Trump suggests eliminating PSLF

[blowhard]

http://www.slate.com/blogs/moneybox/2017/05/17/the_trump_administration_wants_to_end_the_public_s ervice_loan_forgiveness.html

Let's see where this goes...

[pistolpete]

Definitely saw that one coming. Will be interesting to see what happens.

[Kamban]

I started a thread on this topic a couple of months ago

This is a quote from the article

For instance, a lot of very well-paid doctors who work at nonprofit hospitals are set to benefit from it, even though that wasn't really the program's intent

 

Since non profit hospitals have been buying up practices and employing physicians and specialists at or above market rates, why should those physicians be eligible for PSLF. That was not what the program was to be meant for.

[Craigy]

It was on the chopping block regardless of political party.

IMO this is a good thing ultimately but it would be a terrible thing if the feds tried to stiff current borrowers/enrollees.

It's a complete handout, and directly subsidizes schools and encourages them to continue letting tuition soar.

The author of the article is disingenuous IMO.  Not even discussing highly paid nonprofit employees/docs, the vast majority of public employees, including teachers, firemen, you name it, are well paid and have good benefits, usually far better benefits than for-profit employees.  A lot of state and federal agencies offer their own student loan bonus programs to begin with.

It's true you can spend half a million getting through law school to become an assistant DA and only make $60k, but that's an irresponsible choice that the taxpayer should not be forced to bear.  If becoming a public defender or ADA is your calling, you know the money situation going in, and you go to state schools and get the same law license as anyone else.  You don't need a law degree from Harvard or Columbia to be a public defender.  It's like someone saying the public should subsidize an ADA's Brioni suit and Patek Philippe watch since he or she needs to look good in the courtroom.

Same thing goes for teachers or anyone else who knows the pay isn't stellar-- you don't need a $400,000.00 education to get the job.  And sometimes the pay is pretty stellar.

 

 

[Craigy]

Kamban wrote:

I started a thread on this topic a couple of months ago

This is a quote from the article

For instance, a lot of very well-paid doctors who work at nonprofit hospitals are set to benefit from it, even though that wasn’t really the program’s intent

 

Since non profit hospitals have been buying up practices and employing physicians and specialists at or above market rates, why should those physicians be eligible for PSLF. That was not what the program was to be meant for.

Click to expand...

Why not?  How is it not meant for doctors?  Do they not provide a public service?  Perhaps they just worked too hard and provide a service that's too valuable to society to qualify?  

[RogueDadMD]

Here's the CNN article on it:

http://money.cnn.com/2017/05/18/pf/college/betsy-devos-public-service-loan-forgiveness/index.html

I have no dog in the fight directly given that I had minimal loans and paid them off awhile ago.

However I work in an academic setting where salaries are well below the median and where people coming out of our medical school are essentially guaranteed $200k in loan debt or more without significant family or other support/means.

I understand it wasn't the purpose of the program to subsidize doctors with high loan burdens, but I do not actually see why it would be inappropriate to apply it to this group.  Medical schools were already inflating tuition before PSLF (though I have no idea how much the program existence has impacted it overall).  Maybe eliminating PSLF will get these places to lower tuition or higher salaries -- they won't have a choice if people stop going to school there or stop taking faculty jobs there.

However the big name med schools causing high debt are going to keep filling their spots -- the demand to enter med school is still high.  The academic places aren't going to jack up salaries by 50%, which really just means you're going to drive people away from working in those settings if loan forgiveness isn't an option.

That would be great for rural America and other underserved areas that pay way more I suppose...

[thryoid_storm]

I agree with eliminating PSLF

many (NOT ALL) doctors take advantage of the system which is wrong

they live lavishly on tax payers dime taking out max loans and no concepts of budgeting and just expect uncle sam to pay at the end.

 

[RogueDadMD]

thryoid_storm wrote:

many (NOT ALL) doctors take advantage of the system which is wrong they live lavishly on tax payers dime taking out max loans and no concepts of budgeting and just expect uncle sam to pay at the end.

Click to expand...

I can't give percentages, but even saying "many" (I think you are implying that a majority) intentionally live a lavish lifestyle based on loan forgiveness is a false statement.

I am sure there are people who are able to get max salary and a lot of loan forgiveness as well and thus game the system, however "many" also need that loan forgiveness just to have a regular lifestyle.  There are plenty of doctors making $100-200k who have more than that in loans and who not living a lavish lifestyle.

[WallStreetPhysician]

Doesn't Trump have more pressing issues to attend to at the moment...

[hightower]

No surprise there.  But don't fool yourself into thinking that the Whitehouse is doing it for any reason other than to stroke Donald's ego.  Donald will eliminate anything that doesn't directly benefit him, even if it harms nature or is bad for the country as a whole.  He will also eliminate anything that Obama did, just because he can.  He doesn't care, because he's an ego driven nut job.  I'm sure they'll be getting rid of tax credits for solar, electric vehicles soon too.  Oh and why not go ahead and defund the national park system and overturn the antiquities act while you're at it Donny boy.  Make sure you take a dump on everything but your own bank account.  That's the far right agenda isn't it?
My only hope for this administration is that they don't start a nuclear war.  That's it.  I am otherwise certain that everything I care about will be chopped or hurt in some way by that disgusting clown.  Seeing him get impeached AND removed from office would be my wildest dream come true.  I would rather see those two things occur than win the powerball jackpot.

How's that for a rosy political outlook? Ha!  I promise that's the last negative thing I'll say today.

But seriously, I too agree that the government shouldn't be subsidizing student loans (or mortgages for that matter).  Instead, they should be providing higher education to anyone who wants it and also paying for universal healthcare.  All paid for by a tax system in which everyone pays their fair share.

[adventure]

thryoid_storm wrote:

I agree with eliminating PSLF

many (NOT ALL) doctors take advantage of the system which is wrong

they live lavishly on tax payers dime taking out max loans and no concepts of budgeting and just expect uncle sam to pay at the end.

 

Click to expand...

Playing by the rules of the system isn't wrong. Deploying an poorly designed initial system was certainly wrong. To quote WCI, I'll happily pay what I owe, but not a cent more. I (and nearly every economist) agree that the mortgage interest exemption is stupid, but I still claim in. I can't agree that using a system how it is deployed is wrong.

I agree I shouldn't be paying for such things as a tax payer, but this gets grey pretty quickly.

[ticker]

Rogue Dad, M.D. wrote:

thryoid_storm wrote:

many (NOT ALL) doctors take advantage of the system which is wrong they live lavishly on tax payers dime taking out max loans and no concepts of budgeting and just expect uncle sam to pay at the end. 

Click to expand…

I can’t give percentages, but even saying “many” (I think you are implying that a majority) intentionally live a lavish lifestyle based on loan forgiveness is a false statement.

I am sure there are people who are able to get max salary and a lot of loan forgiveness as well and thus game the system, however “many” also need that loan forgiveness just to have a regular lifestyle.  There are plenty of doctors making $100-200k who have more than that in loans and who not living a lavish lifestyle.

Click to expand...

I would contend that PSLF has corrosive effects that begin far earlier.  One of my medical school friends visited over 30 countries during medical school and cited PSLF as the reason why she could.  And why not?  While that example is in the extreme, the housing/car choices of many of my classmates were being influenced by PSLF even in the first year of medical school.  And, the higher the loan burden, the most ridiculous it would be to even try to pay it off!  I know two resident-resident couples with over $1 million in loans (private college+ private medical school+ posh living+ vacations in the South Pacific).  There is absolutely no way they would have ended up at that number except for the promise offered by PSLF.  The program allows a lot of medical students and residents to create horrible financial habits.

[FIREshrink]

The idea of PSLF is that someone working in a non-profit is 1. providing a good to society and 2. taking a pay cut to do so. But most docs working for non-profits only meet the first criteria, not the second. My non-profit employer is a 3 state healthcare system with 15,000 employees. It pays market wages because in some ways, it IS the market. I'm not taking a pay cut to work for my employer. I should not qualify for PSLF.

[Craigy]

Rogue Dad, M.D. wrote:

thryoid_storm wrote:

many (NOT ALL) doctors take advantage of the system which is wrong they live lavishly on tax payers dime taking out max loans and no concepts of budgeting and just expect uncle sam to pay at the end. 

Click to expand…

I can’t give percentages, but even saying “many” (I think you are implying that a majority) intentionally live a lavish lifestyle based on loan forgiveness is a false statement.

I am sure there are people who are able to get max salary and a lot of loan forgiveness as well and thus game the system, however “many” also need that loan forgiveness just to have a regular lifestyle.  There are plenty of doctors making $100-200k who have more than that in loans and who not living a lavish lifestyle.

Click to expand...

Just a few years ago I can attest that it was the norm for most students to take the max loans and blow through it.  When it came time for extra expenses beyond tuition like step 1 and such, most people (not just many, but a majority) had to sign up for an extra loan since they couldn't squeeze it in to their budgets.  There was a minority of people who were on their parents dime and didn't take loans, but those people also tended to live lavishly with the parents' credit card.  Even students who didn't spend big on trips, partying, lifestyle would do things like buy cars with student loan money.  Outside of medschool I encountered many people who found ways to extend their grad school experience "oh I'm going to have an MBA now!" just so they could tap into extra cash and avoid having to find a job for another year.

[Craigy]

FIREshrink wrote:

The idea of PSLF is that someone working in a non-profit is 1. providing a good to society and 2. taking a pay cut to do so. But most docs working for non-profits only meet the first criteria, not the second. My non-profit employer is a 3 state healthcare system with 15,000 employees. It pays market wages because in some ways, it IS the market. I’m not taking a pay cut to work for my employer. I should not qualify for PSLF.

Click to expand...

Most people working for gov't or non-profits only meet the first criteria and not the second.

There are definitely people who take a pay cut to work for X, Y or Z but most of them earn a market salary with good benefits.