Administration Suggests Changes to PAYE and PSLF in Budget Proposal
Each year, the executive branch submits a budget PROPOSAL to the legislative branch. The administration's budget serves as a starting point for negotiations in congressional committees. To me, there is no world in which this congress passes this president's proposal precisely as it has been submitted. More on the bizarre budget process from the Center on Budget and Policy Priorities and from the Washington Post. In my view, the substance of the budget proposal is important for two reasons: first, it…
Only Direct Loans Are Eligible for Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is available for Direct Loans ONLY. If you have older federal loans from the FFEL Program, Perkins loans, or Health Professions Student Loans, you may consolidate those into a Direct Consolidation Loan (which is eligible for PSLF) and then start making payments towards forgiveness. Any payments you may have made on the ineligible loans before they were consolidated into Direct do not, cannot and will never count toward the required 120 qualifying payments. Sorry. I don’t make the rules,…
Congress Seeks to Increase Taxes on Student Loan Borrowers
Sigh. According to the Joint Committee on Taxation, the feds can increase revenues by $13.0 billion over 2014-2023 by repealing the student loan interest deduction and shifting the full burden of student loan interest back to student loan borrowers. And if Congress also required student loan borrowers who have committed their careers to public service to pay tax on loan forgiveness they earned, the Joint Committee on Taxation estimates they could increase tax revenue by an additional $1.1 billion. The “Tax Reform Act of 2014”…
Will Proposed Cuts to Public Service Loan Forgiveness Impact Existing Borrowers?
Us student loan borrowers are understandably concerned about parts of President Obama's proposed budget, but we would do well to remember that the budget proposal itself cannot, does not, and never will determine whether any future cuts to student loan forgiveness would apply to existing borrowers. The offending document, the Budget of the United States Government, Fiscal Year 2015, is a political document. It consists of 212 pages of budget overviews organized by agency and summary tables of the dollar amounts in question.…
President’s FY 2015 Budget Recommends Tax Breaks For Students
On Monday, White House officials outlined in broad terms several of the President's tax priorities from his proposed fiscal year 2015 federal budget. Among the key provisions, his FY 2015 budget asks Congress to make permanent the American Opportunity Tax Credit, currently set to expire in December 2017. The administration says the credit will provide an average benefit of $1,110 to 11.5 million families. The benefit provides up to $2,500 in partially refundable tax credits for tuition. President Obama is also proposing a simplification…
