Wednesday, July 8, 2015

PSLF Math and the JD-Advantaged School Worker

From Time comes this article informing what is surely an ignorant populace about Public Service Loan Forgiveness ("PSLF").

Why ignorant?  Look at this:
The key to PSLF is that it doesn’t matter what you do at a nonprofit or in government, as long as you work for an entity focused on public service. So you can be an administrative assistant at a public school, not necessarily a teacher, and still qualify. 
Money shot.

The article's frame story features a Lewis & Clark graduate who has around $160,000 in student loan debt.  Take two scenarios:

A:  Graduate works as a full-time crap school admin job making $25k/year.  Works the job 10 years.

B:   Graduate works as a full-time private sector attorney with a $45k salary to start in flyover country and somehow manages to hang on at an eat-what-you-kill place for 10 years.

Let's assume both are going to see a 3% annual rise in income.  To keep matters simple, let's say the loans are accruing 7% interest, ignore taxes entirely, and assume that our graduates can pay 10% of gross income on their student loans.

After 10 years, Graduate B has made around $515,000.  Graduate A has made only around $285,000.  Graduate B owes around $225,000 on loans, wile Graduate A has over $250,000.

BUT Graduate A now has the power of PSLF.  Like butter on a hot summer day, Graduate A's loan balance slides to 0.00 and Graduate A's effective income over the 10-year time span is now roughly $535,000.  Graduate A is now debt free with 10 years of office experience and boatload of stories about peoples' cats and/or nieces and nephews.

Sure, at some point, Graduate B is going to cash in on lawyer riches and, if 30 years comes before death, Graduate B will get a discharge, too.  But at that moment in time, 10 years out, Graduate B has made more money.

And yet, when people discuss law school employment, what do we hear?  An obsession with JD-required jobs.  Why are we not concerned with landing new attorneys in public school administrative assistant positions?  The JD Advantage could provide an immense benefit to public school offices.  Imagine a Socratic approach to the morning announcements, or keen negotiation skills saving the school district money on bulk supply orders.

You people not only don't care about your graduates' economic fates, you seem to not care about The Children.


  1. I think you started to get your Graduate A and Graduate B confused at some point in the analysis.

    1. Correct. I am pleased to report that the editorial staff has been summarily executed.

    2. 2:12 is right, the numbers are wrong. Anyways, PSLF is useful until Congress terminates it because the DOE is going to be posting huge financial losses soon. The entire student loan program is going to blow up soon.

  2. Yes, but you are ignoring the fact that many law school graduates CAN'T get a "Graduate B" job, and REFUSE to even look for a "Graduate A" (read: "menial") job. Consider, for example, 4:07's comment. "Congress" is going to "terminate" PSLF. Why might he think that? Because he's justifying his decision to not look for work.

    With some of these people, if you dangle a job in front of them, excuse after excuse will spray out of them like a firehose.

    They're just plain lazy. They should move to fucking Greece, a country that has now officially become a dream factory. "Austerity? Screw that, let's double down and lower the retirement age to 15!"

    1. "Why might he think that?" Oh, I don't know, because last year it cost 19 billion more than CBO has anticipated, and Barack Obama was trying to cap the forgiveness at 57k, while the Republicans in Congress are united in opposition to its existence.

      So, your logic is that if someone does not seek a PSLF-qualifying job and get loan forgiveness that person is "lazy," whereas if that person seeks a no-skill, government funded position, and gets PSLF that person is diligent.

      You are totally uninformed, illogical, and probably suffering from dementia. It's like you're TRYING to sound like a toothless hillbilly with a second grade education. Why might that be?

    2. LSTC, this is why I love you like I do: you think!

      You can be relied upon to examine matters beyond slogans, and think through scenarios. And, even more rare, it's obvious that your opinions are not some passionate bias, but the conclusions of a rational process.

      I was going to ask you whether you get how rare it is to find good, op-ed journalism, but I know you know how rare it is because you had to start a blog.

  3. @1131,

    I forgot to mention insults. Excuses and INSULTS spray out of you like a firehose. Sorry. Toothless hillbilly, indeed.

    "So, your logic is that if someone does not seek a PSLF-qualifying job and get loan forgiveness that person is 'lazy,' whereas if that person seeks a no-skill, government funded position, and gets PSLF that person is diligent."

    Uh, pretty much, yeah. You go into debt, you don't have a job, and won't even "seek" one that qualifies for PSLF? Congratulations, dude - you're fucking lazy!

    You're also a fucking liar. PSLF started in 2009. It forgives loans after TEN years - which would be in 2019. So how exactly did it "cost 19 billion more than CBO has anticipated" last year? It didn't even cost one dollar "last year," you imbecile.