Public Service Loan Forgiveness On The Block

[Old Grunt]

I don't personally benefit from this program as I work for and am paid by a small democratic group/partnership model, but I am sure many people here are counting on it.

GOP bill would eliminate student loan forgiveness for public service

There is no mention as to if people will be grandfathered in. BOHICA.

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[deleted245139]

I have no doubt they will KO those grandfathered. They've already tried laying the groundwork with considering transferring all edu debt to the dept of treasury. The lawsuits posed for those denied or repealed will likely fail. It's disappointing... I'm just going to refinance at this point. Sounded nice at the start, but always felt too good to be true

 

[Old Grunt]

I have no doubt they will KO those grandfathered. They've already tried laying the groundwork with considering transferring all edu debt to the dept of treasury. The lawsuits posed for those denied or repealed will likely fail. It's disappointing... I'm just going to refinance at this point. Sounded nice at the start, but always felt too good to be true

I wonder how much the loan reconsolidation crew donated to the GOP?

This is going to really screw up residency programs.

 

[shoal007]

Well not really surprised by the GOP. screw me on the new tax bill, take away 5 years of pslf payment. What's next, that's right decrease payment to physicians and remove balanced billing and do not require insurance to pay for emergency services.


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[Old Grunt]

Well not really surprised by the GOP. screw me on the new tax bill, take away 5 years of pslf payment. What's next, that's right decrease payment to physicians and remove balanced billing and do not require insurance to pay for emergency services.


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What really sucks for PLSF is that you have likely capitalized with interest with the assumption that the government would honor its word.

 

[shoal007]

What really sucks for PLSF is that you have likely capitalized with interest with the assumption that the government would honor its word.

Ya... I'm just setting aside 5k extra a month in an account to pay off my loans if this falls through.

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[bravotwozero]

I'm glad I never put any faith in this program and hammered away at my loans with half my paycheck going towards it. One last payment and thank goodness I'm free!

 

[Old Grunt]

I'm glad I never put any faith in this program and hammered away at my loans with half my paycheck going towards it. One last payment and thank goodness I'm free!

Although it does look like they are going to grandfather people in.

 

[The White Coat Investor]

Well not really surprised by the GOP. screw me on the new tax bill, take away 5 years of pslf payment. What's next, that's right decrease payment to physicians and remove balanced billing and do not require insurance to pay for emergency services.


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It's not a partisan issue. The Obama budget of 2013 also proposed chopping it. The threat is more credible this time though.

You must be in a very unique position to be getting screwed on the new tax bill. Very few attending physicians will have their taxes raised by it. You must be living in NY,NJ, or CA.

 

[Groove]

I knew this program would get axed. Uncle Sam ALWAYS gets his money back + interest. With today's high interest education loans, any strategy other than aggressive payback is financial suicide. I owed ~390K when I finished residency. On December 15th, one last payment and I'm done baby! Woohoo!

 

[Denjang]

I thought PSLF was supposed to start paying out in the Fall of 2017. I have heard no jubilation nor any fury regarding PSLF recently. What happened??

 

[shoal007]

I thought PSLF was supposed to start paying out in the Fall of 2017. I have heard no jubilation nor any fury regarding PSLF recently. What happened??

There really aren't that many people that qualify. In addition the first class would have had to be uptra proactive and knowledgeable to enroll without much publication of it, when it went live. I'd expect more info in the next year. In 4 years when I will qualify I'd expect thousands claiming it.

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[gamerEMdoc]

This was never ever going to happen. The Government isn't in the business of bailing out doctors, and the public outcry when the story would get written that doctors making $400k a year were getting charity by having the Govt pay hundreds of thousands of dollars on their loans... Oh my... Doctors would be vilified. I've been telling my residents this for several years. Just pay your loans off in 2-3 years when you get out. Live off $100k, and use all that extra money to pay your loans down quickly as humanly possible. Work an extra shift or two to do so. Never ever ever ever just pay the minimum. Don't rely on the Govt because they aren't going to help you, it's just not going to happen.

 

[HopefulEMed]

This was never ever going to happen. The Government isn't in the business of bailing out doctors, and the public outcry when the story would get written that doctors making $400k a year were getting charity by having the Govt pay hundreds of thousands of dollars on their loans... Oh my... Doctors would be vilified. I've been telling my residents this for several years. Just pay your loans off in 2-3 years when you get out. Live off $100k, and use all that extra money to pay your loans down quickly as humanly possible. Work an extra shift or two to do so. Never ever ever ever just pay the minimum. Don't rely on the Govt because they aren't going to help you, it's just not going to happen.

I think I love you. Thank you for being so frank on this forum, like really. You offer the best advice.

 

[shoal007]

This was never ever going to happen. The Government isn't in the business of bailing out doctors, and the public outcry when the story would get written that doctors making $400k a year were getting charity by having the Govt pay hundreds of thousands of dollars on their loans... Oh my... Doctors would be vilified. I've been telling my residents this for several years. Just pay your loans off in 2-3 years when you get out. Live off $100k, and use all that extra money to pay your loans down quickly as humanly possible. Work an extra shift or two to do so. Never ever ever ever just pay the minimum. Don't rely on the Govt because they aren't going to help you, it's just not going to happen.

I'm pretty sure it's going to be paid. I'll be a little butt hurt if not. But I am setting aside the difference.

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[Tiger26]

Our medical school was very clear that this wasn't guaranteed and that we shouldn't rely on it

 

[gamerEMdoc]

Our medical school was very clear that this wasn't guaranteed and that we shouldn't rely on it

Your medical school is wise.

 

[GeneralVeers]

Meh. Just work at a higher paying job for 1-2 years and you will have earned enough to pay off the loans and more. No sure what the benefit of working in a rural area for less pay for 5 years was just to pay of $200K in debt.

 

[shoal007]

Meh. Just work at a higher paying job for 1-2 years and you will have earned enough to pay off the loans and more. No sure what the benefit of working in a rural area for less pay for 5 years was just to pay of $200K in debt.

I am working in a rural area in a state my wife wants to live in. The urban groups pay 20% less, and I wouldn't receive the same benefits. Although I am not paying beyond the 10 year term right now, I would not be able to pay it off in 1-2 years even if I stopped contributions to 403b,457, and 529. The amount to be forgiven will total 120k tax free (200k+ in income).

House payment (300k mortgage), investments (20% pretax dollars), childcare(10k), car payments, food, taxes, loan payments (2.5k/mo on 200k balance), vacations (10k/yr?) leaves very little left over for extra payments. Could we skimp and pay it down in 4years? Yes.. but I'd rather take the risk to save 200k.

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[GeneralVeers]

I am working in a rural area in a state my wife wants to live in. The urban groups pay 20% less, and I wouldn't receive the same benefits. Although I am not paying beyond the 10 year term right now, I would not be able to pay it off in 1-2 years even if I stopped contributions to 403b,457, and 529. The amount to be forgiven will total 120k tax free (200k+ in income).

House payment (300k mortgage), investments (20% pretax dollars), childcare(10k), car payments, food, taxes, loan payments (2.5k/mo on 200k balance), vacations (10k/yr?) leaves very little left over for extra payments. Could we skimp and pay it down in 4years? Yes.. but I'd rather take the risk to save 200k.

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But you've made a decision to live in a lower-paying area. $200K for an EP these days is on the very low end of the spectrum. Taxpayers shouldn't be paying you for your decisions.

 

[EMimg20]

and the government shouldn't be giving out loans at 6 to 8%, and the med schools shouldn't be charging that much tuition. If loan forgiveness works it should in no way reflect poorly on the recipients.

 

[shoal007]

But you've made a decision to live in a lower-paying area. $200K for an EP these days is on the very low end of the spectrum. Taxpayers shouldn't be paying you for your decisions.

I don't make 200k. That's how much the repayment will save me after tax. I earn right at 50%ith precentile according to mgma?

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[High Roller]

Just curious...anyone hear of any success stories yet with physicians getting PSLF payoff? I know its early, but I haven't heard anything from my circle. Someone has gotta know a guy, who knows a guy.

 

[AthleteDoc7]

Was told the most recent draft of the proposal has anyone who took their first loan before June 2019 grandfathered in to still being able to utilize PSLF, which is great news. any truth to this, and if so, do you think it'll hold up?

 

[Dares Dareson]

It's not a partisan issue. The Obama budget of 2013 also proposed chopping it. The threat is more credible this time though.

You must be in a very unique position to be getting screwed on the new tax bill. Very few attending physicians will have their taxes raised by it. You must be living in NY,NJ, or CA.

I would love a source on this.

 

[Bill Brasky]

I would love a source on this.

It was all over SDN back in the day. The proposal was a cap on PSLF repayment to $57k. Why Obama’s Proposed Budget Has a Bunch of Public Service Workers Worried About Their Student Debt

I think capping is a much better idea than just eliminating. This policy wasn't meant for doctors, it was meant for teachers and social workers who often need expensive master's degrees to pursue their field but will never see pay higher than $50k if they work in underserved areas. My SO has about that much in debt and doesn't even make $40k/year as a social worker doing nonprofit work in a very, very poor city.

 

[The White Coat Investor]

This policy wasn't meant for doctors, it was meant for teachers and social workers who often need expensive master's degrees to pursue their field but will never see pay higher than $50k if they work in underserved areas. My SO has about that much in debt and doesn't even make $40k/year as a social worker doing nonprofit work in a very, very poor city.

I think that's your opinion. There's certainly no evidence of that in the law. What's wrong with public defenders or CHC docs being thrown a bone?

 

[Bill Brasky]

I think that's your opinion. There's certainly no evidence of that in the law. What's wrong with public defenders or CHC docs being thrown a bone?

I don't mean that doctors shouldn't get it, I mean that I don't think it was written with doctors in mind. Consequently, it doesn't surprise me that legislators are getting cold feet when they see some big debts being forgiven. That's why I've never trusted the PSLF option and have never planned to try and take advantage of it. I'm perfectly fine with doctors collecting on this, especially those who have been promised for years that it was available and planned their loan repayment accordingly.

 

[EMdoc10]

1) Anyone (or know of someone who) got loans forgiven through PSLF last year?
2) About how much are attendings paying monthly for IDR plans?
3) For those not eligible for PAYE (ex: due to having loans pre-10/1/07), what's the consensus between IBR vs RePAYE?

 

[migm]

1) Anyone (or know of someone who) got loans forgiven through PSLF last year?
2) About how much are attendings paying monthly for IDR plans?
3) For those not eligible for PAYE (ex: due to having loans pre-10/1/07), what's the consensus between IBR vs RePAYE?

it doesn't make sense to consider continuing IBR/IDR - 6.5% can easily be refinanced to 4 and you can actually make progress on paying off your loan

 

[BoardingDoc]

it doesn't make sense to consider continuing IBR/IDR - 6.5% can easily be refinanced to 4 and you can actually make progress on paying off your loan

You can't refinance if you're planning on using PSLF, which is what this thread is about.

 

[shoal007]

There is a piece on nytimes? About one person forgiven ~250k. Supposedly somewhere around 250 people have been forgiven. I have 220k loans and I'm paying 2400/mo. I have 4 years left with a payoff of about 120k. I will have paid the value of the original loan and all interest will be forgiven in the end.

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[migm]

You can't refinance if you're planning on using PSLF, which is what this thread is about.

didn't even think about or even realize you couldn't refinance for PSLF. seriously hope you guys don't get screwed.

 

[miacomet]

It's not a partisan issue. The Obama budget of 2013 also proposed chopping it. The threat is more credible this time though.

You must be in a very unique position to be getting screwed on the new tax bill. Very few attending physicians will have their taxes raised by it. You must be living in NY,NJ, or CA.

Utah has fairly high state taxes and a weird formula for figuring them out based on federal taxable income. Don't you think single docs without kids may well end up paying more in your state, especially if they are employed and earn 200-400k?

 

[The White Coat Investor]

A 5% mostly flat tax is mid-range among the states I think. I agree the Utah phaseout of itemized deductions is kind of weird.

Maybe there will be a few docs whose taxes went up, but it might be a challenge to find a single doc without kids here. I've got one in my group of 18.

 

[Apollyon]

A 5% mostly flat tax is mid-range among the states I think. I agree the Utah phaseout of itemized deductions is kind of weird.

Maybe there will be a few docs whose taxes went up, but it might be a challenge to find a single doc without kids here. I've got one in my group of 18.

My wife and I don't have kids.

 

[miacomet]

A 5% mostly flat tax is mid-range among the states I think. I agree the Utah phaseout of itemized deductions is kind of weird.

Maybe there will be a few docs whose taxes went up, but it might be a challenge to find a single doc without kids here. I've got one in my group of 18.

But for those who don't, which is a not insignificant number (even within Utah!) and who are employed and earn between 200-400k (variable based on marriage status), this tax law is not a benefit.

 

[BoardingDoc]

But for those who don't, which is a not insignificant number (even within Utah!) and who are employed and earn between 200-400k (variable based on marriage status), this tax law is not a benefit.

This tax law is absolutely a benefit to people in that income range if they are married, regardless of whether or not they have kids. If they are single, making between 200-400k, yes they are penalized.

 

[TooMuchResearch]

My wife and I don't have kids.

I think he meant in Utah?

 

[Apollyon]

I think he meant in Utah?

Well, I thought he meant here on SDN, because he mentioned one person of 18 in his group without kids. We'll see!

 

[The White Coat Investor]

My wife and I don't have kids.

You guys also don't live in Utah.

 

[The White Coat Investor]

This tax law is absolutely a benefit to people in that income range if they are married, regardless of whether or not they have kids. If they are single, making between 200-400k, yes they are penalized.

You need to define "penalized" if you want to take this discussion further. Are you saying their tax bill went up from 2017 to 2018? Or that it is higher in 2018 if they are single than if they are married. Also the state matters in this discussion. I find it highly unlikely that a doc in an income tax-free state had their overall tax bill increase in 2018 compared to 2017.

 

[BoardingDoc]

You need to define "penalized" if you want to take this discussion further. Are you saying their tax bill went up from 2017 to 2018? Or that it is higher in 2018 if they are single than if they are married. Also the state matters in this discussion. I find it highly unlikely that a doc in an income tax-free state had their overall tax bill increase in 2018 compared to 2017.

I'm saying that with the new tax law, a single person earning between 200k-400k is now paying more federal income tax than they were before the tax laws took effect.

 

[Apollyon]

You guys also don't live in Utah.

Were you talking Utah, or here on SDN? Because, if it was Utah, then your post is redundant. Clarify for me, man! Thanks.

 

[miacomet]

The tax plan will a net plus for many docs, but not great for many docs both inside and outside Utah. Even in Utah not all the docs are married with kids, and there are even some employed EM docs in Utah and many, many employed non-EM docs. The tax plan may be a net positive for married self-employed docs with lots of kids, but that's not everyone.

Even away from the coasts, the tax plan will not benefit a significant number of docs, especially the employed single docs or the docs with spouses who earn similar amounts.

 

[miacomet]

A 5% mostly flat tax is mid-range among the states I think. I agree the Utah phaseout of itemized deductions is kind of weird.

Maybe there will be a few docs whose taxes went up, but it might be a challenge to find a single doc without kids here. I've got one in my group of 18.

Try looking at the U. Lots of single docs without kids. Lots of single docs who work in the IHC clinics who don't have kids, or whose kids are independent. 18 people is not a significant percentage of 6831.

 

[EMdoc10]

There is a piece on nytimes? About one person forgiven ~250k. Supposedly somewhere around 250 people have been forgiven. I have 220k loans and I'm paying 2400/mo. I have 4 years left with a payoff of about 120k. I will have paid the value of the original loan and all interest will be forgiven in the end.

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-Paying solely the principal back sounds fair- congrats @shoal007! 2.4k/mo is fairly manageable.
-Hopefully over the next few years, we will hear of a lot more success stories. Last years' results would've been limited to the select group who meticulously followed PSLF with no errors/skips in the 120 payments.
-The catch is, different IDR plans are ideal during different phases of life. For instance (for those ineligible for PAYE), RePAYE when single and converting to IBR once married (to avoid having spouse's income considered + capping monthly payment to not exceed standard payment). Unfortunately, switching causes capitalization...which I suppose isn't a concern if striving for forgiveness ultimately

 

[The White Coat Investor]

I'm saying that with the new tax law, a single person earning between 200k-400k is now paying more federal income tax than they were before the tax laws took effect.

I think you need to read the tax law again. You seem rather confused by it or haven't actually run the numbers. Maybe you're trusting some sort of propaganda-publishing source? Let's go to the mat here. You say $200K-$400K. Let's take a single employee doc with a gross income of $300K and see what he's paying in federal tax. Let's assume this doc takes the standard deduction like 90% of Americans are expected to this year. Let's assume the doc puts $40K into a tax-deferred retirement account.

In the 2017 tax code, the exemption is $4,050. That starts phasing out above an AGI of $261K, which this doc is below. The standard deduction was $6,350. So this doc had an AGI of $260K and a taxable income of $249,600. What is the federal tax due on $249,600?

Well it's $46,643.75 + 28% of the amount between $191,651 and $249,600 = $62,869

In the 2018 tax code, there is no exemption and the standard deduction is $12,000

So AGI is $260,000 and taxable income is $248,000. What is the federal tax due on $248,000?

Well, it's $45,689.50 + 35% of the amount between $200K and $248K for a total of $62,489.

Your tax bill went down $400 on the same income. Now I'm not going to argue that's a significant drop, but you're going to have a very hard time arguing that's an increase.

 

[The White Coat Investor]

Try looking at the U. Lots of single docs without kids. Lots of single docs who work in the IHC clinics who don't have kids, or whose kids are independent. 18 people is not a significant percentage of 6831.

Dude. It's a joke about Utah. We have lots of kids here.

Never mind.

https://www.census.gov/population/socdemo/hh-fam/tabST-F1-2000.pdf

Were you talking Utah, or here on SDN? Because, if it was Utah, then your post is redundant. Clarify for me, man! Thanks.

I'm not sure why it isn't very clear that "here" referred to Utah given it was said in response to a comment that said:

Utah has fairly high state taxes and a weird formula for figuring them out based on federal taxable income. Don't you think single docs without kids may well end up paying more in your state, especially if they are employed and earn 200-400k?

 

[Apollyon]

Dude. It's a joke about Utah. We have lots of kids here.

Never mind.

https://www.census.gov/population/socdemo/hh-fam/tabST-F1-2000.pdf



I'm not sure why it isn't very clear that "here" referred to Utah given it was said in response to a comment that said:

Utah has fairly high state taxes and a weird formula for figuring them out based on federal taxable income. Don't you think single docs without kids may well end up paying more in your state, especially if they are employed and earn 200-400k?

(Handshake) "Hi, I'm a dolt. Nice to meet you!"