The Future Of PSLF Borrowers | Student Loan Planner


There’s over a million borrowers right
now that are set to receive over $100 billion under the Public
Service Loan Forgiveness program that’s going to be forgiven. And that’s already
meaning, that there will be countless more people approved for this program
under the current rules. The media has discussed ad nauseam this 99% rejection
rate for PSLF. Now while that is true, the reasons that is the case is because
the program had structural problems prior to 2010, where you had ineligible
loans being issued to the vast majority of borrowers. Unless you had a PhD in
student loan ridiculous rules, then you would not have been able to get your
loan certified correctly for anybody that borrowed before 2010. And then on
top of that, you have all of these really complicated issues with IBR showing
up in about 2009, and then all these new repayment programs that came into
existence and built in incentives for the servicers to not tell people about
the PSLF program, especially early on, and that’s the reason for these 99%
rejection rates. It’s nothing that’s broken with the program, per se, in terms
of how it will operate in the future, it was broken in the past and you’re seeing
the results of 10 years later, because you have to have 10 years of credit
under PSLF to get loans forgiven. You are seeing the results of that and the
structural problems that existed with the PSLF program 10 years ago,
right? And so since there’s a lot fewer issues today about awareness and getting
implemented with PSLF, there’s going to be a lot fewer issues with the program ten
years from now. But everyone is kind of thinking about what they’re going to do
for the next ten years based off of what happened in the past ten years, and the
past is not a guarantee of the way the future works, right? And if you think
about the interest group that surrounds this program, now that you have 1.1
million borrowers that are pursuing PSLF and you have $100 billion
that they are counting on the government paying off for them, this is a very large
committed group of people that will lobby fiercely for this program to stick
around. That means that for high-value constituents like this that are certain
to contact their elected representatives
frequently, Congress is gonna get an earful. And frankly, if you need to save $100 billion you’re probably going to look towards something like
reforming the cost-of-living adjustment on Social Security, or you’re
probably gonna look at some weird payout formula difference with Medicare, or
you’ll figure out some way to offset the cost of insurance subsidies on to
consumers with the ACA. You’re probably not going to look at student loans
because of just how committed this group of people is in pursuing getting their
loans forgiven. So, don’t freak out about the 99% rejection rate. Take heart that
you are in excellent company with 1.1 million people now counting on this program.

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