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"interesting" idea if you feel you can't save enough for college

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  • Avatar Tim 
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    •“At least theoretical”
    •Using non-profit healthcare entity (tax status) does not equate to “public service” or “underserved”.
    •Ready, shoot, aim!

    Yes, a lot of the “supply” ends up wanting to work in the metro suburbs with affordable new subdivisions, amenities, good schools and short commutes. Would a non-profit ever dream of paying “new cheap labor” less ?
    Geez

    #235781 Reply
    ENT Doc ENT Doc 
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    So isn’t a backdoor Roth unethical for high earners? I mean do you really need to utilize that tax free growth now, couldn’t you pay some taxes to the government on it?

    Idk if you play the loopholes are unethical game then where does it end? If pslf is unethical then I would think backdoor Roth is. It’s the same thing, program was never meant for you and via a loophole can utilize.

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    It is unethical to the degree that the intent of the 2011? legislation that allowed for it wasn’t to let people find this loophole.  To the extent that Congress created a known loophole to help people out then it’s less unethical.  And if this was not the intent, then I’ll be the first to admit that I am committing an unethical act by doing a Backdoor Roth x2 ever year.  But at least I’m honest about it.  We can all do the mental gymnastics to justify unethical behavior (we pay the vast majority of the country’s income tax revenues, we pay more for college than other people who get the same product), but it doesn’t make the act less unethical.

    #235810 Reply
    Liked by Lordosis
    Lordosis Lordosis 
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    I am committing an unethical act by doing a Backdoor Roth x2 ever year.

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    Don’t take the blame for your spouse as well 😉

    “Never let your sense of morals prevent you from doing what is right.”

    #235827 Reply
    Liked by ENT Doc
    MPMD MPMD 
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    Do you really think it was the intent of Congress and Bush to start a program whereby a doctor could discharge hundreds of thousands of debt into the public simply by working at any non-profit hospital (which is most of them)?

     

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    PSLF is ethical when it is used as it was originally intended – for poor earning social workers and teachers to get an education and working in the public sector and for physicians in rural areas, Indian reservations and other physician shortage areas to do public service. Not to work in any 501c hospital or health facility and call it ethical.

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    Based on what are either of you assuming that Congress had this intent when they created PSLF?

    I would argue that by continued inaction on this issue both Congress and the Dept of Ed have made their intent much more clear than they did when they failed to specifically excluded physicians from this law.

    Again this is low-hanging fruit that could have easily passed during the period of unified gov’t control, a simple means test to prevent high earners from wasting federal dollars could have been introduced, passed, and signed in about 3 days.

    It’s very inconsistent to say the bdRIRA was ethical prior to TCJA but that PSLF was not. The arguments for an against them are the exact same. You are taking advantage of a program that isn’t specifically closed to you but that you assume was intended for someone other than you. Getting money from the gov’t directly and avoiding taxes has the same net effect on your bank account even if one feels more legit to you. Remember that there are plenty of people who think 529s are scams used by the rich to avoid taxes as well.

    #235835 Reply
    Avatar Tim 
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    Getting money from the gov’t directly and avoiding taxes has the same net effect on your bank account even if one feels more legit to you. Remember that there are plenty of people who think 529s are scams used by the rich to avoid taxes as well.

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    One can say the same for ANY deduction that reduces a tax liability. Tax policy is sometimes used with the intent of “encouraging fiscal behavior”. That is not tax avoidance.

    Loan forgiveness or grants are expenditures of the government, also intended to “encourage fiscal behavior”. PSLF is not taxation policy related to revenues. Purely an expenditure. It is really a stretch to think the intent was HCI individuals to be funded working in a non-profit in major urban institutions. However, that is how the law was written. It’s legal, but at some point the question is whether it is right or wrong. They failed to put in a compensation limit. I would bet it was floated by some and deemed to controversial.

     

    #235843 Reply
    MPMD MPMD 
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    The standard for comparison should be those who signed up for the military, gave years of their life to the defense of our nation, likely spending months if not years deployed away from family at a level of risk to life that far surpasses that of the comparatively posh experience doctors have at their 501c3 hospitals, with higher pay, knowing they’ll be able to see their family every week, and with no sacrifice to life or for country. As that as the historical (and ethical) standard, yes PSLF pursuers are knowingly abusing a system that they were never intended to be a part of and are acting unethically.

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    The genius of the people who actually make these decisions is convincing us that the deployed soldier and the debt-ridden young doctor are on opposite teams.

    That work has been done well and completed effectively at this point.

    #235846 Reply
    Liked by Uncle Scrooge
    Craigy Craigy 
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    For what it’s worth…

    If you believe the strategy reported in the stories, these people aren’t “falsely” disowning their kids or “pretending” to give up guardianship, they’re actually going to court and getting a judicial declaration transferring guardianship or emancipating their children.

    Lying about your income on the fafsa would be more fraudulent.  That would actually be a lie.

    This is real and has legal consequence.

    Whether they actually stop supporting their kids is another story.  I don’t think most states mind if children’s biological parents continue to financially support them.  In fact, they encourage it.

     

    LEVEL 1 WCI FORUM MEMBER.

    #235847 Reply
    ENT Doc ENT Doc 
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    The standard for comparison should be those who signed up for the military, gave years of their life to the defense of our nation, likely spending months if not years deployed away from family at a level of risk to life that far surpasses that of the comparatively posh experience doctors have at their 501c3 hospitals, with higher pay, knowing they’ll be able to see their family every week, and with no sacrifice to life or for country. As that as the historical (and ethical) standard, yes PSLF pursuers are knowingly abusing a system that they were never intended to be a part of and are acting unethically.

    Click to expand…

    The genius of the people who actually make these decisions is convincing us that the deployed soldier and the debt-ridden young doctor are on opposite teams.

    That work has been done well and completed effectively at this point.

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    Not sure I follow.

    #235860 Reply
    Avatar AR 
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    It seems like it would be pretty easy for colleges to figure this out or easily adjust their policies to thwart it.  My guess is that this technique will not exist for much longer. 

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    I would hope so but what incentive does the colleges have to investigate.  As long as they fill their spots and get paid they are happy, no?

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    Well, what incentive does the college have to give need-based aid in the first place?

    Also “investigate”is a little more than what I had in mind.   Just add a few more questions:

    1. Have you been emancipated or had a change in custody in the last 5 yrs?

    2. If yes to above, then ask for documentation of biological parents assets and support after change in custody?

    Attach some stiff penalties for lying about the above, and that should reveal most of the ones you want to exclude.

    #235903 Reply
    Lordosis Lordosis 
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    Good suggestions.
    I think most of the aid comes from governmental programs. But some comes from the college. The motivation from the college is likely to enhance diversity.

    “Never let your sense of morals prevent you from doing what is right.”

    #235905 Reply
    ENT Doc ENT Doc 
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    Good suggestions.
    I think most of the aid comes from governmental programs. But some comes from the college. The motivation from the college is likely to enhance diversity.

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    Aid comes from many sources, but aid is defined as loans that many of us take under Federal Student Aid.  So if you’re talking about things like Pell grants and school aid, I would venture to guess that the majority comes from collective school aid as opposed to Pell Grants.

    I hope the following will be instructive as to the incentives that our institutions of higher learning are operating under.  I’ll cast aside the obvious liberal bias among college campuses and administrators to try to enhance diversity for a moment (though undoubtedly this plays a role in what they do).  Look to the US News and World Report ranking methodology:

    https://www.usnews.com/education/best-colleges/articles/how-us-news-calculated-the-rankings

    5% – graduation rates of Pell Grant students – this, along with the 30% attributed to graduation/retention in some capacity inspires grade inflation, something that the Economist has reported on a few times among the Ivy league schools in particular

    10% – per student spending – incentivizes growth of even the most marginally absurd majors, more buildings, nicer facades and things that don’t necessarily provide value

    8% – class size – combined with above it makes colleges more likely to keep even the most poorly attended and marginal classes going to offset the 200 kids in basic chem, and to pass them easily so the course will get a good rep

    7% – faculty salary – incentives more and more spending regardless of the value of the major

    1% – student:faculty ratio – just wanted to highlight this.  Good to see that faculty salary is 7x more important.  Jerks.

     

    And now to the real juicy stuff, the US News & World Report Best Value Schools methodology:

    https://www.usnews.com/education/best-colleges/articles/best-value-schools-methodology

    60% – ratio of quality to price – they take the ranking in the first ranking (as a judge of quality…cough, cough…laugh) and divide it by the net cost that a student pays who is receiving need-based aid – this incentivizes them to not necessarily take more students requiring aid, but when they do admit someone to create a steep drop off in net cost so that those already qualifying for need based aid from the Feds are targeted for a more massive age package.  This is why you see the cynical BS out of the Ivy schools regarding those under $X will attend “for free”.  It virtue signals and helps them in the rankings.

    25% – % of all undergrads receiving any need based scholarships or grants – incentivizes colleges to give out at least some aid, even if $100, to more undergrads.  Guess who has to foot the bill for the costs to run the place (when they are pushed to spend more in the overall rankings)…ding, ding….the smaller pool of kids from wealthy families.

    15% – average discount from sticker price for those receiving need-based aid – this again inspires steep drop offs so that anyone getting aid from the Feds signals to the school to target that person for a full discount.

     

    So I hope you see that this is all built on a corrupt system of incentives, fueled by the idiots at the US News and World Report who deserve the focus of our ire as well.

    #235911 Reply
    Lordosis Lordosis 
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    What a messed up system.

    “Never let your sense of morals prevent you from doing what is right.”

    #235915 Reply
    Liked by Craigy, ENT Doc
    MPMD MPMD 
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    Splash Refinancing Bonus

    The standard for comparison should be those who signed up for the military, gave years of their life to the defense of our nation, likely spending months if not years deployed away from family at a level of risk to life that far surpasses that of the comparatively posh experience doctors have at their 501c3 hospitals, with higher pay, knowing they’ll be able to see their family every week, and with no sacrifice to life or for country. As that as the historical (and ethical) standard, yes PSLF pursuers are knowingly abusing a system that they were never intended to be a part of and are acting unethically.

    Click to expand…

    The genius of the people who actually make these decisions is convincing us that the deployed soldier and the debt-ridden young doctor are on opposite teams.

    That work has been done well and completed effectively at this point.

    Click to expand…

    Not sure I follow.

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    Eh, I think it’s pretty clear and not worth getting into the weeds about.

    #235921 Reply
    Avatar Tim 
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    I love the reference to US News and World Report’s methodology.
    https://www.usnews.com/education/best-graduate-schools/articles/medical-schools-methodology.
    https://media.beam.usnews.com/8c/7b/6e1535d141bb9329e23413577d99/190709-bh-methodology-report-2019.pdf
    I guess universities, medical schools, and residences, and hospitals all need a whole lot of administrators to study The rules bird dog “new initiatives” to boost ratings.

    Those ratings are certainly good publicity although I am not too sure they are precise quality measure of education and care.

    #235940 Reply
    Liked by Uncle Scrooge
    Avatar StarTrekDoc 
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    US News has always been more a.beauty and popularity contest with top 25 coaches poll like ratings taking the large portion or the rankings.

    Mich like the Top Doc survey that our institution pushes docs to fill out for trumpet our own for the masses…..wonder which is more accurate….Yelp or top doc.

    #235941 Reply

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