How Many PSLF Deadbeats Are There?

Answer: Don’t Ask The Wall Street Journal.

According to Josh Mitchell’s, “U.S. Student-Loan Forgiveness Program Proves Costly,” 295,000 people are signed up for Public Service Loan Forgiveness, which cancels federal student loans after 10 years of payments with no tax liability afterwards, unlike other income-based repayment plans.

But before going further, a few compliments:

(1) The WSJ is correct that PSLF is a “forgiveness program,” in contrast to at least one past instance when the WSJ called IBR a “student-debt forgiveness program.” More accurately, IBR is a monthly-payment-reduction program.

(2) Moreover, I don’t think I’ve ever defended PSLF, so the WSJ’s examples of doctors taking advantage of the program, even though there’s a good chance they could repay their loans, are more believable than past reporting.

(3) Again, it’s nice to see the spotlight turned away from law grads.

However, the WSJ still doesn’t answer the question: How many of the 295,000 debtors (and projected 600,000 over the next decade) on PSLF will earn high enough incomes to compromise PSLF? Does the program work on net? If the IBR deadbeat is a myth, then shouldn’t we be just as critical of the PSLF deadbeat?

I don’t really have a dog in the PSLF fight, and it should be fairly easy to reform it to take the advantages away from the deadbeats, but the right questions still aren’t being asked. If the unfair beneficiaries are few in number, then they shouldn’t be sensationalized. (Amusingly, the New America Foundation argues that PSLF should be eliminated entirely because the WSJ made it look so bad that it could lead to further backlash against IBR, which, of course, the NAF has never engaged in.)

Speaking of asking the right questions: Is the problem PSLF, or is it the Grad PLUS Loan Program?


  1. I always found it odd that government employees were getting yet another incentive. Yes 30 years ago perhaps government employees made lower salaries, but for the past 10 everyone wants a government job because of stability, benefits, and yes, higher pay. So to wipe out loans on top of that is a huge windfall. It is a fiction to claim the government employee would quit their job and work unstable doc review for less money if not for something like PSLF.

    The real victims are those that could not get stable government jobs. Which is pretty much everyone. Yes there are a few in Big Law which make more money, although with how Big Law works most are out within 5 years, and over a 10, or 20 year period, it’s doubtful even they are doing better than the government employee, especially with the pension benefits and vacation days added in, as well as on a per hour basis.

    I don’t know that PSLF will be repealed, but there will more than likely be a backlash. If student loan bankruptcy could be removed for less than 1% of doctors taking advantage of it (the vast majority of doctors indeed did just pay their loans) then PSLF looks even more tenuous to me. We will see in about 2 years though when the first discharges are slated. I suspect next year the changes will happen. People will argue but considering the courts had no problem with removing student loan bankruptcy, a Constitutional right, and threw out all the law school scam lawsuits, I doubt they will protect PSLF either.

  2. Okay, so I get that you think there should be a means-test for PSLF.

    But how does that make you conclude that people with money who are benefitting from PSLF are “deadbeats”?

    Their monthly payments are probably a lot higher than the ones those blessed poor people are making – right? Assuming the poor are even making payments, that is.

    1. One, I use “deadbeats” to caricature the WSJ and others who argue that people are unfairly benefiting from PSLF without telling us how common they are and what their impact is. After much fear-mongering about how high-income lawyers were gaming IBR, the GAO found that only a fraction of IBR enrollees actually had high earnings. The WSJ should apply the same rigor to PSLF, and it didn’t.

      Two, I don’t understand your point about “those blessed poor people.” I fail to see how anyone else is relevant to the discussion of PSLF enrollees who can afford to repay more of their loans.

      1. @5:53,

        If anyone is a “deadbeat,” it’s the impoverished asshole who is paying little or nothing on his student loans. Not the rich doctor on PSLF who is almost certainly STILL (PSLF notwithstanding) paying at least $1500 every single month on his loans. You DO realize that IBR takes the rich guy’s higher income into account when it calculates what his monthly payment will be – right?

      2. 9:14,

        If said poor people borrow and spend more money than they can ever pay back, then yeah – they are GALACTIC fucking assholes.


  3. Listen, I am on the program- but its a deadbeat program. I have enough cash tomorrow to pay off the complete balance of my student loans. But I figure- why not make the tiny monthly (10% of AGI above some poverty limit) payments and get forgiveness in a few years. I will get tax free discharge of 40-50k at least. With all the cash I saved up, Ill make a down payment on a house.

    I know many other folks that have above middle class salaries, elite degrees, government job security (w that health care for life, pension etc) but take advantage of the program. Maybe thats good, maybe thats bad. But lets not pretend that its not a big transfer from taxpayers to a relatively affluent class of people.

    1. @8:57,

      10 percent of your AGI is a “tiny” amount? Yet you claim to have enough “cash tomorrow” to pay off your student loans in full?

      LOL – how much money do you owe, anyway? 25 cents? Obvious sockpuppet is obvious.

      1. Yes, everyone that provides contrary evidence is a sock puppet. The reason is the first year of IBR is free- because its based on last year’s tax return. The second year is deeply discounted if you got a job after graduation in like May-August. You can save during that period. I saved around 40-50k then.

        My job is mid range, but has awesome benefits and deferred compensation. Again, my huge 401k payments (over 20% of income) take money off my AGI and lower the student loan payment. Again, I game the system.

        Additionally, inheritance and gifts are complete tax free and dont count in the AGI calculation. Got that too.

      2. @12:01,

        Sorry, I guess I must have missed “everyone” providing “contrary evidence.” For some screwy reason, for a second there I thought it was just one anonymous guy providing an unverifiable story, rather than “evidence.”

        You didn’t answer your question. How much do you owe? 25 cents? Also, is there any other rich guy besides you who – bizzarely – took out student loans and then went on IBR?

        Your story doesn’t add up.

    2. @8:57,

      PS – if these Harvard-trained plutocrats that you run with were as “affluent” as you claim they are, they wouldn’t have borrowed any money in the first place.

      They would have just made out a check to the university. Paid in full.

      1. Listen, if you want to create straw men and burn them down, enjoy. But it is remarkably hyperbolic compared to what my post actual said. So enjoy the burning.

      2. @12:03,

        Wow. You don’t know the difference between sarcasm and a “straw man.”

        You don’t know anything at all about how the “affluent” act, do you? It sticks out like a sore thumb. Here’s a PROTIP for you: the “affluent” don’t borrow money for college or grad school and then go on IBR. Simple enough that anyone can understand it, right? But sorry for confusing you with all the, um, straw men.

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