PSLF is actually not a taxable event, which is part of its appeal. IBR is, of course, but if I don’t qualify for PSLF for whatever reason, I have that extra 15 years to figure it out, at which time I will be in a position to pay more toward the loan (the nature of my repayment is that it increases) and save for the additional income tax. That’s the whole idea behind the book Nicole’s talking about.
The article, as it is, seems a bit hasty and unnecessarily inflammatory because no one has all the facts yet. FedLoan and the Dept. of Education don’t know how forgiveness will be administered, and if you apply for the program they tell you that pretty early on. That’s terrible! The process should be way more transparent! But it’s not hidden information. In the case of the lawyer, the PSLF application makes a distinction between working for a 501(c)(3) organization and other tax-exempt organizations. I think THAT is where we’re running into problems, and the article doesn’t address it. If I remember the application correctly, if a person doesn’t work for a 501(c)(3), they have to fill out further paperwork to prove their employer’s tax-exempt status, and then it’s certainly a gray area whether you actually qualify because it’s based on the primary function of your employer. I wonder if the lawyer in the article works for Veterans for America as a lawyer for vets or the organization, or as a lawyer for an action fund. We don’t know, but all documentation for the PSLF suggests this makes a difference.
It’s unfair for FedLoan to rescind an acceptance, but I think we’re going to see refinement of the program as Oct. 2017 approaches. It seems to me that the journalist didn’t do much searching into what makes an applicant a candidate, which is a shame because the website is already way more informative than it was when I applied 2 years ago and I’d hate for people to be turned off from what is clearly a problematic but potentially helpful program. I am also possibly more willing to give this a shot because I didn’t choose my employer based on its qualification for the program AND I don’t have six-figure loans, so take all this for what you will.