Loan Forgiveness

[ElliotPiano]

I am in the process of deciding to attend UMKC's 6 year B.A./M.D. program or regular undergraduate. If I attend UMKC, I will accrue 250k in debt. If I do 10 years of payments through PAYE or IBR, will my debt completely be erased (taxable) or can someone explain how the new cap of $57500 will impact the situation of paying my student debt. Any answers are greatly appreciated, I am very scared for the next step.

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[DrMidlife]

The cap is in a budget proposal, not in a law. So it's still just a possibility.

As for what your options will be 6-7 years from now, all you can assume is that there will be repayment plans, that may or may not include forgiveness, for the large masses of graduating MDs who have well over $250k debt. The AMA and the hospital lobby will not leave you without options. There will be 25,000 new US doctors every year, with or without you.

PSLF is still a complete unknown until 2017, when the first forgiveness period starts. The guvmint hasn't had to forgive anything yet under this program. Also, the rules for PSLF may not be possible for you to meet, because you may or may not be able to work directly for a non-profit for 10 years.

Point being, be less attached to forgiveness, because there's no guarantee. Minimizing your debt load by going to public schools is the best strategy, which you're doing.

Best of luck to you.

 

[ElliotPiano]

The cap is in a budget proposal, not in a law. So it's still just a possibility.

As for what your options will be 6-7 years from now, all you can assume is that there will be repayment plans, that may or may not include forgiveness, for the large masses of graduating MDs who have well over $250k debt. The AMA and the hospital lobby will not leave you without options. There will be 25,000 new US doctors every year, with or without you.

PSLF is still a complete unknown until 2017, when the first forgiveness period starts. The guvmint hasn't had to forgive anything yet under this program. Also, the rules for PSLF may not be possible for you to meet, because you may or may not be able to work directly for a non-profit for 10 years.

Point being, be less attached to forgiveness, because there's no guarantee. Minimizing your debt load by going to public schools is the best strategy, which you're doing.

Best of luck to you.

So if PSLF isn't around when I graduate, is PAYE or IBR an appropriate way to pay off debt?

 

[DrMidlife]

So if PSLF isn't around when I graduate, is PAYE or IBR an appropriate way to pay off debt?

Generally yes, and there will be more acronyms over time.

Big fat note: you can only do IBR and PAYE and PSLF with federal loans. With a 250k price tag you will get excited about low interest rates on private loans, but THOSE ARE NOT ELIGIBLE for federal repayment programs.