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?
Greetings from Peru! Not much internet today, but I was really looking forward to seeing what you all thought of this one so I’m doing what I can on my phone. Looks like I “got” more people this year than usual, but some of those were NOT happy about it.
Via email today:
#1 You got me. You really fooled me this year. To the point I texted a group text of co-residents who declared April fools almost immediately. I am now getting roasted by my buddies.
Well done! Hahahahaha
#2 If this is an April fools joke, this is really in poor taste.
#3 If this is a joke, it’s in supremely poor taste
# 4 You’re an ***wipe.. Hope you don’t play pranks on your patients you ****ing ****.
# 5 I hate you. Nearly gave me a stemi….
Then after my response (I respond to all my hate email too)
#5b All in good fun! As a poor resident it definitely gave me (and some other residents in the ED a scare!) but also a laugh. Thanks for all that you do! (Also definitely didn’t think anyone would respond! Kudos!)
Poor Andrew at StudentLoanAdvice.com got 10 emails today about this article and we refunded one person’s deposit who actually booked a consult after reading this article. We also had a blog sponsor in the student loan space whose VP wrote us this morning about a huge uptick in calls they got.
To those I scared, I’m sorry.
To those who I created work for today, I’m really sorry.
To those who thought it wasn’t funny…well, it was a little funny. 🙂
To those who thought it was in poor taste, not sure if that was because of the political nature of the subject or just that it is only funny when I joke about my financial plan (like I have on April Fools in the past) and not YOUR financial plan.
For those complaining that I should have said April Fools at the end, well, I did. If you called your financial advisor after only reading two lines, that’s on you.
For those who say the best satire is so outlandish that no one would ever believe it, man I thought the whole thing was outlandish from the first line. I’m starting to wonder how many people took Jonathan Swift’s A Modest Proposal seriously back in the day.
For those who lost respect for me, sorry to let you down. But I do 100 blog posts, 100 podcasts, and 12 newsletters (including one today) a year that are serious. Let me have a little fun once a year in exchange for all that great, free education.
For those looking for a more serious discussion of student loan policy,, we’ve got a post on that coming up soon. But I guess this is a shot across the bow that PSLF could become less generous in the future even though every past move by presidents of both parties has been to make it more generous. We still think everyone reading this would be grandfathered in to current policy if there were a change.
See you next year, although I’m not sure I can top this one. I am still having people email me to ask questions about my Tesla or disinheriting my kids though.
Thanks for sharing the fallout behind the scenes! I enjoyed the joke. If nothing else, it reinforces the importance of using more than one source for your financial news and planning.
This is in exceptionally poor taste. I don’t care that it’s April Fool’s Day or that some people think physicians “can’t take a joke” — the fact of the matter is that congressional republicans actually WOULD do something like this, and Biden very well MIGHT acquiesce for family’s making over $100k if he was worried about the whole program being gutted. The fact that it is such a believable scenario in the current political climate makes this in extremely poor taste and quite frankly ensures that I will not be utilizing WCI for any future financial guidance.
Despite understanding that this was an April fools joke, I have to agree with other comments here that this was done in very poor taste. I’m disappointed in WCI for thinking this was an appropriate prank on the community who supports his business and looks to him for guidance on such important topics like PSLF.
I see that a little bit of truth seeps through in this joke post about the insanity of and hatred from forum members…
Omg I almost had a stroke and didn’t realize this was a joke for 2 days. Saw this post at 3 am after feeding my baby and couldn’t sleep for 3 hours. TOO FAR
Glad you didn’t have a stroke AND that you realized it was a joke. Really sorry you lost sleep over it.
Lighten up, Francis gif
Very poor taste Jim. I literally was sobbing reading this. Didn’t figure it out until just now.
Sorry to make you cry. I really expected to readers to have figured it out by the time they got to the end of the article. Did you really read the whole thing including the last line and still not figure it out?
Excellent! Even better is seeing all the snowflakes reaction. I wish it were true. PSLF is a scam. All of the big “non-profits” use this as an unfair recruiting tool. They can write it all off given their status, unlike private practices. This will eventually put private practices out of business, which will be the death knell for quality jobs in the U.S.
Not sure “scam” is the right word. Scam suggests illegality and there is nothing illegal about PSLF, even if you think it’s bad policy.
Well done!
I was delighted to see that Jack Cousteau has returned for his second act.
If a reader went past the first sentence thinking this was legit, that is worrisome. Worrisome for peoples’ sentiment towards the absurdness of the political system or worrisome for people no longer reading and discerning.
Anyway, judging by the comments, this was a very effective prank!
Also judging by the comments, you may have to have a post on what April Fools’ day is about.
Come again!
You do really, really good work, and my life is better for the resources and education you and your organization have provided. But please stop with these April fools jokes. I wasted a lot of time writing my senators immediately after reading this post in the misguided but ethical sense of duty to help my colleagues who would be affected by this.
Fine, you got me, I’m dumb for falling for it. I think it says more about your status as a very trustworthy source that people value and whose thoughts and words people place in high regard. By posting these frankly puerile articles you are undermining that trust.
And no, I didn’t read the very last sentence in the article saying it was a joke. Again, I’m dumb, you win. And now the gullible folk like me will have just a tinge of cynicism with what they read on your site now. Is that worth it?
Thanks for everything else you do, I am sincerely grateful.
Sorry to waste your time. I was actually a little worried that someone would actually go to write their Senator so I made the link in the article to “write your Senator” go to a page that said, “This was just an April Fools Joke.” I guess you didn’t go through that link.
While the goal of an April Fools Joke might be to have a little fun and “get” you, it’s only supposed to “get” you for a few seconds or minutes, not hours or days. Sorry to waste your time.
Calling back to why this was in incredibly poor taste. If conservatives win and the dept of ed is disbanded as they are promising to do, pslf will become functionally unusable. Those of us who came from no money, became doctors, and choose significant reductions in pay to work in underserved communities will be rewarded with insurmountable dept. I know I for one will have to leave my job where I work with underserved communities and upend my family to avoid financial ruin (if I’m lucky). There are clearly a lot of readers that don’t understand the seriousness of this issue.
While I still think the elimination of PSLF is extremely unlikely, even if Republicans take the House, Senate, and White House, (remember it takes an act of Congress and the filibuster is still part of the Senate), I think you’re being a bit overdramatic on the issue. A large percentage of med students/docs, including me, didn’t get any help from parents or scholarships to pay for their medical education and have managed to muddle through, get their loans taken care of by contract or paying them off, and still be financially successful without PSLF.
You’ve taken a job that you can only afford if PSLF exists. If it goes away, yes, you’ll need a new job. That’s part of life. Lots of us took/take jobs that aren’t our most perfect job for financial reasons. That’s why it is called work.