Public Service Loan Forgiveness

[Clonefan32]

NPR ran an interesting article about the dyfunction of Public Service Loan Forgiveness. I know several people who are absolutely relying on this program financially. They are making minimum payments in lower paying jobs with the understanding they will be out from under their loans in 10 years. Sounds like that may be a bit more complicated than they had hoped.

Personally, I was at one point in a job where I was taking advantage of that program. I had intended to stay the whole 10 years. Part of my reasoning for leaving the job was not feeling very secure completely hitching my wagon to the loan forgiveness.

Anyone out there experienced similar issues with this?



https://www.npr.org/2018/10/18/6584...letters-about-public-service-loan-forgiveness

Also I debated putting this in the Cave. If the need arises please move it.

 

[ArgentCy]

Surprise. Man, I love Archer. The gun went off for no reason, surprise.

But anyhow, how can anyone be surprised that a program run by the government to forgive government loans is a freaking mess.

 

[ArgentCy]

For actual advice I would go with the Dave Ramsey advice. Probably not wise to chain yourself to a job for 10 years in the hopes of having your loans paid off. Just pay them off as quickly as you can and don't stay in a job solely for that reason.

 

[HitItHard58]

I'm pretty pessimistic and I always thought it sounded too good to be true so I haven't looked into it much. I work for a non profit providing respite and scl services for kids with special needs. Would I qualify? Guessing they would find a way to screw me like they have plenty of others.

 

[wxman1]

I believe I know a guy that did something like that as a Dr (pretty sure he lurks on here at the very least). He took a job in rural Nebraska to pay off his loans. Not sure what the terms were. I am a big help.

 

[SoapyCy]

Our loans are long gone but it seems like there would have been a simple formula to follow:

Majors X, Y, and Z qualify
Loans with Programs X, Y, and Z qualify

 

[Rabbuk]

Our loans are long gone but it seems like there would have been a simple formula to follow:

Majors X, Y, and Z qualify
Loans with Programs X, Y, and Z qualify

It has to be Federal loans and it's certain jobs I believe. I put in 7 years in a position that would qualify but was making so much less than a private sector job it wasn't worth it.

 

[Sigmapolis]

Our loans are long gone but it seems like there would have been a simple formula to follow:

Majors X, Y, and Z qualify
Loans with Programs X, Y, and Z qualify

Introducing some actuarial-based pricing of student loans based on the major/program and/or school you attend is a little bit controversial, to say the least.

 

[mj4cy]

Paying anything you can over the minimum payment will exponentially reduce your loan amount/time.

We try to send a 13th house payment every year with the 13th check going all to the principal balance.

 

[alarson]

Paying anything you can over the minimum payment will exponentially reduce your loan amount/time.

We try to send a 13th house payment every year with the 13th check going all to the principal balance.

I've basically done the same thing for many years, by just having my bank send half a payment every 2 weeks.

 

[Clonefan32]

Paying anything you can over the minimum payment will exponentially reduce your loan amount/time.

We try to send a 13th house payment every year with the 13th check going all to the principal balance.

Sure, but this PSLF plan encouraged you to do the opposite. You just had to pay the absolute minimums consistently for 10 years and be in a qualifying job. So basically people have been paying interest only, if that, for 10 years only to find out their loans wont be discharged.

 

[ArgentCy]

Sure, but this PSLF plan encouraged you to do the opposite. You just had to pay the absolute minimums consistently for 10 years and be in a qualifying job. So basically people have been paying interest only, if that, for 10 years only to find out their loans wont be discharged.

Oops, did they learn a lesson to not get financial advice or trust the government?

 

[Clonefan32]

Oops, did they learn a lesson to not get financial advice or trust the government?

Oh I agree. Like I said before, I was on the program for about 2 years and realized there was no way I was staking my financial future in hoping they'd forgive them once I was done.

 

[mj4cy]

Sure, but this PSLF plan encouraged you to do the opposite. You just had to pay the absolute minimums consistently for 10 years and be in a qualifying job. So basically people have been paying interest only, if that, for 10 years only to find out their loans wont be discharged.

Wonder if that detracted people from taking advancements or better jobs elsewhere. Interesting to say the least.

 

[Rabbuk]

Wonder if that detracted people from taking advancements or better jobs elsewhere. Interesting to say the least.

I left after 7 years I might be the exception.

 

[isufbcurt]

If you want people to do public service jobs you need to incentivize them somehow. I took a job at the State of Iowa Auditors Office right out of college, what a compensation joke that was. Pay there wasn't even close to the private sector. Within 5 -7 years in private I was making more than management who had been at the State 20+ years. Heck now doing stuff on my own I make more and work way less than the highest people at the Auditor's Office.

 

[Sigmapolis]

If you want people to do public service jobs you need to incentivize them somehow. I took a job at the State of Iowa Auditors Office right out of college, what a compensation joke that was. Pay there wasn't even close to the private sector. Within 5 -7 years in private I was making more than management who had been at the State 20+ years. Heck now doing stuff on my own I make more and work way less than the highest people at the Auditor's Office.

The traditional answer to this problem is to pay people more.

If anything here, this is another instance of the federal government subsidizing the states and localities. States and localities want educated workers, and those educated workers are willing to take the pay cut because they know their is loan forgiveness in their future from the federal government. If they did not bank on that, they would either demand more or take their labor somewhere else. States and localities ultimately benefit...

...at the expense of federal taxpayers.

The other option would be to make do without workers that have college degrees, though, which is something like 70% of the labor force yet.

 

[Al_4_State]

I was hooked up with this program too and left the qualifying employment after a couple of years for the same suspicion.

I couldn't have stayed in that job for 10 years, but now I feel even better about it.

 

[Doc]

My ex was a public defender and hoping/planning to use it. It makes a lot of sense for public defenders because these are lawyers with valuable trial experience who are only making $60k or so a year. Strictly from a dollar standpoint it’s still not worth it, but it’s a nice encouragement for people who want to do public service rather than strictly follow the dollars.

 

[Agkistrodon]

I work for the Department of the Interior and have considered taking advantage of this program, but I'm single, will never have kids, and should have a high ceiling within the Service so I may be able to pay them off in <10 years and not have to worry about getting screwed by this program.

My first boss expected to have all of his loans forgiven after 10 years, but found out after 10 years of service that it's only certain repayment plans that qualify for the program. So his loans will not be forgiven until ~10 years from now.

I believe there's other hoops you must jump through as well that most people are not aware of - such as filing certain forms annually, and if you do certain things like consolidate your loans, then that can restart the 10 year clock.