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.”
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?
Yep you got me, lose track of the days when I’m on! I didn’t realize until I got to the comments hahahah. Good one
Love this so much!
Got me going there a bit Jim. I bet the people at the MOHELA call center are pissed. Hahahaha
Probably. I know at least one of our sponsors got a few calls about it.
Your “joke” could lead to some very unintended, unfortunate consequences by people who are relying on PSLF to save them from the absurdity of the cost of college tuition/medical school.
This is not a good look WCI.
I hope not. I am a little surprised at how many people read the whole thing and still didn’t clue in though. Maybe thinking gets slower as the heart rate climbs. It’s hard to get it just right so everyone believes it at the end of the first paragraph but nobody believes it after the last. And then of course there is the fact that most people don’t actually read blog posts, they skim them. Which probably explains most of the people who were “had.”
Love it. As a long time reader I knew as soon as I saw the headline, it got my husband though and he forwarded the article to me. I don’t think there’s anything in poor taste about this. Good grief.
Agreed. Funny and timely.
Remember folks – no blog is giving personalized financial advice 😉
Screw this guy. Not a funny joke that would impact us so drastically. Done with WCI
Sorry to hear that. Hopefully there’s something on the site worth coming back for even if you didn’t like an April Fools post on it. Take what you find useful, leave the rest.
Web pages known for their sources of information can’t do April fool’s jokes unless they are over the top ludicrous. People plan their lives around this stuff. While it may be funny to those who are not basing their life decisions around the PSLF opportunity, or those who aren’t only months away from forgiveness under the program, it doesn’t hit home like you intended to those who do. I am (was) a new reader and will think twice about trusting the information you provide.
PSLF is a TEN YEAR journey.
If one is freaking out on a single blog post and acting upon it — there’s something more there.
WCI is a great blog and forum. It certainly shouldn’t be held as Gospel — especially something as big as PSLF action on one post. One April’s Fool day. with a clear end line of being a joke.
WCI is a rag
I actually hope you do think twice about everything you read here or anywhere else. That’s an important aspect of financial literacy.
This isn’t funny. I’m 3 years away from forgiveness. This would have a devastating impact on my family and me.
Take comfort in the fact that something like this occurring is so unlikely that it can be safely joked about.
The 7th annual sense-of-humor Hunger Games has begun. The Reaping is clearly more intense for some than for others.
May the jokes be ever in your favor.
I was excited to read this till I found out about the date! I wish it was true. We are a small practice trying to recruit for the last many years. There are many FQHC and RHC clinics around that can offer PSFL. The candidates we interview go to work at those clinics. You can’t compete with the half a million tax free money. We are looking at the end of small practices.
This statement… it’s as if you ran straight into the point and missed it.
The end of small practices has nothing to do with PSLF. And maybe your practice should offer a certain amount of loan repayment to entice new graduates to join? What you suggest is an end to a program that enables FQHCs and RHCs to recruit. FQHCs and RHCs serve a very important part of the community that may not be able to afford to go to a private practice. It is VITAL that they are able to recruit physicians.
Thank you, SG. This is why this isn’t a funny joke, because the people that are the brunt of the joke (those with large loans doing pslf) are physicians that came from low income households and are making significantly less money in an effort to serve underserved communities. The fact that physician readers are saying they wish pslf was gone is why this isn’t funny.
Yea, it’s a real issue. I would actually expect it to be MUCH bigger than you note. I would think academics would be getting paid dramatically less than they are already because of PSLF but I never saw much of a change in their incomes when PSLF came out.
That’s not the point. It’s an incentive to work in underserved communities. As the initial poster said, it’s “taking physicians away from private practice.” You can’t look at academic center income to say pslf hasn’t had an effect, the income has always been low. You would have to look at retention in those programs. While there may have not been a change in pay, I take a 150-200k per year pay cut to work in academics. It would be impossible for someone like me with a large loan burden to take a job like that without PSLF, I’d never make a dent in my loans (I have 150k more now than I started with already after 8 years of paying). The reality is PSLF not only helps underserved communities receive healthcare but allows underserved individuals to break out of poverty and enter the profession of medicine. Republicans want to keep the profession for the rich to serve the rich (as do the readers above).
I disagree that academics somehow serve the poor more than those of us in private practice. In my town and specialty, the payor mix is exactly the same at my for profit hospital as at the university hospital and they bill the self pay patients in the same way we do. CHC docs I’d make an exception for, but you don’t have to work at a CHC or similar to get PSLF. A run of the mill academic or just a clinical position at a non profit works just fine.
This is not funny.
Well done — I’m impressed by how much time and consideration it must have taken to come up with such believable satire for a post that long.
I also knew within 0.5 seconds of reading the headline that it was an April Fool’s joke, maybe because I have young kids who unconvincingly try to “get” us about every 5 minutes on this date, or maybe because I have common sense and know there’s absolutely no way this could ever be passed in such a definite, immediate manner. Either way, I read the whole post with a grin.
I’m surprised (though perhaps I shouldn’t be) by the number of emotional toddlers present who need to develop thicker skin and a sense of humor. This really is the most fragile generation. Ignore them.
Agreed 100%
Incredible! You really got me!
Strong work!
Really appreciate your writing. Thank you for everything.
I actually realized it was April Fools day and actually came here to see what Jim would put out. He got me with his buying a Tesla in the past and I can’t be fooled again. Beginning is a giveaway–the two parties don’t work together and so swiftly like that!
Was thinking the same thing about Congress never agreeing to anything quickly… unless it’s money for wars or taking away civil liberties!
I read this and started typing up a “don’t panic” email to my clients who are enrolled in PSLF. Then, I started googling for some more news on it, and couldn’t find it. Then came back here and noted the date: April 1st. Almost as good as the “I’m buying a new Tesla” hoax.
Got me….I read it, thought quickly, did more google searching. Stressed. Laughing and reassured now.
Hilarious… it’s funny how many gullible people are butthurt over a joke… it’s April 1st people…
I didn’t think this was funny or in good taste at all for April Fool’s Day — especially considering there was literally NO plain & simple “Happy April Fool’s” included at the end.
You got me again. Idk how I fall for this every year. Everyone needs to relax, take a deep breath, laugh a little at a well executed joke and carry on. Happy April Fools, folks!
LOL at all the people in the comments here who can’t take a joke. You’re mad over a spoof article on April 1? Some of you need much thicker skin
Umm.. ouch- especially since I’m in administrative forbearance now to see if I’m complete with my payments (I should be!). this would have been [curse word deleted]. But since I immediately turned to news on this and found out it was total crap (April fools guys..) .. what you should actually be worried about is the article I linked above about what the GOP wnats to do with the SAVE program.
You’re right that is probably a much easier program to end given that it was basically just an executive order, unlike PSLF.
This isn’t funny. Really. I just lost a lot of respect for you.
It really should be canceled for physicians and other high income earners, but kept for lower income jobs. There is no reason someone making $150k to 600k should have their loans forgiven. Dentists have the same loan burden but almost no dentists get their loans forgiven. Similar for pharmacists. Complete b.s. law
Hate the game, not the playas.
It really should be canceled for physicians and other high income earners, but kept for lower income jobs. There is no reason someone making $150k to 600k should have their loans forgiven. Dentists have the same loan burden but almost no dentists get their loans forgiven. Similar for pharmacists.
I, for one, found this joke hilarious! Well done! And I probably have more to lose from PSLF going away than anyone else reading this blog.