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

[twenty]

http://www2.ed.gov/about/overview/budge ... erview.pdf

Capping PSLF at the aggregate loan limit means you'll get $57,500 of your loans forgiven through PSLF. This appears to apply retroactively. If this actually passes, PI people (even people well on their way to forgiveness) are fucked.

Let the revolution begin.

[worldtraveler]

http://www2.ed.gov/about/overview/budge ... erview.pdf

Capping PSLF at the aggregate loan limit means you'll get $57,500 of your loans forgiven through PSLF.

This appears to apply retroactively.

If this actually passes, PI people (even people well on their way to forgiveness) are fucked.

That references undergraduate debt. Is it different for grads/lawyers?

If they do this I honestly just might renounce citizenship.

[cron1834]

WT asks a good question - if this applies to grad loans, future and retroactive, it is going to cost hundreds of thousands of dollars for the folks who need it most and are paid the least. Can this actually be?

[Dingo Starr]

This appears to apply retroactively.

can you show me where?

[twenty]

Is it different for grads/lawyers?

Unfortunately, no. The "undergraduate aggregate loan limit" is currently $57,500 (as you can see on page 8 ), and PSLF would be tied to that.

The "new PSLF" kicks in at 25 years (ironically later than the PAYE forgiveness with the tax bomb):

"Establish[es] a 25-year forgiveness period for borrowers with balances above the aggregate loan limit for independent undergraduate students"

[twenty]

This appears to apply retroactively.

can you show me where?

The reason why is that PSLF isn't uniquely tied into PAYE, so no one is technically "on" PSLF right now. Furthermore, the budget proposal says nothing about not applying the change it to people that have already been making payments with the expectation that they'll do PSLF in ten years.

[A. Nony Mouse]

I am so fucking unamused by this. Fuckity fuck fuck fuck.

Also, this:

Capping Public Sector Loan Forgiveness (PSLF) at the aggregate loan limit for independent undergraduate students to protect against institutional practices that may further increase student indebtedness, while ensuring the program provides sufficient relief for students committed to public service;

really pisses me off. I get the idea that they want to discourage schools charging lots of money just because students can get loans to pay tuition, but that ship has sailed and is halfway around the world right now. Do they really think law schools are going to magically drop their tuition to below this cap? Because that's not going to happen. So this means that public service jobs will be limited to students who can afford to pay law school tuition, or can get a full ride somewhere. Which seems to defeat the purpose of having PSLF, since those students could always afford to go into public service.

[twenty]

Fuckity fuck fuck fuck.

This basically summarizes my feelings as well.

[Turtledove]

This should be stickied -- this is a BFD.

[worldtraveler]

Actually what is most concerning about this is the marriage penalty. Now it is going to be next to impossible for any married person to pursue PI if they have a relatively high earning spouse. So for 25 years you cannot have a spouse with a high salary or you will be repaying a ton in loans.

I feel like we need TLS to successfully lobby some conservative senators that are super pro-marriage to get that part thrown out because that would seriously dissuade a lot of marriages.


Another thing: most law schools have linked their LRAPs to PSLF. If this proposal goes through, it's time to guilt trip your law school into revising that policy, considering they persaude PI students to come on the idea that your debt can be forgiven.

[cron1834]

This proposal unquestionably applies to grad-level debt, then? Stupefying if true.

[Dingo Starr]

This totally changes the dynamic of which school I can go to.
I have to take the lower ranked full ride.
That really fucks up my leverage for negotiations, if nothing else.
Never thought I'd say this: Fuck you, Obama.

[Nelson]

This is going to bring a whole new meaning to biglaw or bust.

[worldtraveler]

This might actually be a time for TLS to finally enter politics and draft a petition demonstrating how and why this completely fucks over PI law students.

[hunter.d]

"• Capping Public Sector Loan Forgiveness (PSLF) at the aggregate loan limit for
independent undergraduate students to protect against institutional practices that may
further increasestudent indebtedness, while ensuring the program provides sufficient
relief for students committed to public service;

• Establishing a 25-year forgiveness period for borrowers with balances above the
aggregate loan limit for independent undergraduate students ; "

It isn't clear from the text whether that means for students who are independent undergraduates above their limit or for students who have borrowed above the limit set for independent undergraduate students regardless of whether they are graduate students. The latter would seem to be counter-intuitive. Might want to do some more source checking before going crazy.

[twenty]

"• Capping Public Sector Loan Forgiveness (PSLF) at the aggregate loan limit for
independent undergraduate students to protect against institutional practices that may
further increasestudent indebtedness, while ensuring the program provides sufficient
relief for students committed to public service;

• Establishing a 25-year forgiveness period for borrowers with balances above the
aggregate loan limit for independent undergraduate students ; "

It isn't clear from the text whether that means for students who are independent undergraduates above their limit or for students who have borrowed above the limit set for independent undergraduate students regardless of whether they are graduate students. The latter would seem to be counter-intuitive. Might want to do some more source checking before going crazy.

Unfortunately "the aggregate loan limit for independent undergraduate students" is a threshold for financial aid, not a reference to the status of the student.

EDIT> Though I dearly, dearly want you to be right.

[cron1834]

"• Capping Public Sector Loan Forgiveness (PSLF) at the aggregate loan limit for
independent undergraduate students to protect against institutional practices that may
further increasestudent indebtedness, while ensuring the program provides sufficient
relief for students committed to public service;

• Establishing a 25-year forgiveness period for borrowers with balances above the
aggregate loan limit for independent undergraduate students ; "

It isn't clear from the text whether that means for students who are independent undergraduates above their limit or for students who have borrowed above the limit set for independent undergraduate students regardless of whether they are graduate students. The latter would seem to be counter-intuitive. Might want to do some more source checking before going crazy.

I also noticed this language. I suspect twenty is right, but I'm unclear.

ETA - agreed, Nelson. Biglaw or TTT full-ride/stipend or Bust.

[hunter.d]

"• Capping Public Sector Loan Forgiveness (PSLF) at the aggregate loan limit for
independent undergraduate students to protect against institutional practices that may
further increasestudent indebtedness, while ensuring the program provides sufficient
relief for students committed to public service;

• Establishing a 25-year forgiveness period for borrowers with balances above the
aggregate loan limit for independent undergraduate students ; "

It isn't clear from the text whether that means for students who are independent undergraduates above their limit or for students who have borrowed above the limit set for independent undergraduate students regardless of whether they are graduate students. The latter would seem to be counter-intuitive. Might want to do some more source checking before going crazy.

Unfortunately "the aggregate loan limit for independent undergraduate students" is a threshold for financial aid, not a reference to the status of the student.

EDIT> Though I dearly, dearly want you to be right.

I know it is but I don't think it follows that limit has any bearing on graduate students, specifically law students with degrees costing 150k+. Furthermore, that limit is a Stafford Loan limit, which says nothing about PLUS which isn't available to undergrads.

[worldtraveler]

"• Capping Public Sector Loan Forgiveness (PSLF) at the aggregate loan limit for
independent undergraduate students to protect against institutional practices that may
further increasestudent indebtedness, while ensuring the program provides sufficient
relief for students committed to public service;

• Establishing a 25-year forgiveness period for borrowers with balances above the
aggregate loan limit for independent undergraduate students ; "

It isn't clear from the text whether that means for students who are independent undergraduates above their limit or for students who have borrowed above the limit set for independent undergraduate students regardless of whether they are graduate students. The latter would seem to be counter-intuitive. Might want to do some more source checking before going crazy.

Unfortunately "the aggregate loan limit for independent undergraduate students" is a threshold for financial aid, not a reference to the status of the student.

EDIT> Though I dearly, dearly want you to be right.

I know it is but I don't think it follows that limit has any bearing on graduate students, specifically law students with degrees costing 150k+. Furthermore, that limit is a Stafford Loan limit, which says nothing about PLUS which isn't available to undergrads.

It also says that students with loans higher than the aggregate can still have them forgiven? Really it seems like this is targeted at undergrads and they failed to consider grad and professionals. So who knows WTF they mean.

[cron1834]

Let's hope this is an undergrad-debt proposal.

In the meantime, Inside Higher Ed seems to suggest this is DOA ...

[hunter.d]

http://www.insidehighered.com/news/2014 ... x-benefits

"The Obama budget will also seek to exempt from taxation the student loan forgiveness the federal government provides to borrowers after they have made payments for at least a decade through income-based repayment programs. The federal government forgives the debt of borrowers working in the public or nonprofit sectors after as few as 10 years. Other income-based repayment programs forgive outstanding debt after 20 or 25 years of repayment."

Also: "The budget plan is largely a political document aimed at highlighting the president’s priorities and is geared toward rallying the Democratic base in an election year." Translation: None of this has any chance of becoming law anytime soon.

[twenty]

"• Capping Public Sector Loan Forgiveness (PSLF) at the aggregate loan limit for
independent undergraduate students to protect against institutional practices that may
further increasestudent indebtedness, while ensuring the program provides sufficient
relief for students committed to public service;

• Establishing a 25-year forgiveness period for borrowers with balances above the
aggregate loan limit for independent undergraduate students ; "

It isn't clear from the text whether that means for students who are independent undergraduates above their limit or for students who have borrowed above the limit set for independent undergraduate students regardless of whether they are graduate students. The latter would seem to be counter-intuitive. Might want to do some more source checking before going crazy.

Unfortunately "the aggregate loan limit for independent undergraduate students" is a threshold for financial aid, not a reference to the status of the student.

EDIT> Though I dearly, dearly want you to be right.

I know it is but I don't think it follows that limit has any bearing on graduate students, specifically law students with degrees costing 150k+. Furthermore, that limit is a Stafford Loan limit, which says nothing about PLUS which isn't available to undergrads.

Like I said before, more than anything in the world, I hope you're right.

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." Of course, I'm not really in favor of retroactively screwing undergrads that are over the Stafford loan limit either, but the budget proposal doesn't mention any differentiation between Stafford loans and PLUS loans, it just mentions the threshold.

If nothing else (and I know this is bad LSAT logic) wouldn't the budget proposal have specifically excluded PLUS loans from the proposed PSLF cap, especially considering that there is no cap on PLUS loans?

[A. Nony Mouse]

I think it's all sort of unclear. I tend to agree with twenty that the "independent undergraduate cap" is intended to indicate an amount, not a kind of student, since it's all discussed under changes to PAYE, which applies to grad loans as well as undergrad, but it's not the best way to explain it. Technically, it also describes the PSLF cap as a change to PAYE, which sort of suggests that if you're on IBR (like me), it doesn't apply (except that I agree with twenty's earlier post pointing out that PSLF isn't tied to any payment plan - you're not "on" PSLF, you're "on" IBR/PAYE and ultimately intend to apply those payments to PSLF. So while I think my argument works technically, I don't think that's what they really mean). And PSLF is only mentioned twice in the whole document. So they need to make this a lot clearer.

Edit: I hope you're all correct it's just a political statement. I think this comment in IHE suggests the PSLF cap is intended to apply to grad programs:[quote]The proposal responds to concerns that the “Pay As You Earn” program is a windfall for students at expensive professional schools who incur high debt but also then get high-paying jobs that allow them to repay that debt./quote](It might just refer to the other changes to PAYE, but the budget proposal lists the cap under the changes to PAYE.)

[twenty]

Even if nothing else, I think this is a super good wakeup call to myself especially, but I'm sure many others on this forum, that PSLF/PAYE are not "for sure" bailouts for PI-oriented students that want to spend ten years saving the world. I'm often the first to recommend a T14 at sticker over a regional for a full ride when it comes to PI because of how awesome these programs have been in the past.

Though this budget proposal may not pass, it's good to realize how tenuous things really are.

[hunter.d]

How about pure a reductio ad absurdum argument for it not meaning what twenty says: Obama puts out purely political budget proposal to energize the base that serves to disenfranchise his base, young college students.