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You can't be "grandfathered" into PSLF. Here's why.

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You can't be "grandfathered" into PSLF. Here's why.

Public Service Loan Forgiveness.

 

As you plan your finances and your education/career, you need to know that you are NOT "grandfathered" into PSLF, no matter how many qualifying payments you've made. Here's why:

 

You apply for PSLF AFTER you have made ALL of your qualifying payments via an eligible, income-based repayment program. Unfortunately, this means that if it isn't there to apply for once you make that last payment, you can't apply for it. The income-based repayment plans and PSLF are completely and totally separate programs. All you do every year when you "re-certify" is get a piece of paper that says that your payments will be eligible IF PSLF still exists for you to apply for when you're done.  (If PSLF were automatic, you wouldn't have to apply for it at the end of your payments ... see what I'm saying?)

 






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Established Contributor

Re: You can't be "grandfathered" into PSLF. Here's why.

Why don’t you just budget to pay it back? You know it was a “loan” when you took it out right?
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Re: You can't be "grandfathered" into PSLF. Here's why.


@ttulaw wrote:
Why don’t you just budget to pay it back? You know it was a “loan” when you took it out right?

That's a completely different conversation.  






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Established Contributor

Re: You can't be "grandfathered" into PSLF. Here's why.

OP—Sound like the same conversation. You (or anyone else who took out student loans like me as well) take out a student loan, you know it must be repaid, and at the time you take it out you are not guaranteed any special repayment or forgiveness program. It is a debt you asked for and now you must pay it back.

Higher education is not an entitlement, loans are not a right, repayment is an obligation.
Back In the garden June 2019 until TBD
FICO 8 Scores (Inquiries) May 29, 2019

Military Star - $8.7K | FCCU Platinum Signature VISA - $13K | Care Credit - $25K | Barclay AA Red MC - $5K | Best Buy Citi Visa - $3K | Cap1 Savor - $3.1K | USAA Signature VISA - $6K | PFCU Power Cash Rewards Signature VISA - $28.5K | CSR $15K | USAA AMEX - $12K | AMEX BCP - $35K | Chase Freedom Signature Visa- $7.5K | HSBC Rewards MC - $1.75K | CITI DC - $10.3K | Discover It - $16K | NFCU Cash Rewards Signature Visa - $10K | NFCU CLOC - $15K | TD Ameritrade Client Rewards Visa - $1.5K | Chase FU Signature $15K | Citi AA Plat MC $13K
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Currently 13/24
4/24 on 1/14/20
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BMW $36.4K of $65.3K @ .99% (44.3% Paid)
Student Loans $32K of $66.65K @ 2.75% (51.93% Paid)
Annual Income ~ $110K
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Community Leader
Valued Contributor

Re: You can't be "grandfathered" into PSLF. Here's why.

Back on topic, Kreditwuerdig that's an excellent point. You aren't actually applying for PSLF until you've made the 120 qualifying payments.
There's an even bigger argument to be made that when a bill becomes a law, that law could simply no longer allow any forgiveness plan, or on an even broader perspective, any repayment plan at all.
In the other hand, a different legal argument head been made that these plans are guaranteed to federal loan borrowers because it's in documents such as the rights and responsibilities that we signed in the legally binding contract we made with the governments. If you read the fine print, the availability of such plans was part of the agreement.
They have been floating arrive a lot of new place such as DT's promise to reduce student loan repayment to one, simpler Income-based repayment for a low percentage of wagesthat would end in forgiveness sooner that the current IDR plans. Another was brought up by a senator; have payments be taken directly out of paychecks, no other options. Reduce the number of repayment plans and simplify them.
Overall, I think the plan that will win both houses of approval is to put a cap on the amount forgiven, eliminate the PSLF, and grandfather in all students who have already gotten aid to all plans that were offered to them at the time they got the aid. No takesies backsies essentially.



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Valued Contributor

Re: You can't be "grandfathered" into PSLF. Here's why.

According To Forbes, one can be grandfathered in and it has been part of previous bill proposals.  The new law would affect new loans.

 

Since we are on the subject, there a big darn difference between being a teacher or public defender than being a consultant or tax attorney.  Public service is hard, pays like crap, and is often thankless.

 

Even public universities can easily cost $100k for a BA and MA.  Teachers generally make less than $50k.  Do the math!

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Re: You can't be "grandfathered" into PSLF. Here's why.


@Shooting-For-800 wrote:

According To Forbes, one can be grandfathered in and it has been part of previous bill proposals.  The new law would affect new loans.

 

Since we are on the subject, there a big darn difference between being a teacher or public defender than being a consultant or tax attorney.  Public service is hard, pays like crap, and is often thankless.

 

Even public universities can easily cost $100k for a BA and MA.  Teachers generally make less than $50k.  Do the math!


Yep.  I'm a teacher and union official, with a PhD from a brick-and-mortar research university.  I'm well aware of the math.  Smiley Sad  






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Message 7 of 8
Community Leader
Valued Contributor

Re: You can't be "grandfathered" into PSLF. Here's why.

Like I said, it is both true that you can be grandfathered in and you can't be grandfathered in. All of this is in theory. There is no legal precedent. Legal schools have been arguing over this topic and it basically boils down to we'll see when they actually do whatever they do.
They're likely to grandfather it in because it will trigger a need for compromise. Specifically, since the forgiveness program is strongly Democratic supported but benefits all the constituents, it allows Republicans (or Democrats, if they anticipate what it will take to pass) to implement restrictions such as the caps, a longer period until forgiveness, or to do away with the PSLF program altogether in favor of the general forgiveness program. Keep in mind PSLF may be well-known but there is still the IDR forgiveness and former Perkins Loan that provided loan forgiveness after only 5 years for teachers, or 70% forgiveness in only 4 years, with not interest accrued!
In terms of what grandfathering in would actually mean, there is also no solid definition. It could mean people who "applied" through their servicer, people who applied to gov after 10 years, people in repayment or people who have accepted aid. It will all be up to the lawmakers and could be followed by clarification through courts with possible lawsuits.
Personally, I think PSLF needs to go. If we end it and grandfather some people in, we can move on. This idea that teachers, government workers or any career choice (usually white collar) should be valued above others is hurting college educated lower class people. Not to mention the PSLF was so complicated that only 206 out of 46,000+ applications was approved. By going with general forgiveness programs, based on income, it will benefit those who need it most.



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