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

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  • #31




    where my immigrant neighbor making $15/hour unknowingly subsidized my now-radiologist classmate’s trip to Bali.
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    To be fair, most paying $15/hour aren't paying much in the federal income taxes that pay for PSLF. Not sure what being an immigrant has to do with it either.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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    • #32







      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.
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      Fair points, but I contend the last thing you would want to do to reduce the cost of a medical education (PSLF being part of the absurdly named "College Cost Reduction and Access Act") is make the cost immaterial to every party involved by making an unwilling, unknowing third party (the taxpayer) responsible for it all.  Forget mom's basement; why would you even keep an apartment rental reasonable if you don't have to pay for it?

      Make a student go to a loan officer at a bank and defend how he/she is going to pay back $300k in loans.  If the school can't keep the costs to a level that can be paid back, there isn't a loan.  Costs will come down REAL quick.  Since the student actually has to pay back the loan, there's no more Bali.  If the government wants to subsidize hard-to-fill non-profit jobs with a stipend/bonus, or specifically subsidize students from certain backgrounds, I'm game for that debate.  But, it's a defined amount, not a nearly blank check offered to college freshmen.  You have for-profit medical schools in the Caribbean right now accepting nearly half of applicants, enrolling >1500 first-year students per year, charging something like $80k/year, knowing that fewer than half will match into a residency, and not caring one bit, because the US taxpayer is on the hook for it all.  This is the absurdity of programs like PSLF.

      Without PSLF, my radiologist friend would have spent less, gotten a PP job, worked more, and paid more in income taxes.  The taxpayer would have saved ~$350k in subsidized loans/interest and gotten perhaps $175k more in income taxes over the post-training repayment portion of the loan.  That's a lot of money with which to figure out how to fill a hard-to-fill job.

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      • #33







        where my immigrant neighbor making $15/hour unknowingly subsidized my now-radiologist classmate’s trip to Bali.
        Click to expand…


        To be fair, most paying $15/hour aren’t paying much in the federal income taxes that pay for PSLF. Not sure what being an immigrant has to do with it either.
        Click to expand...


        I guess without more back-story the immigrant part is out of place.  Sorry- I meant no offense to anyone.  My neighbor came to this country speaking no English, worked as a dishwasher for minimum wage to be around people and learn the language, lived very simply, worked like crazy, saved like crazy, "deprived" himself to get kids through school, would never waste money on anything, etc.  I was mentally juxtaposing the "own bootstraps" ethic intrinsic to his own story of succeeding in this country with my radiologist colleague.

        And of course your point about him not paying huge amounts in taxes is also fair.  The principal of the thing, though...

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        • #34




           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...


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          Can they clarify this statement?

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          • #35






             

            Make a student go to a loan officer at a bank and defend how he/she is going to pay back $300k in loans.  If the school can’t keep the costs to a level that can be paid back, there isn’t a loan.  Costs will come down REAL quick.

            .
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            Not sure this is true. 27% of students right now are graduating debt free. The alternative outcome (and admittedly the real outcome would probably be some combination of our two proposed outcomes) is that only the children of the wealthy can now become doctors.
            Helping those who wear the white coat get a fair shake on Wall Street since 2011

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            • #36









               

              Make a student go to a loan officer at a bank and defend how he/she is going to pay back $300k in loans.  If the school can’t keep the costs to a level that can be paid back, there isn’t a loan.  Costs will come down REAL quick.

              .
              Click to expand…


              Not sure this is true. 27% of students right now are graduating debt free. The alternative outcome (and admittedly the real outcome would probably be some combination of our two proposed outcomes) is that only the children of the wealthy can now become doctors.
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              There would possibly be a rise in banks filling this niche, like DRB started with student loan refinancing, although this might be more like payday loans. Universities might also start making more loans (I had Perkins loans and a small one from the Endowment). You'd probably see pretty high interest rates until there was competition.

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              • #37
                Sorry for upsetting anyone and any hurt feelings. I started this thread because I was looking for information and opinions on the topic and I always learn a lot from you folks. Please make an effort to keep it civil and don’t bother the WCI with emails. I do think the Michal Lewis podcast is interesting (if one sided) and I think it is a complex problem . I honestly feel conflicted and see both sides. I personally paid back my loans quickly while living like a resident for 3-4 years + working extra, and I pay a lot of taxes so i agree the tax payers are getting a bad deal, but I also think our colleges are encouraging 18-22 year olds to borrow more than they should and I stand my my thoughts on student loans listed above.
                We can all:
                1. learn from each other (people with different views and experiences may have important info to offer),
                2. be considerate (this is more of a hot button issue than i realized), disagree without being disagreeable, but articulate your view so we can learn.

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                • #38
                  [ad hominem attack removed.]

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                  • #39
                    Noncontributory comment removed.

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                    • #40
                      Noncontributory comment removed.

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                      • #41


                        Noncontributory comment removed.

                        I always feel like I am in the minority when I talk with others about PSLF.  I am glad to learn there are others who agree with me.

                        The problem is that there are so many 501c3 jobs out there that qualify but are not really helping the public any more then a PP job.  In FM I took a employed job at a hospital that is a 501C3 and I would qualify if I did not already pay off my loans.  This job pays way more then the other local PP jobs.  I am not serving the community any better here then if I worked at the practice down the street.  It does not make sense.  If someone worked for half as much in a FQHC then yes they should get some perks for really helping out.  There are programs for that.

                         

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                        • #42
                          PSLF is a good program designed to help those who really need it. Physicians and other high income individuals don't really *need* it. Even if you graduated with $500k in debt and you make $200k, loans are payable as long as you live within your means. It'll take longer and you have to sacrifice but more doable compared to the social worker or teacher.

                          The real problem is cost of education and our misplaced priorities as a society. Tuition keeps going up disproportionately. More jobs are requiring additional education that doesn't help in the day to day workings of that job. Medical schools are making money hand over fist. C level position salaries are ridiculous. Athlete salaries are ridiculous. Why is a basketball/football coach the highest paid individual of most universities or public job of the state.

                          Most of the politicians that are calling for high taxes on the rich are talking more about the uber rich. There's probably less than a handful of people here that make more than $1M a year or have a net worth of $50M and we're, as a whole on this forum, already in the 1% of society. I don't get why facebook and others get mad at this idea as I'm sure none of those individuals would get effected by this tax. So the super majority of Americans wouldn't get effected of this tax let alone someone making $15/hr.

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                          • #43


                            Why is a basketball/football coach the highest paid individual of most universities or public job of the state.
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                            Because the amount of revenue that athletics (with football and basketball being the main two that often subsidize the other sports) bring in for a university is astounding.

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                            • #44




                              Most of the politicians that are calling for high taxes on the rich are talking more about the uber rich. There’s probably less than a handful of people here that make more than $1M a year or have a net worth of $50M and we’re, as a whole on this forum, already in the 1% of society. I don’t get why facebook and others get mad at this idea as I’m sure none of those individuals would get effected by this tax. So the super majority of Americans wouldn’t get effected of this tax let alone someone making $15/hr.
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                              Just because the tax does not affect me does not mean that I agree with it from a philosophical point of view.  Many of those Uber rich worked hard to get there and paid a ton in tax on the way.  The"lets tax them some more" mentality does not sit well with me.  Also if you give an inch sooner or later they will try to take the mile and it will start to affect us.

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                              • #45


                                Most of the politicians that are calling for high taxes on the rich are talking more about the uber rich. There’s probably less than a handful of people here that make more than $1M a year or have a net worth of $50M and we’re, as a whole on this forum, already in the 1% of society. I don’t get why facebook and others get mad at this idea as I’m sure none of those individuals would get effected by this tax. So the super majority of Americans wouldn’t get effected of this tax let alone someone making $15/hr.
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                                The 'it doesn't affect me" attitude is a dangerous one to have. Sooner rather than later, it will affect you.

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