In case you were hoping to have your loans forgiven...

[kb6]

Now that the US has elected Trump, everything is up in the air. This would not be the year to assume you can manage your loans with an IBR program like REPAYE.

[Poli92]

This is important. Trump's election has the potential to radically reshape the outlook for students interested in public policy, writ large, in a number of ways. Loans are certainly one, but the probability of a federal hiring and/or pay freeze is pretty great.

I currently work in a moderately politically contentious federal agency and going to work yesterday was like walking into a funeral. Pretty much everyone is expecting a freeze at a minimum and changes to the merit system -- allowing mass cuts of GS employees -- accompanied by agency closures as a worst case scenario.

Not to be all doom and gloom, but if your desired career path leads to the federal government, it is worth bearing in mind that the market will likely get even more competitive, and the salaries will likely not increase. At any rate, the picture will become clearer once we get a good sense of his intended cabinet and policies and of course once he actually gets into office. 

[kb6]

Great points, Poli92. My friends who work in the federal government or for contractors are making exit plans. A friend who works for a development consulting firm that has a lot of USAID contracts said the head of the company sent an email telling staff not to worry, they probably won't lose their funding for another year or so. Even for those whose jobs are not in jeopardy - working for a Trump State Department or EPA is a very different prospect than working for an Obama one.

 

 

[Poli92]

58 minutes ago, kb6 said:

they probably won't lose their funding for another year or so.

This is probably true. The most tumultuous period will be between the inauguration and the end of the following budgeting cycle, with many changes likely not taking effect until later in that timeframe. So, people who already have jobs may at least have some time, if not ending up totally fine. That said, for students interested in entering grad school in the fall, the job they want may not exist by the time they graduate. 

[kb6]

On 11/10/2016 at 10:39 AM, Poli92 said:

This is probably true. The most tumultuous period will be between the inauguration and the end of the following budgeting cycle, with many changes likely not taking effect until later in that timeframe. So, people who already have jobs may at least have some time, if not ending up totally fine. That said, for students interested in entering grad school in the fall, the job they want may not exist by the time they graduate. 

He's also planning a hiring freeze for the federal government. The near future is bleak.

[JerryK]

The hiring freeze is actually going to be one of the first things he does, part of his plan for the first hundred days. If you were thinking of getting a job in the government in the near future, it's going to be much more difficult. Trump plans to shrink the government by 10% by freezing all hiring so new employees will have to wait until 10% of employees retire according to the plan. Yes, there will be some issues with this but it won't be difficult for him to push this through soon after taking office through an executive order.

 

President-elect Trump promises to order federal hiring freeze in first 100 days

By Richard Reeve/ABC7 Thursday, November 10th 2016

WASHINGTON (ABC7) — Two-and-a-half weeks ago, Donald Trump laid out his plans for his first 100 days in office.

L’Enfant Plaza is a second home to thousands of federal government workers.

On this meet-and-greet day for the new President-elect, some are learning about a new Trump plan that includes a federal hiring freeze.

“I'm hugely concerned,” says Gioia Albi, a twenty-year federal employee. “Just to get hired in the federal government is difficult. Now you're talking about stopping that? It hugely concerns me.”

Trump first pitched the idea in October, during a speech in Gettysburg, Pennsylvania.

“A hiring freeze on all federal employees to reduce the federal workforce through attrition,” he said.

The president-elect called the plan a top priority.

It would reduce the federal workforce by not replacing people who leave government service.

[JerryK]

There is more information out on the plans to freeze government hiring, reduce pensions, and make it easier to remove government employees. This will all make it so much more difficult to obtain a government job in the future and the benefits of working for the government will likely be diminished from what is available now.

 

https://www.washingtonpost.com/news/powerpost/wp/2016/11/21/trump-republicans-plan-to-target-government-workers-benefits-and-job-security/

[tairos]

45 minutes ago, JerryK said:

There is more information out on the plans to freeze government hiring, reduce pensions, and make it easier to remove government employees. This will all make it so much more difficult to obtain a government job in the future and the benefits of working for the government will likely be diminished from what is available now.

 

https://www.washingtonpost.com/news/powerpost/wp/2016/11/21/trump-republicans-plan-to-target-government-workers-benefits-and-job-security/

These two sentiments are perhaps at odds.  Federal employment has become comparatively more attractive as the benefits of private sector employment have slid inexorably into the ground.  Making federal employment less attractive will diminish competition, and higher turnover may in the longterm make breaking in an easier feat.  But yes, probably not propitious news for those of us at the entry level for the next several years.

[JerryK]

I certainly have never gotten the impression that federal employment has become comparatively more attractive. This forum always mentions the opposite and I personally have never heard this from anyone working in the federal government. In fact, almost always the private sector is more attractive compared to low-paying govt jobs except for the tenure aspect. However, many people are interested in government jobs despite the fact that it is not as attractive as the private sector (in terms of the pay). They're interested because it's what they want to do. And many times people who want to go into federal work end up in the private sector because the benefits are better- which becomes more important if you have to pay off student loans.

As mentioned before, the changes could come quickly. Here's the last line from the Washington Post article:

"Trump can freeze hiring without Congress’s approval, with an executive order or less formal instructions to federal agencies."

[kb6]

On 11/21/2016 at 4:33 PM, tairos said:

These two sentiments are perhaps at odds.  Federal employment has become comparatively more attractive as the benefits of private sector employment have slid inexorably into the ground.  Making federal employment less attractive will diminish competition, and higher turnover may in the longterm make breaking in an easier feat.  But yes, probably not propitious news for those of us at the entry level for the next several years.

Fed jobs are attractive for job security, but not for pay - especially as your career progresses. And Trump's plan is to shrink the government through attrition, so the hiring freeze will offset any increase in turnover. 

[eltothemo]

Yikes. That's all I can say.

[Mr. Government]

Some more discussion on the future of PSLF: https://www.buzzfeed.com/mollyhensleyclancy/failures-by-obama-put-student-debt-forgiveness-in-jeopardy

[Damis]

Just in case you needed more perspective. This is probably the worst nightmare one could imagine.

 

Edited December 30, 2016 by Damis

[tairos]

1 hour ago, Damis said:

Just in case you needed more perspective. This is probably the worst nightmare one could imagine.

 

The worst nightmare one could imagine?  Did Trump open an inter-dimensional portal through which the horrors of the Warp will consume our souls?  I guess he wasn't kidding about his presidency being huge.  

[MaxwellAlum]

12 hours ago, Damis said:

Just in case you needed more perspective. This is probably the worst nightmare one could imagine.

 

Actually, if they win this could set a precedent that would give the rest of us a lot of peace of mind.  If the government can't go back on its promise to these folks, that means it can't go back on its promise to everyone else who has been making payments that are supposed to count towards PSLF.  Of course, for those people applying to grad school now, there's no guarantee Congress won't eliminate the program before they take out their loans.

[Quickmick]

Maybe I am missing something, but I don't see the PSLF as some magic bullet. Playing around with the repayment calc. (https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action#view-repayment-plans it really doesn't seem that wonderful. Using the average debt for a 4/yr public institution I found the (attached) following. Under standard and graduated payment plans PSLF pays zero. With REPAYE and PAYE you save 10-15%, which, while nice, isn't a huge number. The ICR/IBR numbers get up to 15-25ish%, but only come into play if you meet poverty guidelines (up to 150%, I think). It doesn't appear to be a massive burden to keep it going, and if it goes away it would not (in most cases) add tens of thousands of dollars to an individual's obligations.

 

 

Edited December 30, 2016 by Quickmick

[MaxwellAlum]

2 hours ago, Quickmick said:

Maybe I am missing something, but I don't see the PSLF as some magic bullet. Playing around with the repayment calc. (https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action#view-repayment-plans it really doesn't seem that wonderful. Using the average debt for a 4/yr public institution I found the (attached) following. Under standard and graduated payment plans PSLF pays zero. With REPAYE and PAYE you save 10-15%, which, while nice, isn't a huge number. The ICR/IBR numbers get up to 15-25ish%, but only come into play if you meet poverty guidelines (up to 150%, I think). It doesn't appear to be a massive burden to keep it going, and if it goes away it would not (in most cases) add tens of thousands of dollars to an individual's obligations.

It helps people who borrow a lot the most (that's why the program is becoming increasingly controversial).  For people who have $50k or more in debt, it's pretty easy to go on the income-based plan and not really make much of a dent in your balance over several years, because you end up just barely covering the interest on a public sector salary.  Factor in that the money you save on your loan payment, you can put in a retirement fund and get a better return on that, it makes a lot of sense for many people to do income-based repayment and hope for PSLF (caveat - I do NOT recommend borrowing more than $50k on the basis of potentially getting PSLF - those loan payments, even if they are income-based, hurt a lot more when you're also supporting a family).

Edited December 30, 2016 by MaxwellAlum