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

[chneyo]

...

[cotiger]

I think the biggest issue is that it would not be grandfathered in. Whether or not you think PSLF is a good idea, hopefully you can recognize that it's grossly unjust to change the rules on people after encouraging them to take on large amounts of debt by promising forgiveness.

[Tiago Splitter]

This opinion will be unpopular but, whatever: Why should your debt be forgiven just because you chose to do PI? If you borrow money, pay it back.

so you don't think it's a problem if lawyers stop being willing to enter the public sector because no one can service their debt on the salaries offered?

A little too hyperbolic. I would have played the reliance card there myself.

Someone posted in the PAYE legislation thread that the aggregate cap for graduate students is 138k rather than the 57.5k for undergrads. This seems like a more reasonable number although the budget proposal doesn't seem to distinguish between grad and undergrad.

[Winter is Coming]

This would completely change how to measure certain LRAPs between schools. If something like this passes Georgetown’s would be essentially worthless, while somewhere like Cornell’s (which as far as I can tell allows you to stay on the 10 year standard plan while working in PI without necessarily dovetailing with PSLF) becomes a lot more attractive.

[Tiago Splitter]

This would completely change how to measure certain LRAPs between schools. If something like this passes Georgetown’s would be essentially worthless, while somewhere like Cornell’s (which as far as I can tell allows you to stay on the 10 year standard plan while working in PI without necessarily dovetailing with PSLF) becomes a lot more attractive.

I think it's safe to say that LRAPs would be transformed if anything like this passes.

[chneyo]

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[Winter is Coming]

This would completely change how to measure certain LRAPs between schools. If something like this passes Georgetown’s would be essentially worthless, while somewhere like Cornell’s (which as far as I can tell allows you to stay on the 10 year standard plan while working in PI without necessarily dovetailing with PSLF) becomes a lot more attractive.

I think it's safe to say that LRAPs would be transformed if anything like this passes.

I think for sure you're right, but its just crazy talking about this amount of debt and not having any idea what the program may actually look like when you enter repayment (especially if a certain LRAP is factor in deciding which school to attend).

[A. Nony Mouse]

This opinion will be unpopular but, whatever: Why should your debt be forgiven just because you chose to do PI? If you borrow money, pay it back.

I, in general, agree with this. The whole "best and brightest" discouraged from PI thing is somewhat ridiculous. The best and the brightest (top GPAs, top LSATs) often have full-ride offers at CCN, MVP, or the regional of their choice. So this would discouarge some from attending HYS (boohoo) and some other mediocre performers from PI (sure). But, it also targets people that are willing to take out ungodly loans at TTT who use low-level government/other non-prestigious PI jobs as a way to avoid paying them back. Work with government/PI lawyers sometime... there are MANY not worth their weight in the loan money we forgive.

The whole system needs restructured. Until then, this might be a good first step.

I do work with government lawyers, since I am one, thank you.

I agree that there are problems with forgiveness (generally, not just PSLF), in the sense that it's part of what encourages law schools to jack up tuition. But I do think that the cap on PSLF will limit those going into PI to people who can afford to pay for law school (or whose families can) or people who can get a full ride, and TLS-think aside, I think the latter isn't a great option for the profession because it's not as large a number as TLS seems to think. As for the TTT schools, I'd rather target them directly (alter lending practices, change accreditation requirements, shut them down) than penalize people who come out of those schools with debt who actually end up in PI.

[Mount Elbrus]

My view is based on the fact that I did make the choice to attend the lower ranked school with no debt. I intended to, and did, go into public service.

[cotiger]

I think the biggest issue is that it would not be grandfathered in. Whether or not you think PSLF is a good idea, hopefully you can recognize that it's grossly unjust to change the rules on people after encouraging them to take on large amounts of debt by promising forgiveness.

Tell that to the military retirees who just saw their retirement pay cut, or the Detroit public workers who might not see a pension at all, or those at (insert a struggling company/industry... GM comes to mind) who have watched thier benefits shrink year-by-year so that they can keep thier job.

You're right, it's not "fair" to allow people to enter into a field based on government promises that prove unsustainable... but my mom used to have a saying about life and "fairness"...

Big differences between those examples and this one.

1. "The current military retirement system, even with the budget deal's COLA reductions, is far more generous than was promised to current retirees when they joined the armed forces." The whole point is that current PSLF people made decisions based on the promises of old law and then would be massively screwed by not grandfathering. Military retirees are coming out ahead of where they were promised when they made the decision to sign up.. they're just complaining about coming out less ahead. They're just getting cost of living adjustment lowered by 1%.

Also, in general there's a big difference between giving less generous benefits and encouraging taking on life-ruining amounts of debt and then reneging.

http://www.usnews.com/opinion/articles/ ... y-retirees

2. Detroit is literally bankrupt. It has no money to pay.

3. Private companies are private.

[timbs4339]

lol at that definition of "best and the brightest." Meritocracy run amok.

[DrStudMuffin]

I think the biggest issue is that it would not be grandfathered in. Whether or not you think PSLF is a good idea, hopefully you can recognize that it's grossly unjust to change the rules on people after encouraging them to take on large amounts of debt by promising forgiveness.

Tell that to the military retirees who just saw their retirement pay cut, or the Detroit public workers who might not see a pension at all, or those at (insert a struggling company/industry... GM comes to mind) who have watched thier benefits shrink year-by-year so that they can keep thier job.

You're right, it's not "fair" to allow people to enter into a field based on government promises that prove unsustainable... but my mom used to have a saying about life and "fairness"...

Big differences between those examples and this one.

1. "The current military retirement system, even with the budget deal's COLA reductions, is far more generous than was promised to current retirees when they joined the armed forces." It lowers cost of living adjustment by 1%. The whole point is that current PSLF people made decisions based on the promises of old law and then would be massively screwed by not grandfathering. Military retirees are coming out ahead of where they were promised when they made the decision to sign up.. they're just complaining about coming out less ahead.

Also, in general there's a big difference between giving less generous benefits and encouraging taking on life-ruining amounts of debt and then reneging.

http://www.usnews.com/opinion/articles/ ... y-retirees

2. Detroit is literally bankrupt. It has no money to pay.

3. Private companies are private.

I agree with the bolded. The examples you (chneyo) cite are not analogous to this one, or at least not analogous where it matters most.

[dobryden]

Wait, I was under the impression that under this proposal, anyone who borrowed before July 2015 would not be affected by this program. Is that not true?

[bananatopia]

deleted

[Hrun]

Anyone applying this year now basing their decision on the possibility that something like this happens in the future? Law Schools that don't have their LRAP tied to IBR or PAYE look much more attractive now.

[chneyo]

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[timbs4339]

Heffer and Muffin Top... Of course there are big differences. I wasn't holding up those examples as being anagolous to this situation. I was simply holding them up to say sometimes life isn't fair, and someone always ends up footing the bill. In this instance, it may be those who thought they'd take out $200 grand in loans and then have them dismissed.

Also, timbs4339... If you look at my LSN profile, you'll see I also don't buy into the definition I used (GPA/LSAT) for "best and brightest." However, I'm looking at the audience... and for the most part, that's what TLS users consider to be TRUTH.

Look, all I'm saying is that changes need to be made and that this one doesn't seem to be wholly unworthy of consideration.
Nit pick that all you want.

Nope. It was a stupid fucking comment and you should feel bad. Getting three fewer questions right on the LSAT or a couple less points in GPA (entirely explainable based on random factors) doesn't suddenly make you ineligible to be treated with basic fairness. "Hurr durr gubmit lawyers don't deserve my money" is boomer nonsense. People going into PI in the last few years have fantastic resumes.

The way to fix the problems with the system is to go after the law schools and reduce the price they charge upfront, not to indirectly try to influence applicant behavior by screwing over a bunch of naive young people who have already taken on immense debts. Vindictiveness and some weird Social Darwinistic worldview does not a good policy make.

[Big Dog]

The fact that law degrees/medical degrees do cost 150k+ would hopefully be a reason for someone important to make the argument "hey, we may in fact be screwing a lot of people here with this."

Nope. Because...

I'm often the first to recommend a T14 at sticker over a regional for a full ride when it comes to PI

Inexpensive law schools do exists down the food chain. So what if a few hundred PI's at NYU are impacted....in the larger picture of things, why should the taxpayers front the money so a few hundred can live in Manhattan for a few years?

(Not picking on NYU, but just using it an example bcos of its large PI program.)

[Bikeflip]

The fact that law degrees/medical degrees do cost 150k+ would hopefully be a reason for someone important to make the argument "hey, we may in fact be screwing a lot of people here with this."

Nope. Because...

Yeah "save the young lawyer and young doctors from debt!" is not a great political talking point no matter how you spin it.

[Big Dog]

^^more importantly, its not good public policy!

Doctors have virtually guaranteed jobs for live -- unemployment is only for those that desire it. And we have waaaay too many JD grads to support. Less is more.

[anyriotgirl]

^^more importantly, its not good public policy!

Doctors have virtually guaranteed jobs for live -- unemployment is only for those that desire it. And we have waaaay too many JD grads to support. Less is more.

Okay but, we don't have enough general practitioners because it's not possible to be a GP and service hundreds of thousands of dollars in debt. These policies are creating more dermatologists and plastic surgeons instead of front line doctors, which are what we need more of. I do concede that "save the young laywers!" is not palatable even when you're talking public defenders and legal aid, because teh poorz and criminals are not exactly sympathetic groups either as far as our boomer overlords are concerned.

[SemperLegal]

1. "The current military retirement system, even with the budget deal's COLA reductions, is far more generous than was promised to current retirees when they joined the armed forces." The whole point is that current PSLF people made decisions based on the promises of old law and then would be massively screwed by not grandfathering. Military retirees are coming out ahead of where they were promised when they made the decision to sign up.. they're just complaining about coming out less ahead. They're just getting cost of living adjustment lowered by 1%.

We also ended up fighting two wars that 20 years ago we might not have expected. Its always a possibility that the longest war in US history will break out, while a second war flares up. just like everyone always knew that PSLF and IBR was a governmental boon subject to removal.

That being said, it is shitty to balance the budget on anyone's back, veteran or law student (especially while Boomers structure all the SS cuts to take effect for us, not them), and I truly feel bad for people who went to a better school in reliance on PSLF. However, I'm not sure I would sign a petition against it*.



*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.

[Big Dog]

so you don't think it's a problem if lawyers stop being willing to enter the public sector because no one can service their debt on the salaries offered?

From a public policy standpoint, no, no problem.

[hdunlop]

Let's look a little bit at what's actually going on here.

First, PSLF was created in 2007 through student loan reform legislation passed via budget reconciliation that cut subsidies for lenders, saving a ton of money, and put some of the benefits toward PSLF, along with temporary cuts in Stafford interest rates and some other stuff. Neat. Importantly, all these changes take place on the direct spending side of the ledger, meaning they're not subject to annual Congressional appropriation (like Social Security and Medicare, and unlike the national parks).

The trick with is that CBO scores spending legislation on a ten-year horizon, and PSLF wouldn't have any costs for the first ten years, meaning that it didn't really look like it cost much if anything when the legislation passed (it's hard to tell exactly because it's lumped in with all the other benefits for students in the CBO estimate, but I'd guess it was scored at zero). After the bill passed, the program became part of the baseline. That means each year CBO estimated its costs -- in 2008, it estimated zero through 2017, then $X in 2018; in 2009, it estimated zero through 2017 and $2*X in 2010; and so on.

So, all of a sudden, the costs are "exploding." Normal people look at this entire situation and say jeez, this is what's wrong with Washington, they create these massive problems by playing budget games and now we're in debt. Washington of course is not run by normal people. Washington people look at this entire situation and say jeez, there are a lot of direct payments coming due that we can reduce to create savings (which would now score, since the program begins paying out in 2017). Better yet, we can use the savings we generate by capping this program to pay for other programs, like expanded PAYE and Perkins and whatever else.

Which brings us to politics. Broadly speaking, this is the President's most liberal budget, particularly on domestic issues, since taking office. It's very strongly targeted toward the poor. Lawyers entering public service are not poor in the eyes of the folks writing this proposal: yes, they would say, servicing $150K of debt on a $60K salary is difficult, but not as difficult as raising a family of three on minimum wage, which brings in less than $20K. Which is to say that this proposal must be taken holistically. It is not a direct attack on PSLF, and more importantly it's not going to go anywhere because nothing in this budget is going anywhere because nothing in Washington is going anywhere until the election (and probably not after especially if Dems lose the Senate).

HOWEVER, and this is a big however, the fact that this program is in the baseline and costs a ton but hasn't actually begun to forgive anyone's loans makes it a tempting target in any deficit talks. Worse, there's no point in grandfathering people in because if you only cut it for people ten years out, you don't get any savings over ten years, making it worthless (it's important to discount the politically irrelevant argument that it would help the country by reducing the deficit). This has been a target more than once in deficit deal talks, especially since the bad press about Georgetown scamming the system. It turns out neither lawyers nor federal employees are particularly sympathetic figures to the broader body politic.

So in conclusion, yes, those of you who are making decisions right now on the basis of government promises about ten years from now, well, caveat emptor. If I were a gambling man, I would say the program will still exist in ten years, but it probably isn't going to be uncapped. There's a good chance that the cap would be introduced gradually in an attempt to kinda-sorta grandfather people, so that the 2017 folks get the full promise and each year folks get some percentage less than that. Do the math, pays your money, and takes your chance.

TL,DR: When PSLF was created it was scored by CBO as free because it didn't begin to pay out for ten years, but now that those ten years are approaching, its baseline costs can be capped to create scored savings that can be used to pay for other spending. This budget is going nowhere so who cares, but yes, this is an increasingly lucrative target for budget-cutting types.

One final note, Congress reversed the military retiree pay "cut" (which was actually a 1% reduction in annual pay growth), in a characteristic decision to undermine even what limited action passes today for political courage.

[bjsesq]

Hrm. This is disappointing.