Celebrating 10 years! 2007-2017

PSLF light at the end if the tunnel...?

Someone on Reddit student loan posts his/her experience on a ugly02/21/18
wow, major congratulations to this person! blackholelaw02/21/18
The masses know, shut it down now! triplesix02/21/18
Comments further on in the thread really sum it up: Yes, you onehell02/22/18
A lot of people are probably not proud of it. Many don’t w khazaddum02/22/18
Welfare for upper middle class. I don't see flyer14 crying a triplesix02/22/18
Actually, IIRC, the Trump plan of eliminating PSLF applies t lilgub02/22/18
That is interesting. So if you took out ANY loans prior to 7 onehell02/22/18
I think your attempt to shortcircuit the process would not b lilgub02/23/18
That is what I'm most interested in. Could I hypothetically thirdtierlaw02/22/18
As to your first part, the answer is yes you can. As to t qdllc02/23/18
I've thought about this. My worry is what happens when I lo mattbaileylawdotcom02/23/18
RE #2, what an interesting idea. Just avoid the tax bomb by onehell02/23/18
I don't understand why people are busting on President Trump plumber02/23/18
Current users are scared and don’t know the details. Lawye khazaddum02/23/18
ugly (Feb 21, 2018 - 2:04 pm)

Someone on Reddit student loan posts his/her experience on actually submitting and being approved for the PSLF application.

https://www.reddit.com/r/StudentLoans/comments/7x1no5/i_received_pslf_forgiveness/

There is also an ATL post about it, can't find the link at the moment.

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blackholelaw (Feb 21, 2018 - 3:20 pm)

wow, major congratulations to this person!

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triplesix (Feb 21, 2018 - 5:34 pm)

The masses know, shut it down now!

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onehell (Feb 22, 2018 - 11:18 am)

Comments further on in the thread really sum it up: Yes, you really can get forgiveness. No, it is not in jeopardy for existing borrowers and no, the government is not going to subject you to an adversarial process to get it, at least not if you work for an employer that automatically qualifies, which is most of the ones you'd expect.

People didn't trust this program to begin with. Trump and the ABA case only made that worse, but the fact is that Trump's plan doesn't apply retroactively and the ABA wasn't a 501c3.

If the EIN on your W-2 comes back to a 501c3 or government agency (or a series of such employers adding up to 120 payments), and (if the Trump plan passes) you will not take out any loans after 7/1/18, you are safe.

I am afraid that all this publicity will lead to people who could benefit from the program staying away from it. Everyone who actually achieves forgiveness should post stuff like this. This dude got over 180k forgiven, tax-free. It's one of those rare occasions when something that sounds too good to be true actually is true.

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khazaddum (Feb 22, 2018 - 11:30 am)

A lot of people are probably not proud of it. Many don’t want to inevitable hate mail.

The stories you WILL see are doctors in fancy hospitals having debt forgiven, highly paid federal Contract administrators getting forgiveness after buying missiles and drones to kill Afghani school children, legal counsel for the hospital’s accounts receivable department against uninsured patients getting forgiveness. Anything to sour public opinion.

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triplesix (Feb 22, 2018 - 11:38 am)

Welfare for upper middle class. I don't see flyer14 crying about this waste of taxes haha

American style capitalism: doc review monkeys subsidizing lives of well paid doctors and lawyers bc they already got excellent jobs!

Don't punish success.

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lilgub (Feb 22, 2018 - 12:12 pm)

Actually, IIRC, the Trump plan of eliminating PSLF applies to loans after 7/1/18 for those who begin taking loans after that date. If you're already enrolled and are working towards say, a social work degree, it is at least supposed to grandfather you in. How that would work for, say a law degree, and someone who works privately for a year or two before entering the public sector is another matter. Administratively, it seems they would have to blanket apply it to anyone who had a loan before 7.1.18.

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onehell (Feb 22, 2018 - 2:28 pm)

That is interesting. So if you took out ANY loans prior to 7/1/18 you're grandfathered for life, even for future loans that have nothing to do with the course of study for the loans from prior to that date? So like, you got a JD in January of 2018, worked for a few years, then went back to school for something totally different, you're still grandfathered for the new loans and can work towards PSLFing them if you get a gov't or nonprofit job when you leave school?

That'd be sweet.

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lilgub (Feb 23, 2018 - 1:18 pm)

I think your attempt to shortcircuit the process would not be well received. Like all other student loan plans, nothing is fully thought out, but I believe the essential point would be that students who entered and began college (and took out some loans) with the understanding that those loans would fall under PSLF would be grandfathered in.

Again, administratively it would be a nightmare and if I were in school, I wouldn't count on this.

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thirdtierlaw (Feb 22, 2018 - 10:12 pm)

That is what I'm most interested in. Could I hypothetically work in private practice for 10 years while keeping my IBR as low as possible, then go work for government at a lower salary for 10 years and get my loans forgiven tax free? I know that those answers don't exist yet. But just thinking out loud.

The other "shower thought" I had, are you forced to take loan forgiveness after 25 years on IBR? If the tax bomb still exists, could I ride out IBR until I retire, then keep a $0 monthly payment until I die? As of right now, I'm pretty sure federal student loans are forgiven upon death, so my estate would still be protected. Or alternatively work in private practice until I'm ready to retire then go work for a legal aid organization for cheap for a 10 year period.

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qdllc (Feb 23, 2018 - 7:56 am)

As to your first part, the answer is yes you can.

As to the second part, with IBR I believe the forgiveness is automatic as your loan comes to term just as a regular loan would be in default if not paid off by the last month.

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mattbaileylawdotcom (Feb 23, 2018 - 8:20 am)

I've thought about this. My worry is what happens when I lose my mind or am in the hospital an extended amount of time. I'm relying on my relatives to fill out the PAYE application. If they mess up, there goes a giant junk of my estate. Imo, it's better just to pay the tax bomb.

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onehell (Feb 23, 2018 - 4:45 pm)

RE #2, what an interesting idea. Just avoid the tax bomb by simply not asking for the forgiveness.

I suppose that could theoretically work, but it would apply to only a small number of people. You'd have to be living below 130% of poverty to have a zero payment, AND you'd have to NOT qualify for the insolvency exclusion (see IRS form 982) for it to be worthwhile.

So this scheme could work, but it would only be worth doing for people with significant net worth and low income. Pretty small subset of the population.

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plumber (Feb 23, 2018 - 8:58 am)

I don't understand why people are busting on President Trump. Obuma initially wanted to do away with PSLF and then he had it in his budget to lower the amount that could be forgiven to a somewhat insignificant amount. Now Trump wants to do away with the program in the future and allow bankruptcy as an option. What the heck is wrong with that?

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khazaddum (Feb 23, 2018 - 9:28 am)

Current users are scared and don’t know the details. Lawyers often don’t understand just how little an Average Joe understands legislation or statutes.

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