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

[The Dark Shepard]

if you are grandfathered in, would that only apply to loans taken out before the start date? For example, say it starts in 2015. I, as a 0L, will take out loans for this fall and the next two years. The 1L year is obviously grandfathered in. However, since 2L and 3L start after the beginning of this change, would they fall under that, or would it stay consistent with the 1L?

[Tiago Splitter]

if you are grandfathered in, would that only apply to loans taken out before the start date? For example, say it starts in 2015. I, as a 0L, will take out loans for this fall and the next two years. The 1L year is obviously grandfathered in. However, since 2L and 3L start after the beginning of this change, would they fall under that, or would it stay consistent with the 1L?

They keep using the phrase "new borrowers as of 7/1/15" so presumably any loans taken before that allow you to repay everything you eventually take out under IBR/current PAYE rather than the new PAYE that starts after that date

[swampman]

if you are grandfathered in, would that only apply to loans taken out before the start date? For example, say it starts in 2015. I, as a 0L, will take out loans for this fall and the next two years. The 1L year is obviously grandfathered in. However, since 2L and 3L start after the beginning of this change, would they fall under that, or would it stay consistent with the 1L?

They keep using the phrase "new borrowers as of 7/1/15" so presumably any loans taken before that allow you to repay everything you eventually take out under IBR/current PAYE rather than the new PAYE that starts after that date

Yeah, they explicitly state somewhere that it applies to all loans where the course of study begins before that date, so if you start law school before then all your law school loans would be grandfathered in to the old PAYE (but not PSLF). Again though, who knows what the exact language will be in the actual budget if there is any at all.

[Tiago Splitter]

if you are grandfathered in, would that only apply to loans taken out before the start date? For example, say it starts in 2015. I, as a 0L, will take out loans for this fall and the next two years. The 1L year is obviously grandfathered in. However, since 2L and 3L start after the beginning of this change, would they fall under that, or would it stay consistent with the 1L?

They keep using the phrase "new borrowers as of 7/1/15" so presumably any loans taken before that allow you to repay everything you eventually take out under IBR/current PAYE rather than the new PAYE that starts after that date

Yeah, they explicitly state somewhere that it applies to all loans where the course of study begins before that date, so if you start law school before then all your law school loans would be grandfathered in to the old PAYE (but not PSLF). Again though, who knows what the exact language will be in the actual budget if there is any at all.

I think it would apply to PSLF too. According to the link from educated risk you'd only be subject to the cap if you switch to the new PAYE.

[swampman]

I think it would apply to PSLF too. According to the link from educated risk you'd only be subject to the cap if you switch to the new PAYE.

Ah, I missed that. Good news.

[zozin]

Future lawyers will look at 2015 grads with great envy, for we have been blessed. Enjoy the remainder of the PAYE Golden Era brothers and sisters.

[kay2016]

Future lawyers will look at 2015 grads with great envy, for we have been blessed. Enjoy the remainder of the PAYE Golden Era brothers and sisters.

Here's hoping 2016 grads don't get totally screwed.

[NCGuy]

Of course - looking at the silver lining (if one exists):

This does create a situation where people who are truly interested in public interest law are better able to gets jobs, mainly because they won't be competing with people who are only in it for the 10 year PLSF. 10% of discretionary income (income - 150% of the federal poverty line) doesn't make public interest unaffordable because your loan payments remain a relatively small portion of your income. The crux of public interest being affordable lies in IBR/PAYE, not the forgiveness. If forgiveness remained and the IBR/PAYE went away or the percentage went up to 20-25% then we'd be more screwed than we are under this policy. I would rather pay 10% of my discretionary income for 25 years, then struggle to pay a far higher percentage of my income for 10. I would much rather PLSF be on the table than income based repayment plans.

[The Dark Shepard]

Future lawyers will look at 2015 grads with great envy, for we have been blessed. Enjoy the remainder of the PAYE Golden Era brothers and sisters.

Here's hoping 2016 grads don't get totally screwed.

Same to 2017. I hope we both are ok

[FinanceStudent28]

Future lawyers will look at 2015 grads with great envy, for we have been blessed. Enjoy the remainder of the PAYE Golden Era brothers and sisters.

Here's hoping 2016 grads don't get totally screwed.

Same to 2017. I hope we both are ok

Well nothing has been passed yet, so you are all fine.

[kay2016]

Future lawyers will look at 2015 grads with great envy, for we have been blessed. Enjoy the remainder of the PAYE Golden Era brothers and sisters.

Here's hoping 2016 grads don't get totally screwed.

Same to 2017. I hope we both are ok

Well nothing has been passed yet, so you are all fine.

Doesn't mean we're fine at all. Ideally, the longer something like this takes to pass the better our chances of getting grandfathered in at all. But if this is passed and to take effect for 2015 borrowers, CO 2016/17 and probably even 15 won't have made payments.

The way I see it, the more entrenched you are into this program the better off you'll be... But even still no one is likely 100% guaranteed PSLF forgiveness. Even CO 2007/08

And until it's proposed and says otherwise, I just hope it's prolonged for a few more years.

[Void]

Too lazy to read all 22 pages so sorry if this came up already, but what about the fact that PSLF is described in the master promissory note I signed?

[Void]

Of course - looking at the silver lining (if one exists):

This does create a situation where people who are truly interested in public interest law are better able to gets jobs, mainly because they won't be competing with people who are only in it for the 10 year PLSF.

Speaking as a PI attorney, I can assure you that there is no great overflow of lawyers in my field who are only in it for PSLF. These days you have to completely dedicate yourself to public interest throughout law school in order to even get an interview for a $40k state govt gig. You'd have to be a legit sociopath to spend three years building a resume to score a low-paying PI job at which you would slave away for a decade, with the big payoff being that you get to start back at zero at the end. You'd be incurring debt in order to have debt forgiven.

[NCGuy]

Of course - looking at the silver lining (if one exists):

This does create a situation where people who are truly interested in public interest law are better able to gets jobs, mainly because they won't be competing with people who are only in it for the 10 year PLSF.

Speaking as a PI attorney, I can assure you that there is no great overflow of lawyers in my field who are only in it for PSLF. These days you have to completely dedicate yourself to public interest throughout law school in order to even get an interview for a $40k state govt gig. You'd have to be a legit sociopath to spend three years building a resume to score a low-paying PI job at which you would slave away for a decade, with the big payoff being that you get to start back at zero at the end. You'd be incurring debt in order to have debt forgiven.

That's at least reassuring. I've heard a couple of people in law school say that they're going that route for 10 years, getting back to zero and then going corporate. I anticipate that if they really try it, they likely won't find employment or if they do find employment, they'll burn out quickly.

[worldtraveler]

Of course - looking at the silver lining (if one exists):

This does create a situation where people who are truly interested in public interest law are better able to gets jobs, mainly because they won't be competing with people who are only in it for the 10 year PLSF.

Speaking as a PI attorney, I can assure you that there is no great overflow of lawyers in my field who are only in it for PSLF. These days you have to completely dedicate yourself to public interest throughout law school in order to even get an interview for a $40k state govt gig. You'd have to be a legit sociopath to spend three years building a resume to score a low-paying PI job at which you would slave away for a decade, with the big payoff being that you get to start back at zero at the end. You'd be incurring debt in order to have debt forgiven.

That's at least reassuring. I've heard a couple of people in law school say that they're going that route for 10 years, getting back to zero and then going corporate. I anticipate that if they really try it, they likely won't find employment or if they do find employment, they'll burn out quickly.

They may say they are going to do that but it won't actually work.

[Tiago Splitter]

Too lazy to read all 22 pages so sorry if this came up already, but what about the fact that PSLF is described in the master promissory note I signed?

The DoED press office statements from a few pages back seem to say that PSLF is safe for those with it included in the MPN. The cap would only apply to new borrowers as of 7/1/15 or people who switch into the new form of PAYE (available to all!) after that date.

[dresden doll]

The crux of public interest being affordable lies in IBR/PAYE, not the forgiveness.

The crux is also in not having crushing debt keeping you from ever purchasing a car or a home. As I've already posted ITT, I have no interest in exiting PI after 10 years but that doesn't mean that the negative amortization doesn't keep me up at night every so often.

[dresden doll]

That's at least reassuring. I've heard a couple of people in law school say that they're going that route for 10 years, getting back to zero and then going corporate. I anticipate that if they really try it, they likely won't find employment or if they do find employment, they'll burn out quickly.

There is no way you wind up earning more that way than you would have had you done biglaw to begin with unless you somehow took out million + in loans.

[worldtraveler]

The crux of public interest being affordable lies in IBR/PAYE, not the forgiveness.

The crux is also in not having crushing debt keeping you from ever purchasing a car or a home. As I've already posted ITT, I have no interest in exiting PI after 10 years but that doesn't mean that the negative amortization doesn't keep me up at night every so often.

Supposively there is a form we can request that is supposed to explain to any bank that we don't actually pay our loans, and it's supposed to help us buy houses and other expensive stuff. Finding said form and making the bank understand it may be easier said than done. I bought a car this year and it took them a long to understand how I don't pay my loans but I'm not in default.

[NCGuy]

That's at least reassuring. I've heard a couple of people in law school say that they're going that route for 10 years, getting back to zero and then going corporate. I anticipate that if they really try it, they likely won't find employment or if they do find employment, they'll burn out quickly.

There is no way you wind up earning more that way than you would have had you done biglaw to begin with unless you somehow took out million + in loans.

I never said it was a well thought out plan. There are some people who just hate the idea of paying loans for whatever reason. It could be argued that some PI jobs pay about the same as a small-medium firm job (or a private job in a small town) or that the difference isn't great enough that one wouldn't feel tempted to go into PI for loan forgiveness. Not my life path so I can't rationalize it.

I think the policy question that needs to be answered is how to prevent those on IBR/PAYE from being discriminated against when it comes to making big ticket purchases. A lawyer working for a small town private firm would not qualify for PLSF, would probably be making a low salary and would be saddled with debt for 20-25 years. There should be a way to recalculate debt:income ratio that takes into account reduced payment. If the government included some proposal of that sort then this may be easier to swallow.

Let's be clear though, I think that the current proposal is abysmal and should not happen but I would be far more worried about having to come up with 20-25% of my income for 10 years vs. 10% for 25 years. Of course, this choice is like choosing between getting shot and stabbed.

Anecdotal I know but I know a couple of 3Ls who (stupidly) bought cars and got them financed. I'm not sure what they told their banks though.

[FinanceStudent28]

Doesn't mean we're fine at all. Ideally, the longer something like this takes to pass the better our chances of getting grandfathered in at all. But if this is passed and to take effect for 2015 borrowers, CO 2016/17 and probably even 15 won't have made payments.

The way I see it, the more entrenched you are into this program the better off you'll be... But even still no one is likely 100% guaranteed PSLF forgiveness. Even CO 2007/08

And until it's proposed and says otherwise, I just hope it's prolonged for a few more years.

What I meant was, based on what I've read here there is a pretty good chance this doesn't pass any time soon.

And there is a pretty good chance something like this passes, but it may not be as harsh etc.

Basically obviously it's worrying to many, but no need to start tying the noose yet.

I agree that the scariest thing about this is that it was proposed by Obama.

[Big Dog]

There should be a way to recalculate debt:income ratio that takes into account reduced payment.

Last time I checked, that is what got us into the last/current recession.....

Anecdotal I know but I know a couple of 3Ls who (stupidly) bought cars and got them financed. I'm not sure what they told their banks though.

Generally, with sub-standard credit quality, one just pays a higher interest rate and/or larger down payment to account for the increased risk.

[LSL]

Too lazy to read all 22 pages so sorry if this came up already, but what about the fact that PSLF is described in the master promissory note I signed?

The DoED press office statements from a few pages back seem to say that PSLF is safe for those with it included in the MPN. The cap would only apply to new borrowers as of 7/1/15 or people who switch into the new form of PAYE (available to all!) after that date.

It would be great if this then means no retroactivity. Man though, trying to explain that $57,500 is really not all that much money to people outside the legal system has been such a headache.

Person: "Oh, well, you can just go to a lower-ranked school and get a scholarship to cover the rest."

Me: "Yes, but you actually still want to go to a good school most of the time. If you change your career plans, if you want certain connections, if you want prestigious clerkships and placements, etc. school still matters to some extent."

Person: "Oh, well, at least you'll make enough money when you get out!"

Me: "Uh...well, um...no..."

Person: "People know what they're getting into. They just shouldn't take out that much."

Me: "................."

[shawty18ga]

I went to a lower ranked school and took a full ride plus a small stipend and still ended up with more than 57k between law school and undergrad.

[swampman]

I went to a lower ranked school and took a full ride plus a small stipend and still ended up with more than 57k between law school and undergrad.

You must have lived in a penthouse apartment and spent all your money on facebook and cocaine! I graduated from college without any debt by waitressing on the weekends.

Damn boomer lawmakers.