Future of PSLF?

[Raymond Oliver]

I'm a 5th year neurosurgery resident with $370,000 in student loan debt at 7.5% interest (thanks to a private medical school in California).  My program is 7 years and I will be doing a fellowship.  PSLF is the obvious choice for me, and I've faithfully been making the $350ish payment in income based repayment every month.  That payment hurts on a resident's salary.

I'm wondering what people think the future of PSLF will be given the, for lack of a better word, political volatility in Washington these days.  If PSLF is terminated, is being grandfathered in a guarantee?  I could have been using that monthly loan payment to pay off some other debt or invest in retirement.  I'm actively enrolled in the PSLF program.  Every month I watch that "PSLF payments" number tick up on my monthly bill, indicating that I'm one more payment closer to forgiveness.  It would seriously hurt my financial plans to have this program vanish being halfway towards forgiveness.  What are the thoughts here?  Sorry if this question has been asked before.

[jhwkr542]

It's anybody's guess but I think those that are realistic see it will be altered probably as soon as the government realizes how many people's debts they're forgiving (ie within the next year). I think people will be grandfathered if you've already applied so make sure you get your employment verification in just to be safe.

[DMFA]

Nothing is guaranteed, but it's likely. The current recommendation is to proceed like it's happening, but build a taxable just-in-case fund.

You're already certifying your current payments for PSLF, right?

[Raymond Oliver]

Yep.  That's how you get your little PSLF countdown to appear on your bills.  States, very clearly, that I've made X payments out of 120 on every bill.

[pierre]

Why do you certify every month?

Yearly seems to be the normal recommendation.

[initforthelonghaul]

Woah, wait... what do you mean by "certify PSLF"? I thought I was on top of this, but I had no idea there was an official certification other than qualifying each year for an IBR payment plan and making your monthly payments...

How do you go about "certifying"? Can you retroactively certify past payments as well?

[Raymond Oliver]

pierre wrote:

Why do you certify every month?

Yearly seems to be the normal recommendation.

No, I don't re-certify every month.  Once you do it the first time, it shows you your countdown on each subsequent bill.  It's very satisfying seeing that number change, ever so slowly.

initforthelonghaul wrote:

Woah, wait… what do you mean by “certify PSLF”? I thought I was on top of this, but I had no idea there was an official certification other than qualifying each year for an IBR payment plan and making your monthly payments…

How do you go about “certifying”? Can you retroactively certify past payments as well?

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Yes, you have to certify your employer qualifies you for "public service."  There's a form on the website (https://studentaid.ed.gov/sa/sites/default/files/public-service-employment-certification-form.pdf) that you fill out, have your employer sign and you're good to go.  It takes about six months for them to process the form and then they send you a nice letter saying that you qualify and you have X numbers of payments left.  This will certify all your prior employment as well, as long as it's with the same employer (separate form for each employer).  It's very simple, but it does take a good amount of time for the form to process.  I would recommend getting it started just in case...

[The White Coat Investor]

I would be very surprised if you weren't grandfathered in if there were any changes.

[initforthelonghaul]

Raymond Oliver wrote:

Yes, you have to certify your employer qualifies you for “public service.” There’s a form on the website (https://studentaid.ed.gov/sa/sites/default/files/public-service-employment-certification-form.pdf) that you fill out, have your employer sign and you’re good to go. It takes about six months for them to process the form and then they send you a nice letter saying that you qualify and you have X numbers of payments left. This will certify all your prior employment as well, as long as it’s with the same employer (separate form for each employer). It’s very simple, but it does take a good amount of time for the form to process. I would recommend getting it started just in case…

Click to expand...

Thank you very much - so helpful!  Yet another instance where this forum/blog has clarified some hugely important information for me!

[scbunker]

Raymond Oliver wrote:

It’s very satisfying seeing that number change, ever so slowly.

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They change your number each month?

Our number changes only when we recertify and they do a "payment tracking" in which they go back and check all your payments since the last payment tracking and add that number to the PSLF qualifying payments. They began putting the qualifying payments on our billing statement last August and the number hasn't changed since then. That's because they won't do another payment tracking until June when we recertify.

I called them a while back to clarify all this. They said that payment tracking is actually a manual process and they will do it no more frequently than every 90 days and only on recertification or by request.

[Frenchy1011]

NotADoc wrote:

They change your number each month? Our number changes only when we recertify and they do a “payment tracking” in which they go back and check all your payments since the last payment tracking and add that number to the PSLF qualifying payments. They began putting the qualifying payments on our billing statement last August and the number hasn’t changed since then. That’s because they won’t do another payment tracking until June when we recertify. I called them a while back to clarify all this. They said that payment tracking is actually a manual process and they will do it no more frequently than every 90 days and only on recertification or by request.

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I agree this is how it works for me as well. The number does not change until I recertify yearly, then it changes. I also called FedLoan to make sure this was how it worked a few months back. I'm not sure how you get the numbers to keep going up on every bill, sounds to be somewhat different than what we are seeing. Hopefully either way it works out.

 

I am 3.5 years into my payments, and have recertified every year, so definitely planning on the grandfathering aspect of this haha.

[Wings3496]

Just saw this about PSLF today, may not bode well for the program:

https://www.nytimes.com/2017/03/30/business/student-loan-forgiveness-program-lawsuit.html?_r=0

[Future Proof MD]

That's 100% messed up. I anticipated changes as we near the eligibility date but didn't see the Ed Dept simply go back on its word. Doubt this will stand in court though, especially it's literally an army of lawyers suing them.

[DMFA]

Wings3496 wrote:

Just saw this about PSLF today, may not bode well for the program:

https://www.nytimes.com/2017/03/30/business/student-loan-forgiveness-program-lawsuit.html?_r=0

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Fear-mongering, rubbish journalism. Those organizations clearly shouldn't have been approved. Copied from another thread I posted in a few minutes ago:

It is taken way out of proportion and improperly casts doubt on everyone ever based on four non-representative examples. Further, it’s just a rehash of a substantially identical article from Dec 2016.

The organizations weren’t qualified, in most cases not 501(c)(3), and it should have been fairly clear (advocacy organizations) that they didn’t fit under the categories for acceptable non-501(c)(3) nonprofits.

Yes, it’s always possible some drone behind a desk did something incorrectly. But when you can clearly read the rules and you clearly, unambiguously fit within them – government orgs in particular – there should be zero uncertainty vis-à-vis eligibility based on employment. The lack of appeal process and retroactive borrower liability are problematic, though, but shouldn’t send you into a panic.

Now, as for whether they’ll continue the program due to other factors, different story.

I’m sure it got them tons of clicks, though. Traffic = money.