Public Service Loan Forgiveness

[Dr.Optimus]

Is anyone here familiar with the PSLF program?  Has anyone here taken advantage of it?  If so, what was your experience like?

[carloco]

You need to make 120 consecutive payments. When you add it up it is all of your borrowed money.  I don’t think it is worth it.  But it may make sense in your situation.

[Goinganon]

They do not need to be consecutive payments.

[remizidae]

You need to make 120 consecutive payments. When you add it up it is all of your borrowed money.

This is incorrect. You need to make 120 payments under one of the income-based repayment programs, but they do not need to be consecutive, and the payment amount is calculated based on the borrower's income. So there is no reason the payments should necessarily add up to the total amount borrowed.

As for whether it's a good idea, it's highly dependent on individual details. How much have you borrowed? How far into PSLF are you? How committed are you to staying in public service for ten years (or your number of years left)? How confident are you the program will stay without capping repayments? Can you spend a few years putting all or most extra money into the loans, or do you need/want the extra liquidity from paying only the minimum?

Personally, I have lots of loans, and I've chosen to refinance about half. Those will be paid off in 10 years or less, giving me a lower interest rate in case I leave public service or the program is capped.  I'm only paying the minimum on the other half, which will allow me to save some money under PSLF if I stay in public interest, and which will give me the liquidity I need to also max my 401k, Roth IRA, and do a little other investing while I'm paying back loans.

See also: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service/questions

[Dr.Optimus]

My current situation:
I owe 51k in loan debt.  My current payment, based on my AGI, is $161 per month.  I can probably lower this slightly since I just started maxing out my retirement, which lowers my AGI.  Let me know if my math is wrong here, but this is what I'm figuring

Assuming a 3% increase in payment per year, starting at 160 (this is an overestimate, I'm likely to get 2% raises per year).  At year 10, my payments should be around $208/mo.  I'm also assuming that max contributions to retirement continue to rise as they have in the past, about $500 every two-three years or so so I can continue to keep my AGI low.  So my payments, per month, per year, look something like this:

1.) 160
2.) 165
3.) 170
4.) 175
etc...
Bringing my total of 120 payments to about $22000.

I'm currently at 1 year or 12 payments into PSLF, I do plan to stay in this field and work for another 10-15 years.  I like my job, even after I reach FI I'll probably continue working, at a minimum of part time. 

[EarlyInJourney]

I'm about 6.5 years into the program, and assuming the status quo continues (Congress doesn't mess with it, I keep working in pub. serv), then I'll have a substantial amount forgiven - over 50K.  It's easy to mess up, though, and you have to really stay on top of things and document -everything-....They don't make it easy.  But yeah, for 50K I'm willing to jump through some hoops.

There's been a good series of articles in the NYT recently about some of the program's issues:

https://www.nytimes.com/2018/03/30/your-money/student-public-service-loan-forgiveness-program.html

https://www.nytimes.com/2018/04/06/your-money/public-servants-student-loans.html

https://www.nytimes.com/2018/04/13/your-money/public-servant-loan-forgiveness.html

[BlueDove]

Equal Justice Works has great information and offers webinars from time to time on PSLF.

http://www.equaljusticeworks.org/student-loan-forgiveness

They have an e-book that used to be on Amazon but I can't find it and the link on the site is broken, but if you poke around you can probably find it. 

[freezerburn]

I'm about 6.5 years into the program, and assuming the status quo continues (Congress doesn't mess with it, I keep working in pub. serv), then I'll have a substantial amount forgiven - over 50K.  It's easy to mess up, though, and you have to really stay on top of things and document -everything-....They don't make it easy.  But yeah, for 50K I'm willing to jump through some hoops.

There's been a good series of articles in the NYT recently about some of the program's issues:

https://www.nytimes.com/2018/03/30/your-money/student-public-service-loan-forgiveness-program.html

https://www.nytimes.com/2018/04/06/your-money/public-servants-student-loans.html

https://www.nytimes.com/2018/04/13/your-money/public-servant-loan-forgiveness.html

PTF. This is pretty much my situation--I'm also about 6.5 years in and would get a substantial amount forgiven. Thanks for these article links--scary reading!

This is also a timely reminder to get my current employer certified and also make sure all my payments while at previous employers have been counted towards the 120, something I've been putting off since I changed jobs a while back. (I used to get them re-certified every year.) That last article makes me nervous about doing so in case they revoke prior approvals... though my jobs weren't in the same category as the article subjects.

[NoStacheOhio]

Is anyone here familiar with the PSLF program?  Has anyone here taken advantage of it?  If so, what was your experience like?

Republicans are trying to kill the program off right now with the latest Higher Education Act. Don't make any plans that assume that it will be there in ten years in the current form.

It's written into the Promissory Note/Contract. They're going to have a hard time retroactively killing it.

[hoodedfalcon]

I plan to take advantage of PSLF. I have 34 payments left to go on 90K worth of debt. I max out my 401K to reduce AGI, my payment is about $300/month. I have already paid off 70K in private loans (law school blah blah don't do it).

Most of the proposals to kill PSLF would not impact folks currently enrolled.

[Dr.Optimus]

The reading I've done also states that people who are not new borrowers would be grandfathered in to the PSLF program.  I initially felt it would be kind of a gamble to keep making such small payments, but now I feel like it is probably the best route to go.  It will be nice to have that much debt essentially erased overnight.

[NoStacheOhio]

The reading I've done also states that people who are not new borrowers would be grandfathered in to the PSLF program.  I initially felt it would be kind of a gamble to keep making such small payments, but now I feel like it is probably the best route to go.  It will be nice to have that much debt essentially erased overnight.

Important to note that you MUST make the exact payment specified in your IBR, otherwise it won't count for PSLF.

[Dr.Optimus]

The reading I've done also states that people who are not new borrowers would be grandfathered in to the PSLF program.  I initially felt it would be kind of a gamble to keep making such small payments, but now I feel like it is probably the best route to go.  It will be nice to have that much debt essentially erased overnight.

Important to note that you MUST make the exact payment specified in your IBR, otherwise it won't count for PSLF.

That's good to know.  I just submitted paperwork to FedLoan servicing, once I get the update from them I plan to automate the payment/withdrawal, hopefully that makes things more simplified for me and I don't do anything stupid. 

[I-Ranger]

The reading I've done also states that people who are not new borrowers would be grandfathered in to the PSLF program.  I initially felt it would be kind of a gamble to keep making such small payments, but now I feel like it is probably the best route to go.  It will be nice to have that much debt essentially erased overnight.

I just started PSLF about 3 months ago. I have 260k in school debt, so PSLF is a no-brainer for me, especially considering that I also got into a state rural loan forgiveness program that gives me 20k/year for 4 years. Essentially, this means I'll pay nothing out of pocket for the first 4 years, then only have to pay ~$800/month for 6 years and then be school loan free!

Thinking that PSLF could go away scares the crap out of me, but I have to believe that those already in it would be grandfathered and allowed to finish.

Because of the horror stories of people finding out they were ineligible after paying for 10 years, I have started to keep meticulous records and will be calling my loan servicer often to make sure I'm on track.

[NoStacheOhio]

The reading I've done also states that people who are not new borrowers would be grandfathered in to the PSLF program.  I initially felt it would be kind of a gamble to keep making such small payments, but now I feel like it is probably the best route to go.  It will be nice to have that much debt essentially erased overnight.

I just started PSLF about 3 months ago. I have 260k in school debt, so PSLF is a no-brainer for me, especially considering that I also got into a state rural loan forgiveness program that gives me 20k/year for 4 years. Essentially, this means I'll pay nothing out of pocket for the first 4 years, then only have to pay ~$800/month for 6 years and then be school loan free!

Thinking that PSLF could go away scares the crap out of me, but I have to believe that those already in it would be grandfathered and allowed to finish.

Because of the horror stories of people finding out they were ineligible after paying for 10 years, I have started to keep meticulous records and will be calling my loan servicer often to make sure I'm on track.

Just fill out the PSLF employment certification. If you aren't with FedLoan, they'll transfer your loans.