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Teachers Union sues Department of Education over PSLF

Home Student Loan Management Teachers Union sues Department of Education over PSLF

  • Avatar Doc Spouse 
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    It SEEMED like a decent idea with that kind of program in place.  If you’re 18-22 years old and everyone around you is doing the same thing and you want to go into a career you enjoy and it just so happens that it requires a decent amount of student debt to accomplish it and you’re being told that there’s a way to pay it off with federal help…it’s hard to blame these people for getting into trouble if you look at it from that perspective.

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    As I mentioned in other posts – I don’t blame them for it, I just don’t have a ton of sympathy for people who put all their eggs in one basket, either.  Racking up that level of student loan debt, and then entering a low-mid paying career like that of a teacher and hoping the government forgives your large student loans via PSLF is understandable.  Expecting the government to forgive that debt, isn’t. As a responsible adult, you absolutely should have a backup plan if that magical PSLF wand doesn’t do its supposed job.  There are tons of people out there doing just that, making it work without PSLF.  It’s the ones that are now in dire financial straights because they relied solely on PSLF that make me shake my head in sad confusion.

    Our college system is broken in a lot of ways.  Tuition inflation is ridiculous, and there have been plenty of studies about the effect its having on employers as well.  I’m with you that the system needs to be fixed, but making college free for everyone isn’t the answer (and I know that’s not what you’re saying).  As a society, we need to stop lying and coddling our kids.  They need to understand that career choices have repercussions.  Taking on debt without a firm plan on how to pay it back yourself is risky.  Nothing in life is guaranteed, and that goes triple for magical government bailouts.

    What happened to this teacher, and your sister from the sounds of it, absolutely sucks.  One could argue that student loan companies (and colleges) are preying on students by overstating their chances of being qualified for PSLF, but that isn’t the DoE’s fault.  I have issues with suits like this because the teachers’ union knows that it’s not about the DoE, but the DoE is a heck of a lot easier target for them than private loan companies and colleges.  Makes for good news stories, too.

     

    #229603 Reply
    Avatar Doc Spouse 
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    The administrative screwups need to be fixed.
    If loans qualified and employment qualified and 120 payments are made, give the loan forgiveness.
    As a society, assistance is needed to help individuals get an easy and accurate picture. Leaving the burden and responsibility on the borrower for administrative screwups beyond their control is unacceptable.
    Loans, employment, payments. Each is simple. Accept proof and move on.

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    This is the crux of the issue for me.. I don’t understand what’s so hard about this.  I know it’s the government and all, but still…

    • Have job? – Check
    • Made payments? – Check

    Qualifications met.  Why does the type of loan even enter into it?  Don’t allow the loan services to package up 30 different kinds of loans with some qualifying and others not.  Make it simple.  One type of loan that qualifies for it.  You want PSLF?  This is the loan for you.

    #229604 Reply
    ENT Doc ENT Doc 
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    Or we could just do away with this absurd give-away.

    #229628 Reply
    Avatar redsand 
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    The administrative screwups need to be fixed.
    If loans qualified and employment qualified and 120 payments are made, give the loan forgiveness.
    As a society, assistance is needed to help individuals get an easy and accurate picture. Leaving the burden and responsibility on the borrower for administrative screwups beyond their control is unacceptable.
    Loans, employment, payments. Each is simple. Accept proof and move on.

    Click to expand…

    This is the crux of the issue for me.. I don’t understand what’s so hard about this.  I know it’s the government and all, but still…

    • Have job? – Check
    • Made payments? – Check

    Qualifications met.  Why does the type of loan even enter into it?  Don’t allow the loan services to package up 30 different kinds of loans with some qualifying and others not.  Make it simple.  One type of loan that qualifies for it.  You want PSLF?  This is the loan for you.

    Click to expand…

    Agree the program should have been a lot more straightforward. And I do not understand why it was not just that any federal student loan could qualify for PSLF (after 10 years of on-time payments while working full time for an organization that qualifies). But it just blows my mind that a person expects to be told. “For public service loan forgiveness, borrowers need to have a “direct federal loan.” But if their loan servicer never tells them that, they can remain in the wrong type of loan or plan for years, thinking they’re making progress toward loan forgiveness only to find out later that none of those payments counted towards forgiveness.” Information on the fact that they needed to be direct loans and that you could consolidate certain loans into a direct loan has been on the federal web site for years.

    I am sure that there are a variety of reasons for people not having the balances of their loans forgiven.

    #229637 Reply
    Liked by Doc Spouse
    Vagabond MD Vagabond MD 
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    This was probably discussed before, but there is apparently a conflict of interest between the loan servicers that incentivizes them to disqualify borrowers from PSLF.

    https://podcasts.apple.com/us/podcast/against-the-rules-with-michael-lewis/id1455379351?i=1000434501803

    I listened to another podcast a couple weeks ago which featured people whose paperwork was processed wrong or was delayed, through no fault of their own, trivial details that also disqualified them despite that all payments were on time. The system is broken is screwing lots of people who did their best to play by the rules, and it makes the government and its partners look incompetent at best and sinister at worst.

     

    #229641 Reply
    MPMD MPMD 
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    it makes the government and its partners look incompetent at best and sinister at worst.

     

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    The second one.

    #229645 Reply
    Vagabond MD Vagabond MD 
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    Or we could just do away with this absurd give-away.

    Click to expand…

    That is fine, too, but then do away with it by policy, not by leading people into it and then hanging them out to dry.

    #229650 Reply
    wonka31 wonka31 
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    I really don’t understand PSLF. It’s one thing if you go into the military and serve the country, Peace Corps, some underserved teaching situation, etc. I’m all for those people receiving debt free education, they clearly are making a sacrifice for the better of the country or the underserved. Forgiving the loans of a professional because s(he) happens to work at a non-profit institution (which is unbelievably broad in its scope) doesn’t make sense to me. You knowingly borrowed the money, so pay it off. The concept of the free lunch people want makes me sick, some of that is their fault and a lot is on the legislature for dangling this hard to reach carrot. If someone is taking advantage of the rules within legal limits, go for it, but this should not be a thing in my book.

    #229662 Reply
    Avatar BE87 
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    “But Menzel says that after 10 years of making payments, she was told by her loan servicer that she was in the wrong type of payment plan and couldn’t qualify.

    If a call center worker had told her that 10 years before, she easily could have switched into the right kind of loan. But she says nobody ever told her.”

    I’m sorry but this is just laziness. The rules for PSLF are easily found and can be read carefully in about 30 minutes. I remember being fresh out of medical school and doing my research to see if my loans qualified. Why do people not take the time to do this on their own is mind blowing to me. When you are dealing with large sums of money you should make absolutely sure that you know what you are doing. Relying on someone working minimum wage answering the phones at navient is not the person you want to be getting advice from.

    #229693 Reply
    Vagabond MD Vagabond MD 
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    ^^
    Yes, but if Navient, a stakeholder and beneficiary of the student loan business, is misleading people, either by ignorance or intent, they bear should some responsibility and so should the organization who contracts them.

    Ultimately, it sounds like the policy was poorly executed by the government and ended up harming people whom it was intended to help. And I am not referring to ortho spine surgeons who work at the U.

    #229729 Reply
    Avatar Tim 
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    @Vagabond MD,
    Poorly designed from the get go! This similar to almost every legislative program. The target was to provide financial resources for needed public service. Non-profit was a short-cut. State, local and non-profit! Benefit!
    What could go wrong?
    Not one requirement about the public service or the job or the benefits provided to the target “citizens” that would benefit. No limits, no pay scale, no skills. Doomed from outset to be abused. The target was not defined intentionally in order to get the votes.

    Income cap? Nope, repayment cap. The flip side is the Ortho-Spine at StateU probably gave up compensation greater than the loan over 10 years. The design failed to hit the target. That’s clearly not execution of a program.

    Poor design can’t be fixed with execution.

    #229766 Reply

Reply To: Teachers Union sues Department of Education over PSLF

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