Afraid of IBR and PSLF

[ehwhatsupdoc]

I've seen a lot people on here support IBR and PSLF to pay off their student loans. But aren't you guys afraid you might make too much money at some point where you no longer are eligible. Say you've been on the PSLF plan for 9 years and stoked about having your loans forgiven but on the 10th year you get a significant pay raise and now are kicked off the plan - can this happen? You would now owe a large balance since all that interest has been accruing. I feel like IBR and PSLF can be a trap for people looking to make higher income at some point. This is the problem with government handouts, it makes people timid and scared of losing the handout so they sabotage themselves by not going after making a higher salary if they are capable of doing so. Please educate me on PSLF if I have it wrong. Thank you!

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[mik30102]

I've seen a lot people on here support IBR and PSLF to pay off their student loans. But aren't you guys afraid you might make too much money at some point where you no longer are eligible. Say you've been on the PSLF plan for 9 years and stoked about having your loans forgiven but on the 10th year you get a significant pay raise and now are kicked off the plan - can this happen? You would now owe a large balance since all that interest has been accruing. I feel like IBR and PSLF can be a trap for people looking to make higher income at some point. This is the problem with government handouts, it makes people timid and scared of losing the handout so they sabotage themselves by not going after making a higher salary if they are capable of doing so. Please educate me on PSLF if I have it wrong. Thank you!

The only way to get kicked off the plan is if your payment is more then it would be under a 10 year plan. If thats the case who cares if your kicked off since it no longer makes sense to due a income based repayment plan? I am unfortunately pretty much depending in IBR due to getting both a Pharm D and a evantal MD. I do not expect PSLF to be around for me but am depending on the 25 year forgiveness which I think is fair.

 

[DrMidlife]

there's no income limit on either program. and i think you are confusing "support" with "accept limited options in very bad situation".

 

[sazerac]

I've seen a lot people on here support IBR and PSLF to pay off their student loans. But aren't you guys afraid you might make too much money at some point where you no longer are eligible. Say you've been on the PSLF plan for 9 years and stoked about having your loans forgiven but on the 10th year you get a significant pay raise and now are kicked off the plan - can this happen? You would now owe a large balance since all that interest has been accruing. I feel like IBR and PSLF can be a trap for people looking to make higher income at some point. This is the problem with government handouts, it makes people timid and scared of losing the handout so they sabotage themselves by not going after making a higher salary if they are capable of doing so. Please educate me on PSLF if I have it wrong. Thank you!

With IBR, you pay the minimum of either a payment based on your income or what the ten-year repayment plan would have been. If your income is low, you pay based on your low income. If your income is high, you pay based on what your standard loan payments would have been. Either way, you win.

With PSLF, your loan is forgiven if you make 120 qualifying monthly payments. Coincidentally, qualifying payments are either IBR payments or payments under the ten year plan. Either way you win.

There is nothing to see here.

 

[eablackwell]

The big issue with PSLF isn't this, but if it will even be around in the future for doctors, as they're attempting to close the "doctor loophole" and limit forgiveness to max undergrad loan amounts (50 something thousand, I think). This would make it pretty useless for people coming out of med school. However, our finaid director went to some national conference this past Jan where someone from DC came and told them since PSLF is in all our MPNs as of now those who already took out loans would very likely (95ish % chance) be grandfathered in.

This is more of a concern for those of you guys coming out of premed. We're being told later classes should not be relying on PSLF, which sucks

 

[Chip N Sawbones]

I don't think anyone should rely on PSLF, at least not for a few more years when we'll be able to see if doctors actually get repaid or not. Yes, PSLF is written into our loan contracts, but the government has been known to find ways to break its contracts before. Treat PSLF as a really good bonus-if it happens, wonderful. If not, you just have to repay your loans like everyone else. Keep in mind too that most physicians who work in nonprofit hospitals are not directly employed by the hospital, but rather by for-profit management groups. I have a feeling that as students who are eligible for PSLF begin to graduate residencies, the few job opportunities working directly for the hospitals will fill up fast. What will actually happen remains to be seen, but for now, the smart move is to plan on repaying loans and take advantage of PSLF if it still looks like a good opportunity when you're done with residency.