New Trump Executive Order —> Further Student Loan Deferrnent

[East coast]

Details are absent, but Trump said due to deadlock in DC regarding new stimulus, he will sign executive orders, including continuation of federal student loan interest forgiveness and loan deferment “indefinitely”.

interesting... particularly those of us on track for PSLF!

Yes, I mentioned this in a thread earlier this week - also important to note that this is based on a tweet. essentially meaningless.

However, the thing that PSLF-ers SHOULD ABSOLUTELY BE WATCHING OUT FOR in proposals is the fact that recent editions of actual legislation included a number of changes, including one that totally updates IDR plans. If you are going for PSLF and potentially thinking about changing your IDR in the future, be very watchful of the legislation because it's possible the plan you wanted to switch to won't be available (the proposals allowed you to stay in whatever plan you already are in even if it's not available for future loanees). Mainly thinking REPAYE to PAYErs out there.

Now on to my question: As a brand spanking new attending, I'm still confused why anyone would consider refinancing their federal student loans right now. I'm extremely hesitant to get rid of federal loans given the governments willingness to offer me $0 monthly payments and 0% interest. I'm not seeing the downside to throwing what I would pay each month into my high interest savings account and wait for the day my payments actually restart. This day is starting to look further and further out (possibly 12 months!).

This seems so clear-cut to me, but I feel like so much of what I read on WCI is "refinance on 9/30, rates will go up because of demand, etc etc." Federal loans seem to be a pretty safe bet for me right now. The last thing I want to do is commit myself to 5 or 6 figure monthly payments if another shutdown could threaten my current employment (associates were laid off during the first shutdown and quickly brought back). I'm always able to refi later when the pandemic is over and the CARES act provisions actually end.

I think the only place you see it here is when WCI posts about it - this is because he has a huge monetary incentive to convince you to refinance. I don't mean that as a criticism, but he toes the line closely between good advice and bad advice based on what's best for the business behind the website.

[Frozensection]

Why would either political party want to be on the hook for being the ones who “forced student loan repayments during a pandemic?” Trump is starting his campaign run. He’s always shown a willingness to be an economic populist.
refinance rates are very tempting. I’m two years from attending status, so my decision is easy. Still, I’d take the free payments (if it officially goes through) and create some side fund (savings account, start a side hustle) with the extra money. Then re-assess after the student loan freeze expires.

[Frozensection]

Ok, well the executive order was signed just now. Payroll tax cut (what does that do?), no student loan payments until January it seems. He even hinted the cuts could last longer.
i just can’t see why new attendings would re-finance. The politics of student loans appears to be here to stay.

[nephron]

This is very perplexing to me from a constitutional perspective. I thought that this all had to be approved by congress?

[nephron]

rats, they excluded us from the payroll tax deduction holiday (for people making less then 100K). This is going to cause a mess next April, I don't know how they are going to calculate how much people owe with all of these changes. That plus the legal challenges means that the amount could be a moving target. I think that this was a stupid idea. I'm kind of glad they left us out of it as I suspect that taxes will be super-complicated next year while they figure out if what they did was even legal.

[Frozensection]

It appears Trump found some sort of loophole. I don’t think Democrats expected a Republican to use the loophole to go easy on student loans. Trump has a lot of Bernie Sanders in him, surprising coming from a NYC billionaire.

[TheDangerZone]

It appears Trump found some sort of loophole. I don’t think Democrats expected a Republican to use the loophole to go easy on student loans. Trump has a lot of Bernie Sanders in him, surprising coming from a NYC billionaire.

I read Trump also plans to forgive student loan interest. Would be pretty sweet to have student loan payments halted a few more months. Trump is quite the guy.

Keep going, you’ll get a bite soon, I’m sure.

[East coast]

Loophole is a strong word..all he's doing is saying "I can do whatever I want, sue me". We'll see. It appears this was just regarding halted payments and 0% interest, not PSLF counted payments (which was added in the actual legislation last go around in March).

[pslfhopeful]

This is very perplexing to me from a constitutional perspective. I thought that this all had to be approved by congress?

Perplexing to you, and the founding fathers as well.

If this 0% interest, halted payments and PSLF qualification thing works out, I stand to benefit tremendously. The CARES act resulted in +$19,800 of avoided 6 months capped payments for IBR.

Politically, I think this is atrocious. I am fortunate enough to have kept my W2 academic physician job and did NOT have a reduction in salary. There is absolutely NO reason why I should have been allowed to enjoy this benefit. It should have been phased out above a certain salary and/or if you lost your job. We have politicians on both sides that have no idea yet how PSLF is benefiting **generally** wealthy physicians.

I'm on pace for PSLF forgiveness in March 2022. Although the earliest borrowers have submitted for forgiveness and some have received it, a VERY large tranche of white coat investors will reach forgiveness in the spring of 2022 and the next several years. I fully expect a large expose in a large news paper to expose the loophole and it will be closed (likely grandfathering in quite a bit of people along the way).

[wa2106]

Perplexing to you, and the founding fathers as well.

If this 0% interest, halted payments and PSLF qualification thing works out, I stand to benefit tremendously. The CARES act resulted in +$19,800 of avoided 6 months capped payments for IBR.

Politically, I think this is atrocious. I am fortunate enough to have kept my W2 academic physician job and did NOT have a reduction in salary. There is absolutely NO reason why I should have been allowed to enjoy this benefit. It should have been phased out above a certain salary and/or if you lost your job. We have politicians on both sides that have no idea yet how PSLF is benefiting **generally** wealthy physicians.

I'm on pace for PSLF forgiveness in March 2022. Although the earliest borrowers have submitted for forgiveness and some have received it, a VERY large tranche of white coat investors will reach forgiveness in the spring of 2022 and the next several years. I fully expect a large expose in a large news paper to expose the loophole and it will be closed (likely grandfathering in quite a bit of people along the way).

Yes and if the news articles just contact you for a quote I have no doubt you will be right.

[ID Doc]

Here's the executive order: https://www.whitehouse.gov/president...d-19-pandemic/

Not super clear to me. Doesn't seem like he's extending the provisions of the CARES Act (which has the non-payments count for PSLF), just directing the Secretary of Education to allow for the continued "temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020."

If the Executive Order stands, I suppose we'll have to wait to see how the Department of Education enacts it, but I imagine for those of us going for PSLF that it's going to make sense to start paying again in October 2020 as previously planned. Right?

[GastroMastro]

rats, they excluded us from the payroll tax deduction holiday (for people making less then 100K). This is going to cause a mess next April, I don't know how they are going to calculate how much people owe with all of these changes. That plus the legal challenges means that the amount could be a moving target. I think that this was a stupid idea. I'm kind of glad they left us out of it as I suspect that taxes will be super-complicated next year while they figure out if what they did was even legal.

But it’s not a deduction is it? It’s a deferral. Those taxes will be due at some point even for those making <100,000

[Lordosis]

0% interest makes sense. Deferred payments temporarily makes sense. Letting it count towards pslf does not.

[Dusn]

But it’s not a deduction is it? It’s a deferral. Those taxes will be due at some point even for those making <100,000

But it’s a deferral without an end date, correct? So some future politician will need to be willing to take the political hit to reinstate them.

so does this payroll tax holiday affect how we pay our nannies? I’m not really sure what to do there.

[Dusn]

But it’s not a deduction is it? It’s a deferral. Those taxes will be due at some point even for those making <100,000

i just wanted to include the following quotation from the executive order in order to hear what other people think it means:

“The Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.”