By Dr. Jim Dahle, WCI Founder
Republicans in the House of Representatives, irate at President Biden's failure to control the border, passed a secret bill this week that will abolish Public Service Loan Forgiveness (PSLF) within 60 days. Amazingly, it also appears to be en route to passage in the Senate, because all three independents have chosen to vote with the Republicans on this issue. The administration has signaled that Biden, fearful of the fallout in the presidential election this fall, will sign the legislation as long as it only applies to households with more than $100,000 in household income.
Physician families all over the country are in tears at this news.
Reforming the student loan system has long been a priority of Republicans. The Republicans on the House Committee on Education and Labor have said, “Reckless loan forgiveness policies are a short-sighted answer that would crush American taxpayers and leave our higher education system more broken than before. They benefit the wealthy and worsen inflation.” They cited a Brookings Institute study that showed student loan forgiveness is regressive whether measured by income, wealth, or education. It's also supposedly racist. Here's a chart from that study:
Reddit, whose users skew younger, was particularly aflame, especially the WCI subreddit. User “BlueFlamingo687” says:
“I'm an MS4 who didn't come from a family with money. I had to borrow the entire cost of my medical school education. I already have over $400,000 in student loans and was counting on PSLF to pay for it. I didn't even sleep last night after I heard about this from a classmate.”
User “HotStuff8421” said:
“I can't believe they're not going to grandfather us all in. I'm PGY 4 of 7. I would have refinanced a long time ago if I had known PSLF could have gone away.”
User “DocGreen67” said:
“I've already got 96 payments. I can't believe they're pulling the rug out from under me. I took this job in rural BFE just to have a PSLF-qualifying job. I feel like I've wasted the last three years of my life.”
User “WileECoyote” said:
“I'm so glad I got in under the new rules for Kaiser docs in California a few months ago. I had $280,000 forgiven. I feel really bad for those who missed out.”
Other redditors didn't exhibit as much compassion. Comments ranged from “Good. I paid my loans back and you all should, too” to “Sorry suckas!” to “I don't see why physicians all think they should get a big fat government handout in addition to their $300,000 salaries.”
Over on Facebook, the responses were even more hysterical. One doctor singled out Marjorie Taylor Greene, one of the bill's sponsors, for blame. “I hate MGT. I think all doctors should boycott medical care for her and her family.” Another said, “Bait and switch! I wouldn't have gone to medical school if it wasn't for PSLF.” Jack Cousteau, a medical school graduate who will be trying to match for the third time this year, said, “I don't know what I'm going to do. My student loans are $520,000 and growing. If I don't match this year, I guess I'll just find a new career that pays less than $100,000 and hope to still qualify for the new watered-down version of PSLF.”
There was a lot less compassion on the WCI Forum. Commenter Scutchy McButchy said, “I knew it. The moral hazard from this terrible government policy is incredible. PSLF was just one more sign that our civilization is on the decline. Maybe now we truly can make America great again.” Moderators quickly shut the thread down as ad hominem attacks progressed toward death threats.
A poll of WCIers asked, “If you were going for PSLF, what will you do now that it's gone?”
- 22% said, “I'll refinance and pay them off”
- 27% said, “I'll look into state forgiveness programs”
- 18% said, “I'm just going to stay the course and hope it changes back after the election”
- 11% said, “IDR forgiveness”
- 22% said, “I don't know”
More information here:
Why (and How) We're Disinheriting Our Kids
How Shorting Ethereum Helped Us Make Payroll
What You Can Do to Help
Andrew Paulson, lead student loan consultant at StudentLoanAdvice.com, tells me that he had 263 consults booked last night alone and that he has over 1,000 unanswered emails in his inbox, mostly from people for whom he has previously recommended PSLF. He says he'll be working overtime for months to modify student loan plans. There are 37 WCI blog posts that will need to be updated with this new information.
We've also started a petition, collecting signatures. You can sign the petition here. We also recommend you send a message like this to your senator:
“Dear Senator ________
I am one of your constituents who was enrolled in the Public Service Loan Forgiveness program and in fact was counting on it to help me pay for my education. Employees of nonprofits rely on this program to enable them to do important work, like providing medical care to underserved communities. The passage of H.R. 5376 and its Senate equivalent (S. 2444) will have a chilling effect on doctors, nurses, and many other nonprofit employees that will have catastrophic effects on the medical system. Please vote against this bill and encourage your fellow senators to do the same”
You can find contact information for your senator here.
Is It Better This Way?
Here at WCI, we've never been completely convinced that PSLF is good policy, but, like the Backdoor Roth IRA process, we feel doctors should take advantage of every legal mechanism they have to retire debt and build wealth. We hope that this change will reduce or even reverse the current rate of tuition increases in our medical schools, and maybe in the long run, physicians will even be better off for the change. But it sure is going to hurt a lot of doctors in the short term.
What do you think? Were you counting on PSLF? Do you think this is good policy or bad policy? What's your heart rate after reading this post? What's today's date? How else are you celebrating April Fool's Day? Comment below!
Almost had me there
Kind of a dick move tbh
Another post in pretty poor taste given how drastically this impacts people’s lives.
April 1- PSLF canceled. April 2 – 100,000 physicians storm the capital building. April 3 – Big Pharma bails us all out.
[ad hominem attack deleted]
Definitely, not cool.
Total dick move and not funny
Completely agreed.
Yeah, dick move. Realistic enough possibility, would basically ruin some of our long term financial plans.
lol have been expecting a follow up email all morning to say GOTCHA. before people panicked all day and possible even started to refinance. poor form
Can’t refinance that fast, it takes a few days. And refinancing BEFORE the law even passed? Really? If someone did that based solely on this article I’d like to hear about it. But after a couple of days we did add “April Fools” to the title, just in case.
If anything – teaches a few points for those who freaked out.
1. Stay Calm — investing really is the LONG game.
2. Read the entire article — including the last line.
3. Stay Calm
4. Stay Calm
–If physicians can’t take a blog post joke on the biggest joking day of the year and fly off the handle, unable to recover….there’s more work to be done than reading a blog.
If you can’t tell that this article being published on April Fools is a joke then I worry how you made it through med school
I agree completely – how any educated person could believe this was real is beyond me. It read as straight out of The Onion (from 20+ years ago) or Babylon Bee. Then again, a lot of those stories have ended up coming true in our clown world. The “tell” beyond any doubt that it was fake was Congress agreeing to anything that wasn’t to promote wars, spend more, or take away our rights.
Come on Jim. This crossed the line. This issue has such drastic implications for families. Posts like this erode trust built over years of reading regardless of the date. We all love a good prank on April fools but make it about an index fund or something like that. Families may have actually made bad decisions in the last day over this post. You have grown out of touch.
Oh sheesh relax!
Totally agree
I’m sorry, but anyone that alters their financial plans based on one post from one guy without doing their own research has learned nothing from this site!
You definitely had me going with this Post. I was thinking “how did I miss this ‘pending legislation’ that was covertly passed by House Republicans?” But when I got about halfway through the article and it dawned on me what today’s date is, I realized that you had done it to me again!
A well written, humorous, and harmless spoof that first caused me to think seriously about the ramifications of discontinuing PSLF, before it subsequently brought a smile to my face when it dawned on me that “I’d been had.”
I enjoyed reading the creative yarn you meticulously spun. Undoubtedly, some others will take exception to what you wrote and won’t find it funny or will consider it to be in bad taste.
Hopefully, we can agree to disagree on the article without being disagreeable to one another.
He doesn’t even have the sense to actually say April fools at the end so it makes the whole post even less funny
Did you read the last few lines? It says it in there.
You mean like this?
What do you think? Were you counting on PSLF? Do you think this is good policy or bad policy? What’s your heart rate after reading this post? What’s today’s date? How else are you celebrating April Fool’s Day? Comment below!
So should I jump off this building or not?
Very well done
Jim you got me this year!!
I am so happy it’s April 1 and this is a joke. You really had me going there.
Could have at least said something along the lines of “this is a joke – Happy April Fool’s!” at the end of the story.
Did you read the last few lines?
I guess i missed that hint after reading the lengthy article in its entirety at 5am.
Maybe something like this as the last line (that apparently A LOT of people never got to):
What do you think? Were you counting on PSLF? Do you think this is good policy or bad policy? What’s your heart rate after reading this post? What’s today’s date? How else are you celebrating April Fool’s Day? Comment below!
Harsh is what I thought when I saw the title. Fortunately, having fallen prey to the “I bought a Tesla” post a few years ago, I now know when April 1 falls. And the advise to always read the fine print is brought home in the italicized text at end of the post. Fortunately, we have 365 days to forget before next year’s treat.
Already got something great planned.
Good one! Sadly, both our political parties are so inept and reactionary it almost seems plausible.
Happy April Fool’s Day
I read it. Believed it. Then I Googled the issue and saw no mention of it. In fact, it brought up a bunch of hits on the Biden Administration’s recent posts about expansion of the program to include more borrowers.
Got me again. I had a reply ready to go and was amped up because it’s such a hotly debated topic. Happy April Fool’s day to all, especially folks counting on PSLF.
LOL great post! I like how it’s a fully formulated article adding an air of legitimacy all the way until the very end.
And ignore the sourpusses who can’t take a joke.
I knew years ago when you bought a Tesla there was no way. I actually forwarded this and was paying a bill before I noticed the date 🤣
Comin in hot! People need some thicker skin. A good April Fool’s joke is supposed to be an emotional rollercoaster.
Having followed WCI for a long time, I had about 5 gut wrenching seconds before I realized the date and remembered Jim’s many past, excellent April 1 blog posts.
Lighten up people.
“Bait and switch! I wouldn’t have gone to medical school if it wasn’t for PSLF.”
You got rug pulled by the govt. Surprise surprise. I understand being frustrated that you lost the free meal being promised but wow. What an entitled narcissistic thing to say. So you made a life plan around stealing from other people and now you’re upset it’s not working out . It’s the equivalent of saying I moved to the United States because of the welfare.
I don’t care how you rationalize the government’s toxic inflationary policies, just pay back what you owe. Tax payer doesn’t owe you a dime and they never will.
Thank you Republicans for the reality check.
I’m not sure whether to make a serious reply to a serious comment about a not serious post, but I wouldn’t call it “stealing” when that’s the way the law is written and it’s actually in promissory notes. Hate the law and call your congressperson, but don’t blame the doc taking advantage of the program any more than those who do Backdoor Roths or other tax saving techniques.
Yea, you got me. I thought I deleted this before it got posted 🙂
However, I don’t agree. Despite the similar net effect, being excused from paying taxes on your backdoor is not the same as not paying back your loans. It’s your patriotic duty to pay as little tax as possible but the same philosophy does not apply to debt. We are not excused from morality and personal responsibility just by temporary majority enshrining a bill into law. I think we can all think of a few more immoral laws that have been on the books.
And no, I don’t hate the doc for taking advantage of such a morally hazardous law. My sister younger sister just started the program. But I do look down on any doc entitled enough to think that they deserve it.
You might have deleted it. I pulled it out of a trash folder. Maybe that’s where it goes when you delete it.
Wish it was true.
Yep, used to think it was a boon but have since realized that it’s merely a way for common tax payers (of which I contribute more than my fair share) to pay other peoples debts. Real problem here is that the value of education (stable quality over ballooning costs) has decreased greatly in the last couple of decades.
Agreed. Your debts, regardless of your cost color, aren’t my problem. Or shouldn’t be, at least.
I shoulda realized when the Republicans actually put an income limit on a money break for people, and Jack Cousteau did give me pause- but I fell hook line and sinker. Glad I have no PSLF issues- I’m old enough for a heart attack.
“A poll of WCIers asked, ‘If you were going for PSLF, what will you do now that it’s gone?'”
How could one of the options NOT have been “Generational/perpetual LLAR”? Lololololol
So many people can’t take an obvious joke
Good one Jim. I actually had my loans forgiven last year, but this one really got me worked up. Starting googling regarding this secret bill but could not find anything. Definitely got me. This post will make a lot of people anxious.
Very poor taste given the politically uncertain climate and the possibility that a republican presidency could mean the functional end to PSLF and financial ruin of physicians that came to medicine from nothing and are taking huge pay cuts to works in public service.
100% this ⬆️
AC,
Even if a republican is elected, eliminating PSLF would have to go through Congress. With a divided Congress, it’s going to be nearly impossible to get rid of PSLF entirely. One side is saying forgive all student loans and the other says you should pay back what you borrowed. Not much alignment at all. Even if there was enough traction to eliminate PSLF, they’d likely take a phasing out approach, so those already pursing it would be grandfathered in.
For now, PSLF is available and it’s a strategy that warrants every docs consideration. These are no longer the days where only a few thousand borrowers have received PSLF. There is nearly 1 million public servants who’ve had their loans forgiven by PSLF.
Andrew SLA
Agreed, they couldn’t get rid of it for those grandfathered in, but could easily change things to make it functionally unusable like it used to be prior to changes from Biden. Threats of taking back payment counts from the loan pause or increasing IDR payments so that borrowers can no longer afford their monthly payment are possibilities. Or no longer having strict oversight of Mohela could make it so that they start refusing valid applications like what used to happen.
How would they get rid of old payment counts from the pause? A lot of that was Covid related and part of limited waivers that have been extremely difficult to challenge. Republican lawmakers have tried and have not been able to gain traction even in some republican courts. I guess if they can get rid of the nonpayments during the pause they can also unforgive the 900,000 borrowers that have received PSLF in the last three years. Unlikely. Maybe there could be grounds this hurts borrowers who’ve now received forgiveness. You can see where this gets pretty messy in a hurry.
Maybe they do away with SAVE in the future, but IBR is a fine option and that one was not made as part of executive order. That’s written in law by congress.
Agree on oversight of MOHELA. But, MOHELA is doing a terrible job right now! If this persists borrowers will get passed to another servicer. Which has been a nightmare process for many.
Andrew SLA
Oh please! Republicans had entire government in 2016. They didn’t can PSLF then, they certainly won’t now. MAGA having trouble keeping a House Speaker for more than a month while in session.
Docs need to have a little more fortitude and ability to weather a joke. No cupcakes.
I disagree that a Republican presidency BY ITSELF could cause PSLF to go away. But if Congress passed it and the president signed it, it could certainly go away eventually. Part of the fun of this post was trying to come up with a semi-plausible way for something like this to actually pass. That wasn’t easy! I mean, look at everything that would have to happen:
#1 The house pass it
# 2 The senate pass it
# 3 The president sign it
# 4 Somehow the government can get out of its contract in the promissory note.
That is all so incredibly unlikely. Even if Congress and the president somehow passed a law to limit PSLF to only those with low incomes, current borrowers would almost surely be grandfathered in.
In other news, happy April 1st everyone;)
Best one yet! Jim you had me hook line & sinker!
It basically shows that don’t rely on anybody, especially the government (neither party cares about average Joe like you and me, there is no fundamental difference between a Walmart laborer making $15 an hour and a doctor squeezed by their employer making $300k a year, all capitalist slavery in various forms). Family income $100k is not that much but government rather screw those families up than take a cent from the billionaires. Do things like the first generation frugal immigrants, save tuition for their own kids, borrow from families with low interests, if not available, pay the shit as soon as possible, including delaying buying a house and living a “doctor” lifestyle. Who says a doctor’s family of four could not live in a 2-bedroom apartment and shop at Aldi/Walmart and drive secondhand Toyota and only take vacations at local parks and libraries for free? Those are the things you can be in control. It sucks that government doesn’t keep their words, yet that is the truth. The government and both parties only work for the super-rich and powerful (not those who work for an employer making even $500k, you are just another worker controlled by others), no matter what they say.
Got me good. Super funny.
Hey Jim you should read the Storm Skiing Journal post at
https://www.stormskiing.com/p/alta-snowbird-pledge-to-remove-all
Being an Utah guy you will like it.
I told my buddy about the fake PSFL cancellation this morning thinking it was real, and he was devastated for about half an hour. Someone else had to come do his CVC for him.
Great post.
That one was good. I saw another one about Alta allowing ski bikes but still no snowboards.