PSLF Questions Forum

[gazorpazorp]

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[A. Nony Mouse]

1. yep.

2. I don't think there's anything that bars this, but I also don't think PSLF has been around long enough for it to come up? (I'd bet the average PSLF-er is probably not going to be in a position to do this, though I'm totally speculating.) The thing to keep in mind is that to qualify PSLF, you have to be on an income-based repayment plan (PAYE/RePAYE/IBR). The more money you make, the higher your monthly payments are, so if you really made a lot on the side, you could end up increasing your payments to the regular 10-year-plan amount, and then get no benefit from PSLF because there'd be nothing to forgive at the end of 10 years. (This is probably pretty unlikely but it would depend on how much debt you have and how much $ comes in from the side gig.)

[gazorpazorp]

1. yep.

2. I don't think there's anything that bars this, but I also don't think PSLF has been around long enough for it to come up? (I'd bet the average PSLF-er is probably not going to be in a position to do this, though I'm totally speculating.) The thing to keep in mind is that to qualify PSLF, you have to be on an income-based repayment plan (PAYE/RePAYE/IBR). The more money you make, the higher your monthly payments are, so if you really made a lot on the side, you could end up increasing your payments to the regular 10-year-plan amount, and then get no benefit from PSLF because there'd be nothing to forgive at the end of 10 years. (This is probably pretty unlikely but it would depend on how much debt you have and how much $ comes in from the side gig.)

Thanks. And yea, I get that your monthly payments would be higher in that scenario, but the ratio of your paycheck would remain the same (around 6.67-10%), correct? And speaking as someone who may possibly take the plunge and pay sticker at a T8, I... don't think it's true that there'd be nothing to forgive.

I'm also considering PSLF with the infamous "tax-bomb" in mind.

[kay2016]

As of now loans forgiven under PSLF would not have the tax bomb.

[Nachoo2019]

I am an 0L and I have a a couple questions as well.

Is PSLF going to be around long enough for someone like me to take advantage of it?

Is there any chance that they will begin to apply the "tax bomb" to PSLF as well?

[GreenEggs]

I am an 0L and I have a a couple questions as well.

Is PSLF going to be around long enough for someone like me to take advantage of it?

Is there any chance that they will begin to apply the "tax bomb" to PSLF as well?

I highly highly doubt that any change that gets made wouldn't include a grandfather clause for at minimum those who had graduated law school, and likely those who are already in law school as well.

[A. Nony Mouse]

I don't think there's ever been any discussion of applying the tax bomb to PSLF. There has been discussion of capping the total forgiveness (I think Obama had proposed a budget capping it at $57,500, although that hasn't gone through so far). Keep in mind it's not intended specifically for lawyers so a lot of people in PSLF-eligible jobs probably have lower debt burdens.

[Nachoo2019]

I am an 0L and I have a a couple questions as well.

Is PSLF going to be around long enough for someone like me to take advantage of it?

Is there any chance that they will begin to apply the "tax bomb" to PSLF as well?

I highly highly doubt that any change that gets made wouldn't include a grandfather clause for at minimum those who had graduated law school, and likely those who are already in law school as well.

That's what I like to hear.

Thanks!

[XxSpyKEx]

1. yep.

2. I don't think there's anything that bars this, but I also don't think PSLF has been around long enough for it to come up? (I'd bet the average PSLF-er is probably not going to be in a position to do this, though I'm totally speculating.) The thing to keep in mind is that to qualify PSLF, you have to be on an income-based repayment plan (PAYE/RePAYE/IBR). The more money you make, the higher your monthly payments are, so if you really made a lot on the side, you could end up increasing your payments to the regular 10-year-plan amount, and then get no benefit from PSLF because there'd be nothing to forgive at the end of 10 years. (This is probably pretty unlikely but it would depend on how much debt you have and how much $ comes in from the side gig.)

That's not technically true. PSLF requires you to make 120 (non-consecutive) on-time payments while working full time* for a public service employer. You can be on the standard 10-year repayment plan as well and can count any on-time payments you make while on the standard 10-year payment plan towards PSLF (assuming you're at a qualifying full-time public service employer while making those payments). Obviously, if you're on the standard plan for the entire 10 years, then you won't have anything left to be forgiven. But if you go on the standard plan for a part of your repayment period, you can count those payments towards your 120 payments.

*Full time means:

For PSLF, you are generally considered to work full-time if you meet your employer’s definition of full-time or work at least 30 hours per week, whichever is greater.

If you are employed in more than one qualifying part-time job at the same time, you may meet the full-time employment requirement if you work a combined average of at least 30 hours per week with your employers.

For borrowers who are employed by not-for-profit organizations, time spent on religious instruction, worship services, or any form of proselytizing may not be counted toward meeting the full-time employment requirement.

https://studentaid.ed.gov/sa/repay-loan ... employment

2. What if your PSLF-eligible job(s) isn't your only form of employment during those 120 months? For example, say you are working 30+ hours/wk at a non-profit, or in a govt position, whatever... but also working a few hours per week doing something relatively lucrative (e.g. freelance computer programming on the side), and making substantially more than the classic 60k PI law salary? Does this effect anything, as far as your eventual/10yr loan forgiveness goes?

The answer to this question is yes. You can work however many hours you want doing something relatively lucrative in addition to your full-time public service job, and you still would qualify for PSLF. But as A. Nony Mouse pointed out, it means that your payments on an income based payment plan will increase. There is a real question in my mind, though, why someone would effectively work biglaw hours by working a full-time public service job (which is defined by the vast majority of legal employers as at least 40 hours a week) AND a side-job (which presumably is going to require at least another 10-20 hours a week to get you making "substantially more" than the classic 60k PI law salary) instead of simply going into biglaw. I somehow doubt anything you're going to do on the side is going to get you anywhere near the $175k you'd make as a first-year associate in biglaw (with bonus).

[A. Nony Mouse]

That's not technically true. PSLF requires you to make 120 (non-consecutive) on-time payments while working full time* for a public service employer. You can be on the standard 10-year repayment plan as well and can count any on-time payments you make while on the standard 10-year payment plan towards PSLF (assuming you're at a qualifying full-time public service employer while making those payments). Obviously, if you're on the standard plan for the entire 10 years, then you won't have anything left to be forgiven. But if you go on the standard plan for a part of your repayment period, you can count those payments towards your 120 payments.

You're right - sorry, I had missed that.

[ja7810]

I am an 0L and I have a a couple questions as well.

Is PSLF going to be around long enough for someone like me to take advantage of it?

Is there any chance that they will begin to apply the "tax bomb" to PSLF as well?

I highly highly doubt that any change that gets made wouldn't include a grandfather clause for at minimum those who had graduated law school, and likely those who are already in law school as well.

That's what I like to hear.

Thanks!

glad to see this as well, and wondering if any others agree/disagree

seems like next year is the first year people can cash in on it, so it seems kind of early to be able to tell i guess.