:

this is the President's budget

Not to mention all I hear this staffer saying is, "this whole thing will never pass. There's a chance that down the road, the House and Senate (particularly if Repubs retake control) might slip some of this in other bills. If they do, ha, we can't stop them because it's the president's plan. But they probably won't. But if they do, we'll make sure to blame it on them and ignore the fact it was in the president's plan to begin with. We'll scream about how the "slipped it into" an "unrelated bill". You'll forget by then it was our idea."

[patogordo]

*I do have skin in the game, btw, my wife is PSLF and this change will almost definitely mean that, even if we file separately, we will lose out on 6 figures of COD.

Wasn't sure if this got picked back up later in the thread, (still trying to sort through it all) but just wanted to make sure it's clear this plan eliminates the ability to file separately and have only the borrower's income used for PAYE/IBR. If married, BOTH incomes MUST be included. They are calling it "Closing the loophole that allowed borrowers to exclude spouse's income".

Regardless of how much of the rest of this gets through, I can definitely see that piece making it, which will make many borrowers totally ineligible for IBR/ PAYE, and debts other than federal student loans aren't factored in at all (you know, like if your spouses income covers mortgage, child care, has their own non-federal student loans, etc.)

yea this part is really gonna blow. my spouse has private student loans that don't count if we file jointly but her income still counts against as if it were all going to federal loans.

[twenty]

this is the President's budget

At the risk of coming across as someone who angrily masturbates while watching MSNBC, that's actually what concerns me the most. If it was some old Republican congressman who had very little say in the budget process running around trying to get those damn welfare kids off the government's dole, then hey, who cares. But Obama's been the biggest supporter of PAYE/PSLF all these years, and to suddenly (even hypothetically) suggest that the rug should be pulled out from underneath everyone is very scary.

[dresden doll]

There's a big fricking difference between being in the clear after 10 years and 25 years. Good luck buying a house or any other major purchase while that monster is growing.

why wouldn't you be able to buy a house/car/whatever? as long as your debt payments are low you'll still have a good debt-to-income ratio.

I probably misspoke on that bit really. Still, I think it's ridiculous to say "well you were clear after 10 but at least you have the option to do it in 25". That's another 15 years of required payments, another 15 years of wondering whether you'll be subject to budget cuts or lack of grant funding.

Don't worry. Those who wanted to understood your point just fine.

[patogordo]

There's a big fricking difference between being in the clear after 10 years and 25 years. Good luck buying a house or any other major purchase while that monster is growing.

why wouldn't you be able to buy a house/car/whatever? as long as your debt payments are low you'll still have a good debt-to-income ratio.

I probably misspoke on that bit really. Still, I think it's ridiculous to say "well you were clear after 10 but at least you have the option to do it in 25". That's another 15 years of required payments, another 15 years of wondering whether you'll be subject to budget cuts or lack of grant funding.

Don't worry. Those who wanted to understood your point just fine.

lol

[patogordo]

this is the President's budget

At the risk of coming across as someone who angrily masturbates while watching MSNBC, that's actually what concerns me the most. If it was some old Republican congressman who had very little say in the budget process running around trying to get those damn welfare kids off the government's dole, then hey, who cares. But Obama's been the biggest supporter of PAYE/PSLF all these years, and to suddenly (even hypothetically) suggest that the rug should be pulled out from underneath everyone is very scary.

well, he was a big supporter of PAYE/PSLF while it wasn't costing any money. now that it's showing up on the ledger he's throwing us under the bus. not a big surprise. what we need to do is encourage more 60-year-olds to go to law school.

[Tiago Splitter]

Of course, both of these scenarios assume the person's spouse is making the same amount/less than they are, since spousal income would definitely be included.

Does this mean that there is actually a benefit to getting married if your spouse makes less than you? Or is it just the greater of 1) your income or 2) your income plus your spouse's income divided by 2?

[dresden doll]

^^^Really don't get what's lulzy. The difference between 10 and 25 years is huge no matter what, particularly if you're living in fear of being screwed retroactively.

[Nomo]

The petition has over 6,000 signatures so far. It needs more. Please sign and post to your social media accounts. Please contact your senators and congressperson.

Elected officials need to know we're here and we're angry.

https://petitions.whitehouse.gov/petiti ... t/wkqnqBCH

[patogordo]

Of course, both of these scenarios assume the person's spouse is making the same amount/less than they are, since spousal income would definitely be included.

Does this mean that there is actually a benefit to getting married if your spouse makes less than you? Or is it just the greater of 1) your income or 2) your income plus your spouse's income divided by 2?

income doesn't get divided. the only benefit is you get to use the higher poverty guideline for a family of 2 instead of 1. but that's only about a 30% increase.

[Tiago Splitter]

Of course, both of these scenarios assume the person's spouse is making the same amount/less than they are, since spousal income would definitely be included.

Does this mean that there is actually a benefit to getting married if your spouse makes less than you? Or is it just the greater of 1) your income or 2) your income plus your spouse's income divided by 2?

income doesn't get divided. the only benefit is you get to use the higher poverty guideline for a family of 2 instead of 1. but that's only about a 30% increase.

I see. I don't know how anyone planning on PSLF can get married right now. Or anyone looking to use PAYE really.

[Tanicius]

*I do have skin in the game, btw, my wife is PSLF and this change will almost definitely mean that, even if we file separately, we will lose out on 6 figures of COD.

Wasn't sure if this got picked back up later in the thread, (still trying to sort through it all) but just wanted to make sure it's clear this plan eliminates the ability to file separately and have only the borrower's income used for PAYE/IBR. If married, BOTH incomes MUST be included. They are calling it "Closing the loophole that allowed borrowers to exclude spouse's income".

Regardless of how much of the rest of this gets through, I can definitely see that piece making it, which will make many borrowers totally ineligible for IBR/ PAYE, and debts other than federal student loans aren't factored in at all (you know, like if your spouses income covers mortgage, child care, has their own non-federal student loans, etc.)

yea this part is really gonna blow. my spouse has private student loans that don't count if we file jointly but her income still counts against as if it were all going to federal loans.

My SO is going into secondary ed teaching. So she'll probably be making a little less than I will. Under the proposal, does it still work where at least you cut the combined income in half to determine to IBR eligibility?

[anyriotgirl]

Of course, both of these scenarios assume the person's spouse is making the same amount/less than they are, since spousal income would definitely be included.

Does this mean that there is actually a benefit to getting married if your spouse makes less than you? Or is it just the greater of 1) your income or 2) your income plus your spouse's income divided by 2?

income doesn't get divided. the only benefit is you get to use the higher poverty guideline for a family of 2 instead of 1. but that's only about a 30% increase.

I see. I don't know how anyone planning on PSLF can get married right now. Or anyone looking to use PAYE really.

finally, a benefit of spinsterhood !

[dresden doll]

I think it's clear that marriage will be a pipeline dream for the PI-oriented among us if this passes.

[patogordo]

*I do have skin in the game, btw, my wife is PSLF and this change will almost definitely mean that, even if we file separately, we will lose out on 6 figures of COD.

Wasn't sure if this got picked back up later in the thread, (still trying to sort through it all) but just wanted to make sure it's clear this plan eliminates the ability to file separately and have only the borrower's income used for PAYE/IBR. If married, BOTH incomes MUST be included. They are calling it "Closing the loophole that allowed borrowers to exclude spouse's income".

Regardless of how much of the rest of this gets through, I can definitely see that piece making it, which will make many borrowers totally ineligible for IBR/ PAYE, and debts other than federal student loans aren't factored in at all (you know, like if your spouses income covers mortgage, child care, has their own non-federal student loans, etc.)

yea this part is really gonna blow. my spouse has private student loans that don't count if we file jointly but her income still counts against as if it were all going to federal loans.

My SO is going into secondary ed teaching. So she'll probably be making a little less than I will. Under the proposal, does it still work where at least you cut the combined income in half to determine to IBR eligibility?

under the current system, if you file separately then 1/2 of your combined income counts for IBR purposes. i'm assuming that's what they are proposing to eliminate. obviously they can't make you file taxes jointly but i guess you will have to provide both incomes for IBR purposes? not sure exactly.

[D. H2Oman]

Of course, both of these scenarios assume the person's spouse is making the same amount/less than they are, since spousal income would definitely be included.

Does this mean that there is actually a benefit to getting married if your spouse makes less than you? Or is it just the greater of 1) your income or 2) your income plus your spouse's income divided by 2?

income doesn't get divided. the only benefit is you get to use the higher poverty guideline for a family of 2 instead of 1. but that's only about a 30% increase.

I see. I don't know how anyone planning on PSLF can get married right now. Or anyone looking to use PAYE really.

So everyone who wants to block this, write your red state senators about Obama's budget penalizing
marriage.


TLSPAC

[Cal Trask]

I think it's clear that marriage will be a pipeline dream for the PI-oriented among us if this passes.

"Only 18 years until we can finally tie the knot."