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

[patogordo]

If I get divorced, husband could get deported. So wait until he gets citizenship, then divorce, then profit?

Flee to his country (if nonextradition treaty), stay married, then profit.

What if I wait until he is a US citizen, then renounce my own citizenship and flee to his country, then if I want to come back I apply for a spousal visa through him?

I might make some poor immigration lawyer's head explode with that plan.

Divorce him after he gains citizenship, flee to his country, remarry him under forged documents (removing all of your debts), and apply for a spousal visa.

better burn your fingerprints off if you want to get back through everify

[Tiago Splitter]

Never thought I'd need to post this in an on topic forum but per Wikipedia:

Common-law marriage can still be contracted in nine states (Alabama, Colorado, Kansas, Rhode Island, South Carolina, Iowa, Montana, Utah and Texas) and the District of Columbia

[rinkrat19]

finally, a benefit of spinsterhood !

[kay2016]

Never thought I'd need to post this in an on topic forum but per Wikipedia:

Common-law marriage can still be contracted in nine states (Alabama, Colorado, Kansas, Rhode Island, South Carolina, Iowa, Montana, Utah and Texas) and the District of Columbia

Never would've thought that it's now going to be me convincing the bf that we shouldn't get married…

[nenydcusc]

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

My apologies, I actually had intended to include an "in my view" at the beginning of the stump speech paragraph. For what it's worth, I am posting as a 0L that will be counting on the PSLF program's continued existence so I can return to public interest work after school.

Party politics is messy business and while I generally support President Obama overall I strongly disagree with many things he has done or proposed. Despite being called a socialist, communist, etc by some, he is pretty solidly aligned with the centrist wing of the Democratic party. I certainly oppose these changes (not just out of self interest) and I can assure you most Democrats in congress would oppose them as well. This is the first time in years that Obama did not include a proposal to reduce Social Security benefits in the budget. Most congressional Dems very publicly oppose that SS proposal but many support it. For better or worse, right now Democrats are a "big-tent" party, which requires a lot of compromise in order to secure a winning coalition, while the GOP tends to require near lock-step agreement on all issues which makes it much more difficult to cobble together a majority, but on the plus side this makes party unity on floor votes much easier.

In my opinion, most Congressional Dems would have to find a significant number of critical investments investments in any bill that would also slash PSLF before supporting it. On the other hand, I don't think most GOPers in Congress would have to think twice before voting for a bill that would slash PSLF.

Anyway, politics aside, just wanted to add my 2-cents to reassure people that are freaking out that these changes could happen but it is pretty unlikely.

[FinanceStudent28]

You should still vote. Politicians don't try to pander to groups that don't vote. Vote for the Green Party or whatever third party you want, but still vote.

OT, but voting for the Green Party is a waste of the hour or so you'll spend traveling and waiting in line, etc. Go read a book, work out, or something else productive.

It's just like voting for Romney in New York, or voting for Obama in Alabama, a big waste of time.

Until we get one person=one vote I'll be staying at home (for Pres election.) Unless I move to a swing state, they're the only voters that matter.

http://www.nationalpopularvote.com/

[The Dark Shepard]

You should still vote. Politicians don't try to pander to groups that don't vote. Vote for the Green Party or whatever third party you want, but still vote.

OT, but voting for the Green Party is a waste of the hour or so you'll spend traveling and waiting in line, etc. Go read a book, work out, or something else productive.

It's just like voting for Romney in New York, or voting for Obama in Alabama, a big waste of time.

Until we get one person=one vote I'll be staying at home (for Pres election.) Unless I move to a swing state, they're the only voters that matter.

http://www.nationalpopularvote.com/

That's only if none of the races can swing either way though. For instance, in 2012 I voted in Missouri. Obama had no shot there, but everyone thought the Senate race would be a close one. So it was still worth going to vote

Also, if you ARE in a swing state and DON'T vote, you are an asshole

[smaug_]

Also, if you ARE in a swing state and DON'T vote, you are an asshole

[dresden doll]

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.

If anything, that's support for the argument that current students will get screwed because that was a place students were screwed before. Students applied to graduate school expecting to be able to have subsidized loans, and then halfway through their program, "oh, no, just kidding, next years' loans are going to be unsubsidized at higher interest rates, hth."

I think that, realistically, both those who already graduated and those who are graduating this year won't be affected. I wouldn't put my money down on 2Ls and 1Ls escaping it, although I don't think it's likely they'll be affected either. If I had to guess, I'd say that they'd link the gutting of PSLF to that 2015 date they've projected as the date on which repayment programs' terms would change.

All in all, I think the only people who are totally in the clear are those whose are set to be forgiven in 2017/2018. I don't see any retroactive gutting happening in time to catch them. But I wouldn't be surprised if someone took a good hard look at the program around 2020 and decided that it was simply costing taxpayers too much not to do some level of adjusting for every beneficiary under the sun.

That's my worst case scenario, though. I can't imagine that PSLF won't be gutted in years to come (and I'd also intuit that the "married filing separately" rule will change in due time), but I do think it would take quite a lot for politicians to go retroactive.

[anyriotgirl]

You should still vote. Politicians don't try to pander to groups that don't vote. Vote for the Green Party or whatever third party you want, but still vote.

OT, but voting for the Green Party is a waste of the hour or so you'll spend traveling and waiting in line, etc. Go read a book, work out, or something else productive.

It's just like voting for Romney in New York, or voting for Obama in Alabama, a big waste of time.

Until we get one person=one vote I'll be staying at home (for Pres election.) Unless I move to a swing state, they're the only voters that matter.

http://www.nationalpopularvote.com/

My point with the "pointless" voting isn't swinging elections. The point of voting for the Green party or whatever as far as this discussion goes is getting our demographic (young, educated people) to be seen as a group whose interests are worth supporting politically. Why do you think SS and Medicare continue to go untouched? Because retired people vote. Our political interests (PLSF in this case, but plenty of other stuff) will only be addressed if we make them worth addressing-- ie: a politician could lose his/her job for not adequately doing so.

[dresden doll]

My point with the "pointless" voting isn't swinging elections. The point of voting for the Green party or whatever as far as this discussion goes is getting our demographic (young, educated people) to be seen as a group whose interests are worth supporting politically. Why do you think SS and Medicare continue to go untouched? Because retired people vote. Our political interests (PLSF in this case, but plenty of other stuff) will only be addressed if we make them worth addressing-- ie: a politician could lose his/her job for not adequately doing so.

I do think this is true. As enraged as I am with the president, political apathy never solved anything.

I recently had the opportunity to meet with my Congress rep as part of my work, and I will sure as hell be contacting her about this.

[gma221]

I haven't read through all 14 pages of this thread, so my apologies if someone has already shared this, but I just saw this whitehouse.gov petition being circulated on Facebook: http://wh.gov/ly4yq

Maybe the OP could move this up to page 1?

ETA: Whoops -- just found the separate thread about this.

[LSL]

In before the "divorcee loophole" is discovered and we're required to count "all household income" (regardless of spouse).

[Bikeflip]

Relevant: Table S–9. Mandatory and Receipt Proposals

Provide exclusion from income for student loan forgiveness for students in certain income- based or income-contingent repayment programs who have completed payment obligations.

[dallaseagle]

Found this discussion board by googling pslf given the scary Obama Budget proposal. I read every single post so far. Here is my contribution to the discussion:

For those who are done with school and working in public service under an IBR (15%): If, after all the dust settles, the choices for you are: 1) keep paying 15% and receive 100% of the remaining balance forgiven tax-free after payment #120 or 2) reduce to 10% by switching to PAYE but have your balance reduced after payment #120 by $57,500 tax-free--which of these do you prefer and why?

I'm leaning 15% with 100% but that's because $160k is going to be $100k after 10 years for me (using bankrate loan calculator--keep in mind these figures are going to be worth about 20-30% less in 10 years due to inflation plus our salaries are going to be about 20-30% higher, so that helps too), but 10% with $57.5k cap would be $140k after 10 years, leaving me with about $85k (all ballpark).

Of course the best option would be if they let you switch to PAYE AND have 100% forgiveness, in which case I'd have $140k of my $160k forgiven in 2024 (fat chance of that happening). The only way I see that happening is if Obama administratively (executive action) allows all income-sensitive repayment plans to choose from among each other (IBR's can switch to PAYE with its 10% payment feature), followed later by a cap to PSLF for all loans taken out after the legislation's effective date. That would be our grand slam home run in all of this, because we are not going to be coasting thru to 2024 without any changes. Changes are coming.

So choice 1 or choice 2 everybody and why?

P.S.: It's right in my rights and responsibilities section of my Promissory Note that my debt is forgiven after 120 payments if in PSLF, not just $57,500 of it. Can't mess with a contract, bro. lol. (hat tip to Heather Jarvis).

P.P.S.: Thanks to the Democratic Congressional staffer for calming us down with some sensible insight.

[Hipster but Athletic]

You should still vote. Politicians don't try to pander to groups that don't vote. Vote for the Green Party or whatever third party you want, but still vote.

OT, but voting for the Green Party is a waste of the hour or so you'll spend traveling and waiting in line, etc. Go read a book, work out, or something else productive.

It's just like voting for Romney in New York, or voting for Obama in Alabama, a big waste of time.

Until we get one person=one vote I'll be staying at home (for Pres election.) Unless I move to a swing state, they're the only voters that matter.

http://www.nationalpopularvote.com/

My point with the "pointless" voting isn't swinging elections. The point of voting for the Green party or whatever as far as this discussion goes is getting our demographic (young, educated people) to be seen as a group whose interests are worth supporting politically. Why do you think SS and Medicare continue to go untouched? Because retired people vote. Our political interests (PLSF in this case, but plenty of other stuff) will only be addressed if we make them worth addressing-- ie: a politician could lose his/her job for not adequately doing so.

But young people's interests are not aligned if some are randomly supporting the green party, bro. You think that populist dems don't try to steal young votes right now? It's just hard because not everyone our age is completely greedy yet and willing to say "fuck the country, we deserve xyz" (like old people do with social security or whatever). And our interests are so mix & matched across parties that it ends up not really mattering at all.

[Dingo Starr]

But young people's interests are not aligned if some are randomly supporting the green party, bro. You think that populist dems don't try to steal young votes right now? It's just hard because not everyone our age is completely greedy yet and willing to say "fuck the country, we deserve xyz" (like old people do with social security or whatever). And our interests are so mix & matched across parties that it ends up not really mattering at all.

Heartfelt post from HbA?
Don't lose your shtick now, you were just getting good at it.

[cron1834]

I agree that voting ain't shit. Even if that weren't the case, political science 101 suggests that cross cutting cleavages, a large number of veto points, and regional jurisdictions mean incremental improvements at best. If you want to get $$ from the system, you need to grease the wheels with $$.

House of Cards notwithstanding.

[Tiago Splitter]

Relevant: Table S–9. Mandatory and Receipt Proposals

Provide exclusion from income for student loan forgiveness for students in certain income- based or income-contingent repayment programs who have completed payment obligations.

Said this in the other threat, but given the tiny amount this supposedly adds to the deficit I don't see how it could make anyone optimistic.

P.S.: It's right in my rights and responsibilities section of my Promissory Note that my debt is forgiven after 120 payments if in PSLF, not just $57,500 of it. Can't mess with a contract, bro. lol. (hat tip to Heather Jarvis).

As Jarvis pointed out, page 7 of the MPN says "Under [PSLF], the remaining balance on your loans MAY be cancelled after you have made 120 payments on those loans."

http://www.direct.ed.gov/pubs/dlmpn.pdf

[nouseforaname123]

For what it's worth, I am posting as a 0L that will be counting on the PSLF program's continued existence so I can return to public interest work after school.

Precisely why these programs will be done away with. Absent special circumstances, you could probably attend a less prestigious law school at a significantly lower cost and still return to public interest work.

Future "public servants" intentionally consuming limited public resources when it isn't absolutely necessary is one of the big problems with these programs.

[dallaseagle]

Relevant: Table S–9. Mandatory and Receipt Proposals

Provide exclusion from income for student loan forgiveness for students in certain income- based or income-contingent repayment programs who have completed payment obligations.

Said this in the other threat, but given the tiny amount this supposedly adds to the deficit I don't see how it could make anyone optimistic.

P.S.: It's right in my rights and responsibilities section of my Promissory Note that my debt is forgiven after 120 payments if in PSLF, not just $57,500 of it. Can't mess with a contract, bro. lol. (hat tip to Heather Jarvis).

As Jarvis pointed out, page 7 of the MPN says "Under [PSLF], the remaining balance on your loans MAY be cancelled after you have made 120 payments on those loans."

http://www.direct.ed.gov/pubs/dlmpn.pdf

On page 8 toward the end of the Borrower's Rights and Responsibilities Statement that is incorporated into the MPN, it says: "A Public Service Loan Forgiveness program is available that provides for the cancellation of the remaining balance due on your eligible Direct Loan Program loans after you have made 120 full, on-time, scheduled monthly payments (after October 1, 2007) on those loans under certain repayment plans while you are employed full-time by certain public service organizations."

Plus I can't find your quote in the fine print on my MPN. It's not on my MPN as your wording does not appear on the consolidation loan MPN, which is what I have. Your quote is from the Direct Loan MPN.

[linkx13]

Tagged 4 ever

[Young Marino]

I was reading Heather Jarvis' take on this issue and it looks like no changes will be happening soon as Obama's proposal seems unlikely to pass. Further, she emphasizes that this proposal would impact new borrowers, not current students or grads. So I'm guessing that this would effect mainly kids without student loan debt going into law school or newly minted college freshmen? I'm hoping this means that as a 0L without student loan debt, I can still take advantage of PSLF as is so long as nothing is passed by August? Might just be wishful thinking though lol

[Big Dog]

Public Service Loan Forgiveness is established by statutory law. It would take an act of Congress to change it. - See more at: http://askheatherjarvis.com/blog/will-p ... DlQv7.dpuf

Well, duh. Loan forgiveness is a tax item, and by definition -- not to mention the Constitution -- Congress is in charge of taxes. While Heather might not believe Congress would make a tax change retroactively, and it maybe uncommon, it does happen. Buyer beware.

[hausmaus]

I got a response from the Dept. of Ed. budget office today.

The take away was that it's just a proposal, but if Congress enacted this proposal, it'd limit everyone's PSLF to the independent undergraduate student cap including former graduate students.