Student loans: Michael Lewis exposes some pretty nasty behavior regarding PSLF

[ticker]

It does seem to me that there is something morally lacking in signing a master promissory note swearing to pay back a loan while explicitly planning to not pay back the loan.  Government-sanctioned perjury, or something. But, I'd throw the first stone (or 10) at the government that condones it rather than those who take advantage of it.

I worked 2 jobs through medical school and lived in mom's basement to keep loans to a minimum.  A classmate of mine started school with less money (like, almost $0) went the PSLF route, took the maximum loans, and managed to visit 30 countries during medical school.    I think PSLF is debatable for the social workers, teachers, and public defenders of the world (though I'd still object strongly).  But, I think it's just stupid within medicine, in which you have situations where my immigrant neighbor making $15/hour unknowingly subsidized my now-radiologist classmate's trip to Bali.

[Panscan]

jhwkr542 wrote:

Lots of hawt taeks being spewed. I haven’t seen a good solution from a politician yet although I haven’t followed all of the lesser known Democratic candidates. Republicans seem more free market based whereas Sanders, AOC, and Warren’s utopian plans are not practical (and have no chance of passing either so why bother spewing such nonsensical rhetoric).

I don’t buy Lewis’s stupid take either. This isn’t your boss promising you a promotion if you work hard. This is a governmental program with set rules (although kinda squishy for those trying with non-501c3 orgs). I have documentation on my wife’s loans that X number of payments qualify. It’s updated with every bill and confirmed every year. She’s on the same payment plan and working for the same organization. If she gets to 120 payments and they say “well actually…”, they will be sued. They already have and already lost once.

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and you're relying on $7/hr workers to certify that those rules are met

[jhwkr542]

That's why I think it's riskier to certify non-501c3 employers. For most docs, it should be: were the payments on ibr, paye, or RePAYE? Check. 501c3? Check. I'd trust a minimum wage employee to be able to do that. Moreso when the loans are consolidated early with FedLoan and the payments have been getting certified every year.

[Panscan]

jhwkr542 wrote:

That’s why I think it’s riskier to certify non-501c3 employers. For most docs, it should be: were the payments on ibr, paye, or RePAYE? Check. 501c3? Check. I’d trust a minimum wage employee to be able to do that. Moreso when the loans are consolidated early with FedLoan and the payments have been getting certified every year.

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That's easy to say, yet numerous people are having issues with it

[ENT Doc]

wa2106 wrote:

ENT Doc wrote:

wa2106 wrote:

ENT Doc wrote:

I think taking out debt, funded by the taxpayer, and not paying that debt back (and knowing that you’re not going to from the get-go) is immoral, regardless of what the law allows. There isn’t a shred of personal accountability attached to this.

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Normally I like your comments ENT Doc (and maybe I’m mis-reading it) but PSLF is designed to reward those who take lower-paying jobs that provide a public service.  The debt is paid back via service rather than the full price.

To imply that those seeking PSLF are immoral is a failure on your part.

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No, you are not misreading my comments.  So you think that joining an organization with a 501(c)(3) attached to it necessarily is lower paying, or provides higher value than a non-501(c)(3), or rather that people not joining 501(c)(3)s aren’t serving the public?  Please elaborate on that.

I don’t think those who created PSLF intended it to apply to a bunch of doctors who have the means to pay for their education.  And regardless of the intent of the intent of the legislation the original point still stands.  You want to “serve the public”?  Join the military or a like program that pays up front as an expressed part of the contract.  But don’t delude yourself into thinking that 501(c)(3)s, where the majority of doctors seek refuge to have this paid for, are remotely on par with that level of service.

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Don’t make this into something I didn’t say.  I didn’t use the word “immoral” to describe those who are pursuing PSLF.

Public service is defined by the legislation.

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Indeed it may be.  Which gets back to my original point - regardless of what the legislation or definitions say there is still a moral issue here.  Take the other extreme with poor people, not high income doctors trying to get the taxpayers to fund their education.  Do you think it's moral to have kids, knowing that you can't pay for any of their care and that someone else is going to have to pay for it?  I certainly don't.  But the law says it's ok.  The point in both extremes is that the law doesn't implies morality or personal accountability.

[Panscan]

ya I really think the program is intended for like inner city teachers and social workers and etc. even a FM doc making 200k can pay off 400k if they put in the work compared to a social worker making 30k with like 130k in debt

[docnews]

Navient (Sallie Mae spin off after sued by govt for screwing military families) is a criminal enterprise. You know what's worse than a government program? A government contractor with no oversight. My main reason to refinance in residency (thanks wci) was to get away from Navient that would change my direct payment without notice and not fix it. I saved taped phone calls with them and if I had a JD instead of MD I would have continued the battle. Instead I paid them off quickly and got on with my life.

I agree pslf is bad policy. But govt policy are promises and should be fairly implemented.

[antheus]

The issue is not PSLF, it is the cost of education in general. Either the government is subsidizing education on the front end (i.e. cheaper tuition) or it is subsidizing it on the back end (i.e. loan forgiveness). The fact that the option even exists for someone aged 18+ to rack up $200k+ in debt is an abomination. That is the immorality.

[ER-Rad]

ENT doc, I am not sure if I understand your moral argument here. I work at a 501c3 organization and plan on applying for PSLF. If PSLF did not exist, I might be at the same job, but there is a pretty significant chance I would be at a PP job. Instead, I spend much more time teaching residents, doing research, and taking care of much poorer patients that I would otherwise be taking care of. Is it somehow immoral for me to fill out a PSLF application rather than spending an extra 50K or so paying for my loans by other means? I don't buy it.

[Tangler]

Appreciate all the comments and input. I always learn so much from people on this forum and I really do appreciate the input/effort.

[wa2106]

There's a difference in the morality of someone (like me) who took out student loans, intended to pay them back, will still pay back the majority of the original borrowed amount but will (hopefully) have some amount forgiven after working for 10 years in a government job and someone who takes out loans and runs up the price with the assumption that they'll be forgiven.

I finished medical school when no one, and certainly not me, knew about PSLF.

There should definitely be a maximum amount forgiven to prevent moral hazard.  But let's the honest the interest rate the government charges as essentially a monopoly is far above the market rate or these refinancing companies wouldn't exist.

[MSooner]

ticker wrote:

It does seem to me that there is something morally lacking in signing a master promissory note swearing to pay back a loan while explicitly planning to not pay back the loan.  Government-sanctioned perjury, or something. But, I’d throw the first stone (or 10) at the government that condones it rather than those who take advantage of it.

I worked 2 jobs through medical school and lived in mom’s basement to keep loans to a minimum.  A classmate of mine started school with less money (like, almost $0) went the PSLF route, took the maximum loans, and managed to visit 30 countries during medical school.    I think PSLF is debatable for the social workers, teachers, and public defenders of the world (though I’d still object strongly).  But, I think it’s just stupid within medicine, in which you have situations where my immigrant neighbor making $15/hour unknowingly subsidized my now-radiologist classmate’s trip to Bali.

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Overall I sort of feel like the program really should be meant for the social workers of the world. That being said, you cannot always do much to reduce cost of a medical education. My husband had to sign something saying he wouldn't work (outside of sponsored summer research gigs) throughout med school. A "living in your mom's basement" type situation isn't usually an option either. Not to say you cant try and keep those costs low, but how many med students have the choice to attend med school in their hometown?

I do think it is a great thing for primary care docs. Even specialists are are still paying in ~3-4 years at a rate determined by an attending salary . I'm assuming your now-radiologist classmate is working at an academic institution--he/she could be making $50-$150k (or more) a year elsewhere. We know for a fact that PSLF is solely what is keeping at least one attending where we are now.

[Lordosis]

There should be a program to forgive the mortgages on all the doctors living in HCOL areas.
Oh and one to forgive my car loan. Then I will get that Tesla for sure.
I gotta furnish this big doctor house. I guess we need a program to pay off my credit card debt.

[The White Coat Investor]

Getting anonymous complaints about this thread.

In case it isn't obvious, everything said on the forum does not represent my personal views on a subject. If the complainant had left a real email address, I would have responded privately. Once more, I encourage forum participants to follow the two great rules of the internet:

# 1 Be kinder to one another than you think you need to be and

# 2 Have very thick skin.

Moving thread to the lounge.

Do something about this...

https://www.whitecoatinvestor.com/forums/topic/student-loans-michael-lewis-exposes-some-pretty-nasty-behavior-regarding-pslf/page/2/#post-210669

I don't understand the rage and ad hominem attacks against some of us

who have received loan forgiveness by working in underserved areas...

This reflects poorly on the FI community.... Surely you don't condone

the repeated mischaracterizations of this thread...

[The White Coat Investor]

Another complaint about this thread in my email box. What is with the new trend of sending me emails when you disagree with something someone wrote on the forum? The best disinfectant is sunlight. If you disagree with someone, politely say so and explain your reasoning. That's the purpose of a forum. And in case no one is aware that I do have a "blog series" on PSLF that I started in 2011:

https://cse.google.com/cse?cx=partner-pub-3400277571907334:4856943070&ie=UTF-8&q=pslf

I count at least 8 previous blog posts on the subject.

If a post is violating forum rules, please be specific about the rule and the post. Time I spend moderating this forum is time I cannot spend personally helping someone or creating new content or trying to reach others with the "WCI message."

If you are interested in being a moderator, please let me know. We can always use more help.

Perhaps you should have a blog series on PSLF, rather than let

misinformation saturate the WCI forum:

https://www.whitecoatinvestor.com/forums/topic/student-loans-michael-lewis-exposes-some-pretty-nasty-behavior-regarding-pslf/page/2/#post-210596

High-paying specialities are excluded from PSLF. Family practice and

Pediatrics? That's more in line with federal funding. Sounds like this

user just has an axe to grind against a friend who got PRIVATE loan

forgiveness from a PRIVATE hospital... NOT public and NOT subsidized

by the taxpayer.



https://www.whitecoatinvestor.com/forums/topic/student-loans-michael-lewis-exposes-some-pretty-nasty-behavior-regarding-pslf/#post-210543

PSLF is "immoral?" It is morally wrong to have governmental programs

serving the greater public good? It is immoral for me to pursue an

underserved area in order to alleviate my student loan debt? I did not

realize this site was such a libertarian hotbed for anti-tax whining.



https://www.whitecoatinvestor.com/forums/topic/student-loans-michael-lewis-exposes-some-pretty-nasty-behavior-regarding-pslf/#post-210556

Yet again, more misinformation, assuming loan forgiveness is federally

funded in all 501c3 organizations. What a load of nonsense. Pardon my

strong feelings on the subject matter...