PAYE Legislation Thread- Pepper Anus Yuppie Eleemosynaries Forum

[LSL]

old news

05/22/2013-
--LinkRemoved--

At present, the program forgives outstanding debt for borrowers who make 20 years of timely payments - 10 years if they work in the public or nonprofit sector. But eligibility is limited to borrowers approved since October 2007. The Obama plan would extend forgiveness to those who took out loans before that. And it would render debt tax-exempt. It's a sweet deal - except to taxpayers.

awesome.

I really hope this is passed. Do you think this would cause legislators to create a greater amount of pressure on schools to stem the rapid increase in tuition?

You know, you'd hope for that since we know tuition costs are out of control but have just been allowed to stay that way because it's easy to shift debt on to young people. But, since the ridiculous cost will be mitigated by being spread across a much larger taxpayer base, I'm guessing probably not. Just hoping they don't manage to put a cap on debt forgiveness without addressing insane tuition increases first though.

[ajax]

FYI

http://www.mainstreet.com/article/money ... my-?page=1

[patogordo]

RIOT

[Pleasye]

RIOT

Fuuuuuuck. I already knew I wasn't eligible but I really got my hopes up for this change.

[LSL]

RIOT

Fuuuuuuck. I already knew I wasn't eligible but I really got my hopes up for this change.

Me too. Fuck this shit.

[Bikeflip]

No debt forgiveness in the budget proposal: http://www.whitehouse.gov/sites/default ... budget.pdf


Just making what we all knew official.

[Paul Campos]

No debt forgiveness in the budget proposal: http://www.whitehouse.gov/sites/default ... budget.pdf


Just making what we all knew official.

Looks like they're trying to cap PSLF debt forgiveness at $57,500. The change in regard to married borrowers would be a big deal as well. From the WSJ blog:

Among the changes proposed Tuesday, individual borrowers would face new limits on how much debt that could have forgiven. The amount forgiven for public-sector workers would be capped at $57,500. Borrowers with debt loads above $57,500 would make payments for 25 years. And payments for married borrowers filing separately would be calculated on their combined household adjusted gross income.

[LSL]

No debt forgiveness in the budget proposal: http://www.whitehouse.gov/sites/default ... budget.pdf


Just making what we all knew official.

Looks like they're trying to cap PSLF debt forgiveness at $57,500. The change in regard to married borrowers would be a big deal as well. From the WSJ blog:

Among the changes proposed Tuesday, individual borrowers would face new limits on how much debt that could have forgiven. The amount forgiven for public-sector workers would be capped at $57,500. Borrowers with debt loads above $57,500 would make payments for 25 years. And payments for married borrowers filing separately would be calculated on their combined household adjusted gross income.

OMFG. I can't read all that right now, but can someone please reassure me that the cap and filing separately wouldn't count for those already in school? That's going to be insanely important for Public Interest workers.

[Cal Trask]

25 years required for PSLF? This is absolutely batshit insane.

[twenty]

0L here, but...

Holy shit.

[Dingo Starr]

OK. I just read these posts and flipped my lid before settling into a little research.
Found and read the WSJ article and as many other relevant articles that I could find.
Followed the link to the whitehouse site, searched the crap out of it and could nothing.
Emailed the author of the WSJ article, asking for specific citation information. We will see what the response is from him.
Seems like the articles on this subject are ping-ponging some original article's info without doing any research, though I could be wrong. I do not know what that original article is or where to find it, but maybe I'll head over to the AP and see what they have.
Somebody chime in here with some properly sourced info, please.

[Nomo]

I would encourage everyone to submit comments to the whitehouse here http://www.whitehouse.gov/contact and to contact your congress person and senators. Let them know they should curb borrowing by putting pressure on schools to lower tuition on the front end. At a minimum they shouldn't pull the rug out from under those who are already in school or the workforce. Maybe we should start a whitehouse petition.

[drgeraldyaya]

Here is the 2015 Department of Education budget report on the proposed PAYE changes:

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

[Bikeflip]

More info

Dept of ED FY 2015 BUDGET PROPOSAL

The Budget proposes additional changes to PAYE to include:

• Eliminating the standard payment cap under PAYE so that high-income, high-balance borrowers pay an equitable share of their earnings as their income rises;

• Calculating payments for married borrowers filing separately on the combined household Adjusted Gross Income;

• 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;

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

• Preventing payments made under non-income driven repayment plans from being applied toward PSLF to ensure that loan forgiveness is targeted to students with the greatest need; and

• Capping the amount of interest that can accrue when a borrower’s monthly payment is insufficient to cover the interest to avoid ballooning loan balances.

Note the underlined and the Campos quote of $57,500. The two are probably the same: http://studentaid.ed.gov/types/loans/su ... subsidized

$57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.

$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

Also I misspoke before. Under the proposal, PAYE may be extended to pre-2007 loans. What I meant to say is that I don't see anything to remove DAT TAXBOMB.

[kay2016]

25 years required for PSLF? This is absolutely batshit insane.

You guys understand this stuff better than I do.. But chiming in to get informed since as a 1L I was basing a lot on at least the hope of PSLF.

[Dingo Starr]

Ugh. Thank you, BikeFlip.

Question: Does "• 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;"
mean that PSLF will be capped for ALL students at the UG rate? Or does it only mean that UG students will be capped at that rate?

Also, thoughts on whether this would apply retroactively and if/when it might be implemented?

In other words, will I get out ahead of this by entering law school before it is enacted?

[Nomo]

Ugh. Thank you, BikeFlip.

Question: Does "• 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;"
mean that PSLF will be capped for ALL students at the UG rate? Or does it only mean that UG students will be capped at that rate?

Also, thoughts on whether this would apply retroactively and if/when it might be implemented?

In other words, will I get out ahead of this by entering law school before it is enacted?

I wouldn't test my luck.

[kay2016]

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


Does this mean that the balance below the aggregate limit would be forgiven? Or if you've taken out more than this arbitrary limit and were thinking about PSLF you need to go shoot yourself now?

[LSL]

WAIT WAIT EVERYONE TAKE A LOOK AT PAGE 14. I think this is the key page I think it says that PAYE is expanded to all borrowers. "The most substantial change will be to expand PAYE to all student borrowers, regardless of when they borrowed." Wow, if I'm reading this correctly, they're proposing to scrap all the other income-driven repayment plans for those who originate their first loan after July 1, 2015 entirely. (page 14). Take a look.

Okay, so the only place I see $57,500 mentioned there is in relation to "Independent Undergraduates" (aggregate limit) (page 8 ). And I think I found the bullshit where it fucking caps (on page 14):

"-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."

However, there is also this part (page 14): "Students who borrowed their first loans prior to July 1, 2015 would continue to be able to select among the existing repayment plans (for plans for which they now qualify and for loans originated through their current course of study), in addition to the modified PAYE."

So, based on that, I think if you've already borrowed, you're still safe to have more than $57,500 forgiven. But who the hell knows? I have to head out, but people should check this out and let me know what they think. I'll try to look later.

Edit: scooped a bit, but hopefully still useful.

[09042014]

Suck it public interest leeches.

[kay2016]

WAIT WAIT EVERYONE TAKE A LOOK AT PAGE 14. I think this is the key page I think it says that PAYE is expanded to all borrowers. "The most substantial change will be to expand PAYE to all student borrowers, regardless of when they borrowed." Wow, if I'm reading this correctly, they're proposing to scrap all the other income-driven repayment plans for those who originate their first loan after July 1, 2015 entirely. (page 14). Take a look.

Okay, so the only place I see $57,500 mentioned there is in relation to "Independent Undergraduates" (aggregate limit) (page 8 ). And I think I found the bullshit where it fucking caps (on page 14):

-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."

However, there is also this part (page 14): "Students who borrowed their first loans prior to July 1, 2015 would continue to be able to select among the existing repayment plans (for plans for which they now qualify and for loans originated through their current course of study), in addition to the modified PAYE."

So, based on that, I think if you've already borrowed, you're still safe to have more than $57,500 forgiven. But who the hell knows? I have to head out, but people should check this out and let me know what they think. I'll try to look later.

I think the PAYE expansion and no more IBR if you haven't borrowed yet.. but IBR/etc if you have already borrowed is all true.. That's what I got as well… But I'm not sure about the PSLF stuff.


ETA: The capping the interest so the loan doesn't expand is good… But if you're on PAYE and have enough in loans, it's going to take forever before you can even make a dent in the loans. So it's all still going to be forgiven, it's just going to weigh on the shoulders for more than twice as long.

[worldtraveler]

Does anyone want to flee the country with me?

[Bikeflip]

I wanna know more about this

• Capping the amount of interest that can accrue when a borrower’s monthly payment is insufficient to cover the interest to avoid ballooning loan balances.

How large can our loans become? 150% larger?

[Dingo Starr]

Does anyone want to flee the country with me?

Yes but this isn't the TLS Tinder thread.

[Rahviveh]

So it seems the 20-year option is still available for current students?

Hopefully the DC shitheads can wait two more years before fucking around with this program again.