Trump's Education Budget

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SigmaFS

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Post this on Dentaltown, but thought to post it here as well...

Per the Washington Post, the Trump administration is expected to release their education budget on May 23rd. Of interest to graduate students:

1. Rolling the 5 current income driven repayment options (IBR, PAYE, REPAYE, New IBR, & ICR) into 1 program.
-Proposed new IDR for graduate students is 12.5% of discretionary income with a 30 year repayment term.

2. Public Service Loan Forgiveness (PSLF) - elimination of this program.

It's my expectation these proposals, if approved, will be effective for those 1st time federal loan borrowers on or after July 1, 2017. Current borrowers will be grandfathered under the current terms.

Let's see how this moves forward.

Here's the article: https://www.washingtonpost.com/local/education/trumps-first-full-education-budget-deep-cuts-to-public-school-programs-in-pursuit-of-school-choice/2017/05/17/2a25a2cc-3a41-11e7-8854-21f359183e8c_story.html?utm_term=.8f52ed38e782

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I think the real question is exactly how PSLF will be eliminated. Wholly? In part? Grandfathering? etc...

I was going to waive grave period and get things started but now I'm not sure I'll be doing that! Guess we'll find out in a week.
 
And will congress even fund the current PSLF program?

Keeping the program but eliminating the funding for it is a time honored tradition in congress.

PSLF: we will will forgive your loans... if / when we get some money someday
 
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Keep in mind this is just Trump's budget. Obama proposed limiting PSLF in his budget and that didn't happen. It will take Congress to change PSLF.

With that said, I'm very confident Congress will change PSLF. I'm sure at minimum they'll cap it to ~$50k or so, if they don't scrap the program outright. The big question is if they "grandfather" the people (including me) who have already made eligible payments and had them logged, in the program.

I am doubtful of even that. A Republic-controlled congress isn't going to be borrower-friendly when it comes to student loans. And it honestly doesn't make sense to forgive the debt of people who are making triple figure salaries. I'm sure we and other's our age will protest and throw a fit, but it'll be chalked up to "entitled millennial crybabies asking for hand-outs." I'm not sure how that differs from corporations asking for handouts with tax cuts or the elderly/baby-boomers with refusing to push back social security eligibility age, but apparently it does. The younger generation is always perceived as wanting hand-outs.

Ultimately most people vote for what's best for themselves--PSLF sure would be what's best for me. I owe a ton (more than almost any other resident I've met) and am in a low-paying specialty, and I'd like to work for the VA. But as much as PSLF would be great for me, it's a pretty terrible fiscal policy. It just encouraged colleges to keep raising the COA.

As time goes on student loan debt will hopefully be recognized as the problem it is. And unfortunately while PSLF would greatly help many of us, it ultimately ends up hurting future borrowers (especially law students) as colleges increase tuition. We need to attack the source of the problem.

I'd love it if all student loan interest would be tax deductible and if they'd just get rid of the max $2500 deduction and income limit. Or just take out the money pre-tax from my paycheck like social security. That would encourage people to pay it off quicker. If I make $200k, you could sure bet I'll have $100k taken out of my paycheck until it's paid off.
 
I am currently making my repaye payments as scheduled in IM residency. Do you think I should get the documentation from HR and submit it to the govt for them to be logged. I was going to wait till end of residency and just log my 3 yrs all at once.
 
I am currently making my repaye payments as scheduled in IM residency. Do you think I should get the documentation from HR and submit it to the govt for them to be logged. I was going to wait till end of residency and just log my 3 yrs all at once.

I would do it ASAP, on the off-chance that only people who logged payments are grandfathered into the program.

It may sound arbitrary, but you never know what cutoff they would use if they grandfather people in. Maybe they go with:
1) Only new borrowers not eligible
2) Only people who haven't logged any payments aren't eligible
3) Only people who haven't logged over 5 years of payments aren't elibible

Or maybe just no one is eligible...

Either way, you have nothing to loose by submitting the documentation now. I submitted mine every year.
 
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Post this on Dentaltown, but thought to post it here as well...

Per the Washington Post, the Trump administration is expected to release their education budget on May 23rd. Of interest to graduate students:

1. Rolling the 5 current income driven repayment options (IBR, PAYE, REPAYE, New IBR, & ICR) into 1 program.
-Proposed new IDR for graduate students is 12.5% of discretionary income with a 30 year repayment term.

2. Public Service Loan Forgiveness (PSLF) - elimination of this program.

It's my expectation these proposals, if approved, will be effective for those 1st time federal loan borrowers on or after July 1, 2017. Current borrowers will be grandfathered under the current terms.

Let's see how this moves forward.

Here's the article: https://www.washingtonpost.com/local/education/trumps-first-full-education-budget-deep-cuts-to-public-school-programs-in-pursuit-of-school-choice/2017/05/17/2a25a2cc-3a41-11e7-8854-21f359183e8c_story.html?utm_term=.8f52ed38e782

The 1st proposal is a shiet show. It's a worse plan for students in general. It's like Trump just wanting to get rid of anything Obama and put his stamp on something. It likely won't get approved by Congress. I personally don't expect IBR, PAYE, REPAYE, IBR, and ICR to change until after 2020.

As for PSLF, I expect Congress to take action on this soon. Personally, I think it will likely get capped.
 
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I would do it ASAP, on the off-chance that only people who logged payments are grandfathered into the program.

It may sound arbitrary, but you never know what cutoff they would use if they grandfather people in. Maybe they go with:
1) Only new borrowers not eligible
2) Only people who haven't logged any payments aren't eligible
3) Only people who haven't logged over 5 years of payments aren't elibible

Or maybe just no one is eligible...

Either way, you have nothing to loose by submitting the documentation now. I submitted mine every year.

Thanks. I will get on it!!
 
?...As time goes on student loan debt will hopefully be recognized as the problem it is. And unfortunately while PSLF would greatly help many of us, it ultimately ends up hurting future borrowers (especially law students) as colleges increase tuition. We need to attack the source of the problem....

What is the reason for law students especially being hurt?




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Universities have been getting away with jacking up rates of tuition above the rate of inflation now for decades, and all of this has been enabled by the availability of federal student loans. They are completely desensitized to the plights of their graduates and get their money up front, anyway, so why should they? That needs to stop, and academia need to have skin in the game. It's become a competition to build the prettiest student dorms with the most lavish athletic facilities, which graduates are being skinned alive for upon graduation. Make the universities responsible for those loans and collecting upon them.

These giveaway programs need to stop, as they simply encourage moral hazard.
 
What is the reason for law students especially being hurt?




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They borrow a ton of money to pay for law school and have much worse job prospects--both in terms of actually getting a job that uses their degree, as well as getting one that pays well if they do find one. Law schools in particular also seem to push the PSLF thing, which helps them justifying increasing tuition.
 
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Universities have been getting away with jacking up rates of tuition above the rate of inflation now for decades, and all of this has been enabled by the availability of federal student loans. They are completely desensitized to the plights of their graduates and get their money up front, anyway, so why should they? That needs to stop, and academia need to have skin in the game. It's become a competition to build the prettiest student dorms with the most lavish athletic facilities, which graduates are being skinned alive for upon graduation. Make the universities responsible for those loans and collecting upon them.

These giveaway programs need to stop, as they simply encourage moral hazard.


The student loan program has been going well and good since the 60s. Its amazing that now its a handout program causing universities to cash in. Or was it a combination of more people entering school during #greatrecession and states like Florida taking away funding due to the housing crisis and subsequent loss of tax revenue? Interestingly, state funding has not come back as housing as recovered. Imagine that.
 
The student loan program has been going well and good since the 60s. Its amazing that now its a handout program causing universities to cash in. Or was it a combination of more people entering school during #greatrecession and states like Florida taking away funding due to the housing crisis and subsequent loss of tax revenue? Interestingly, state funding has not come back as housing as recovered. Imagine that.

I wouldn't say it has been going "good." It was in the early 80s that college tuition really began to separate from the cost of living increases. Then in the early 1990s, unsubsidized loans and higher borrowing limits took effect, and predictably, college tuition sky-rocketed.
 
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