Student loan refinance rates - DRB, SoFi, etc.

[goodoldalky]

I just wanted to get a quick feel for what rates folks were getting on their loan refi's. They all advertise some very attractive rates but it's hard to know if anyone truly qualifies. I've looked into SoFi and DRB but I know there are other options now.

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Members don't see this ad.

 

[The White Coat Investor]

I just wanted to get a quick feel for what rates folks were getting on their loan refi's. They all advertise some very attractive rates but it's hard to know if anyone truly qualifies. I've looked into SoFi and DRB but I know there are other options now.

It takes 5 minutes to get your rate on SoFi. Why not just see what yours is since what other people have doesn't matter? If you use the links on my site you get another $300.

http://whitecoatinvestor.com/new-options-for-student-loan-refinancing/

But I've heard the gamut from the lowest advertised rate to something not any lower than what they currently have. It really varies quite a bit.

 

[link2swim06]

The word on the street is DRB now offers residents the option to refinance. Apparently they will let you "only" pay $100/month until you are an attending.

If this is true...that's about 20-50K in savings in interest (during residency alone) for many residents if they refinance immediately after graduating med school.

 

[The White Coat Investor]

The word on the street is DRB now offers residents the option to refinance. Apparently they will let you "only" pay $100/month until you are an attending.

If this is true...that's about 20-50K in savings in interest (during residency alone) for many residents if they refinance immediately after graduating med school.

That was not the case a month ago when I spoke to the chairman of the board of DRB about it. If it is now the case, then great. I would have thought he would have emailed me about it though after our conversation and my offer to publicize that sort of thing widely.

 

[hoot504]

The word on the street is DRB now offers residents the option to refinance. Apparently they will let you "only" pay $100/month until you are an attending.

If this is true...that's about 20-50K in savings in interest (during residency alone) for many residents if they refinance immediately after graduating med school.

Can anyone else corroborate this?

 

[link2swim06]

That was not the case a month ago when I spoke to the chairman of the board of DRB about it. If it is now the case, then great. I would have thought he would have emailed me about it though after our conversation and my offer to publicize that sort of thing widely.

I don't think they are really advertising it yet (see below).

I chatted briefly with one of their rep and he confirmed it. BUT the big issue is that you have to make somewhere around 52 or 54K for them to even consider your application. Many residents are slightly below this making them likely ineligible. I make a few thousand more than that...I am about to send off an application and I will report back how it goes.

At the bottom of their website:

POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents an economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, fellow, or similar post-graduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

If DRB agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, it is to the borrower's advantage and the borrower is encouraged to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when DRB has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.

 

[The White Coat Investor]

Cool, I'm happy to hear it.

 

[The White Coat Investor]

Confirmed details are true. I'll run a post about it this weekend.

 

[midweststudent1]

I have a few questions about refinancing: with your loans thorough the loan originators (nelnet or whoever else), if you would die while in training, your spouse would not be responsible, correct? ......is this also true for the refinanced loans? And are the refinanced loans non-bankruptable like the original student loans?

 

[gutonc]

Nice to see. But should note that there are a LOT of "may"s in that text above. I know it's probably mostly lawyerspeak but caveat borrower and all that.

 

[Lysinee]

When you look at the medical section on the DRB site it says we also work with other healthcare professionals including NEW! Residents and Fellows.

 

[link2swim06]

Nice to see. But should note that there are a LOT of "may"s in that text above. I know it's probably mostly lawyerspeak but caveat borrower and all that.

The biggest issue is getting approved with a residents salary. Most residents will not make enough except in select areas of the country. At least during the first year or two of residency.

 

[The White Coat Investor]

The biggest issue is getting approved with a residents salary. Most residents will not make enough except in select areas of the country. At least during the first year or two of residency.

Nope. They're approving you based on your projected attending salary now. Cool huh. I've got a post running Saturday morning on it. You can sign up to get it in your email box here:

http://feeds.feedburner.com/TheWhiteCoatInvestor

 

[link2swim06]

Nope. They're approving you based on your projected attending salary now. Cool huh. I've got a post running Saturday morning on it. You can sign up to get it in your email box here:

http://feeds.feedburner.com/TheWhiteCoatInvestor

Their rep I chatted with never specifically told me that. Anyhow this is a game changer and something 'most' residents should do.

This is when I wish I had a financial blog haha.
/retire on affiliate referrals

 

[The White Coat Investor]

Their rep I chatted with never specifically told me that. Anyhow this is a game changer and something 'most' residents should do.

This is when I wish I had a financial blog haha.
/retire on affiliate referrals

I agree, it's a game changer. It'll make me some money too I'm sure.

I'm not convinced MOST residents should do it though. Many simply don't know yet whether they should hold out for forgiveness. It would be a shame to refinance your loans then go spend 7 years in academia where you could have gotten your loans forgiven.

 

[link2swim06]

I agree, it's a game changer. It'll make me some money too I'm sure.

I'm not convinced MOST residents should do it though. Many simply don't know yet whether they should hold out for forgiveness. It would be a shame to refinance your loans then go spend 7 years in academia where you could have gotten your loans forgiven.

True...but I feel like a fair percentage of residents have an idea of what they will go into from the start. I don't have the data in front of me...but I'm guessing most people end up in private practice. Especially in things with a shorter residency (family med, EM, derm, anesthesia, etc.).

Anyhow, this is the sort of thing that should have been done years ago. Residents are a low-risk group for banks and there was a lot of money to be made for private lenders (like DRB) to make from doing this.

The only scary thing is you limit your repayment options and if residency doesn't work out you have lost some of the safety net options that the federal loans provide (i.e. public loan forgiveness program and income based repayment).

Oh and I bought your book awhile back. It was good. Just need to start making a real salary so I can start using the info.

 

[Doctors Without Quarters]

As WCI indicated, for interns, residents and fellows, refinancing is a tricky proposition as even if you do get approved, it may not be suitable to refinance if you're accumulating meaningful PSLF or PAYE forgiveness. Medical trainees need to understand the risks of refinancing that can often by determined by their specific specialty and state (Stark law interpretation). And if you have a long runway of training ahead of you, then you probably shouldn't choose a variable rate if you don't have the means to pay down your debt before you finish training if rates head up. Rate and term selection are critical considerations in the context of a resident's liquidity needs. Needless to say, there's a glaring need for suitability analysis and repayment strategy in this space.

 

[ORMD]

Medical trainees need to understand the risks of refinancing that can often by determined by their specific specialty and state (Stark law interpretation).

Could you be more specific? What does loan refinancing/consolidation have to do with Stark? Are you talking about loan payoffs as a part of hospital/group-practice recruitment?

 

[link2swim06]

Could you be more specific? What does loan refinancing/consolidation have to do with Stark? Are you talking about loan payoffs as a part of hospital/group-practice recruitment?

The biggest risk imo is you lose the payment options of federal loans.

Remember with federal loans you could always become a janitor for the government and your loans will disappear in 10 years. The same is not true if you refinance.

No idea how or why the stark law would matter with student loans.

 

[Doctors Without Quarters]

Indeed, I've suggested librarian in jest but gov't janitor certainly applies as well. Regarding my Stark law interpretation reference, as an example, it's strict in CA. In the Kaiser system, trainees are paid by the Kaiser foundation and are PSLF eligible, but if they work for TPMG after training they are no longer PSLF eligible. In states where hospitals are more apt to access Stark loopholes, there are more opportunities to be employed directly by a 501c3 available in the hospitals where they trained or elsewhere in the state (not true for all specialties). I'm actually surprised more of these hospitals haven't recognized this potential federal "subsidy" to their compensation package and referenced it in recruiting. Currently, it's exclusively incumbent upon the borrower to identify and factor this economic benefit into their decisioning. If you're training in Florida and wish to stay in Florida after training, you'll likely have more PSLF opportunities available to you than you will if you're to head to the Left Coast. Candidly, I don't have extensive familiarity with this dynamic in states other than CA and FL, but I'd be more inclined to greenlight in-residency refinancing for a resident in CA than one in FL.

 

[The White Coat Investor]

I agree its weird that 501(c)3 employers don't advertise the fact more.

 

[GradSchoolLoans]

I just wanted to get a quick feel for what rates folks were getting on their loan refi's. They all advertise some very attractive rates but it's hard to know if anyone truly qualifies. I've looked into SoFi and DRB but I know there are other options now.

Hi there,
GradSchoolLoans.com is a new marketplace lender in the FinTech industry that focuses only and directly on medical professional's student loan debt. We refinance to help save Resident Doctors, Fellows and Doctors on average $21,000 (depending on the size of the student loan debt). We also allow deferment through residency and you can consolidate all of your loans into a single monthly payment. Our web site will guide you through to see if you are eligible (30 sec. process). You can also refinance as soon as you Match. We are the only true private lender that only focuses on medical professionals and their student loan debt.

Additionally, we have an exciting Refer-A-Friend program (Refer-A-Doc, Refer-A-ResidentDoc, Refer-A-Fellow and Refer-A-MedStudent) in which you can make $200 if you refer someone to refinance, and your friend will make $200 cash upon approval. Additionally, if you refer 5 persons, you can make a bonus $500 cash.

We're the real deal, made in Cleveland and backed by Quicken Loans. We want to help medical professionals be able to focus on their career, family and life...not on the burden of student loan debt. We also have bank-grade security.

We recommend signing up on our email list to hear about our launch at https://www.gradschoolloans.com

If you're interested in the Refer-A-Friend program go to http://gradschoolloans.com/referafriend to sign up to hear more about it.

Of course if you have any questions at all, you can always email us at [email protected] and we'd be happy to help. Customer Experience is key for us.

 

[chichi52]

Quick question. When refinancing, are you typically locked in to a set payment schedule or can you pay back the loan as quickly as you would like?

 

[goodoldalky]

No penalty for prepayment

 

[bravotwozero]

Any lender charging a prepayment penalty would have to be NUTS imo. 'Yes, we will charge you for the privilege of paying back the money you OWE us'. If this is allowed it should be outlawed!


Sent from my iPhone using Tapatalk

 

[chichi52]

It sounds like a pretty good deal. I most likely won't be working for a non-profit and won't be doing the PSLF as I will be in the community.

 

[vengaaqui]

Just refinanced 113k for 4.75%, decreased to 4.5% with autopay. Seven years to repay, I wanted a fixed rate. Variable rate I was offered was 2.9% but didn't want to take my chances since I saw a private student loan increase steadily in the past that had a variable rate. 4.5% is still better than 6.8% and 8.125%! And, got the $300 credit from going through White Coat Investor's website. Hoping to pay it off much sooner than that using bonus pay each June after we get our emergency fund up further (New attending).

 

[chichi52]

Can anyone explain the downsides to doing this other than losing out on PSLF?

 

[goodoldalky]

Can anyone explain the downsides to doing this other than losing out on PSLF?

Your monthly payment will be higher than IBR and non negotiable if your salary decreases other than that no downsides. 3.25% five year fixed from DRB for me. It's a no brainer imo.

 

[ERdude007]

Hey all, regular SDN lurker here but 1st time poster. I'll be graduating medical school in May and starting EM residency this July (fingers crossed). I will be graduating with a significant amount of debt (roughly $220,000 federal loans going back to 2007 for undergrad and roughly $50,000 high interest private loans). I want to make the best decisions to repay this monster as I feel like small decisions may make millions of dollars difference. I should note I am unsure as to whether I want to stay in academics or go into the community after residency.

The way I see it, I have 3 options:
1) sign up for IBR or PAYE (or would I only be eligible for REPAYE?) working in public hospital and make 10 years of payments with the rest forgiven by PSLF
2) sign up for IBR or PAYE and go out into the community where I would potentially make more money and pay off the loans over 20ish years
3) consolidate all my loans into one with a low interest rate and low payment over 20-30 years, and use my discretionary income to invest in more lucrative options

Due to the fact that I have sooooo much federal debt, I feel like it may be in my best interest to opt for the PSLF, however is this misguided? Very much looking forward to everyone's opinions on this matter. (also is this more of a decision for when I am about to graduate residency? or best to decide now?)

 

[da8s0859q]

A few observations:

- Most do community or one of these quasi-academic settings where pay is more on par with that in the community (I signed with such a group), so there's that.
- I don't know nearly enough about IBR as I elected to not pursue this for my own situation, and PAYE didn't really apply to me with what I was looking at going through residency, so I can't speak too intelligently there.
- I've been considering refinancing as discussed here -- hopefully WCI or others who have done this or know more will chime in. Possibly an option for you.

(By the way, $220k does not equal "sooooo much federal debt" -- I've seen far worse. Especially for someone entering a specialty with a relatively high salary floor.)

 

[shoal]

If you refinance at the start of residency you'll be taking the least risk but perhaps paying an extra 15 to 30k in interest if PSLF pays our for you. If you do the standard repayment on IBR it'll cost you at least another 60 to 80k over pslf

Option 1
PSLF
base

Option 2
Refinance now
15-30k more

Option 3
Refinance after residency
60k extra

Option 4
Ibr for the life of the loan
120k more

These numbers are very rough based on current interest rates and my experience. I opted for pslf, but if I was going into residency id refinance then, way less risk and allows you to work for someone that is not a 503c1

Sent from my VS986 using Tapatalk

 

[jgauger]

Hey all, regular SDN lurker here but 1st time poster. I'll be graduating medical school in May and starting EM residency this July (fingers crossed). I will be graduating with a significant amount of debt (roughly $220,000 federal loans going back to 2007 for undergrad and roughly $50,000 high interest private loans). I want to make the best decisions to repay this monster as I feel like small decisions may make millions of dollars difference. I should note I am unsure as to whether I want to stay in academics or go into the community after residency.

The way I see it, I have 3 options:
1) sign up for IBR or PAYE (or would I only be eligible for REPAYE?) working in public hospital and make 10 years of payments with the rest forgiven by PSLF
2) sign up for IBR or PAYE and go out into the community where I would potentially make more money and pay off the loans over 20ish years
3) consolidate all my loans into one with a low interest rate and low payment over 20-30 years, and use my discretionary income to invest in more lucrative options

Due to the fact that I have sooooo much federal debt, I feel like it may be in my best interest to opt for the PSLF, however is this misguided? Very much looking forward to everyone's opinions on this matter. (also is this more of a decision for when I am about to graduate residency? or best to decide now?)

WCI has written a lot of great posts about student loans and pay back. Here is a link to his post from today: http://whitecoatinvestor.com/what-should-i-do-with-my-student-loans/. That's probably the best place to find good information.

No matter what you choose though, paying them off over 20ish-30 years is probably a bad idea.

 

[goodoldalky]

The way I see it, I have 3 options:
1) sign up for IBR or PAYE (or would I only be eligible for REPAYE?) working in public hospital and make 10 years of payments with the rest forgiven by PSLF

I dislike this idea for three reasons: 1. Generally these jobs pay you less than the alternative. 2. You have 50K in high interest private loans that are your first priority. 3. PSLF for high income professionals is going to go up in a puff of smoke (my opinion). This program will not be maintained for physicians. Leaving you holding the bag after making decisions banking on it and then it goes away.

2) sign up for IBR or PAYE and go out into the community where I would potentially make more money and pay off the loans over 20ish years

Terrible idea. 20ish years? What is wrong with you? 20 years?

3) consolidate all my loans into one with a low interest rate and low payment over 20-30 years, and use my discretionary income to invest in more lucrative options

Dear lord. 20 - 30 years? Don't take this the wrong way, but what are you thinking?

Here's the right answer:

1. Take a well-paying job that you like. Don't rule out community gigs. Don't work at some academic place for peanuts either.

2. Pay off the 50K high interest loan in the first 6-9 months.

3. Refinance your 220K federal loan at a 5 year fixed rate, and pay that off. (Depending on your take home pay you may have to keep your 220K federal on IBR and pay off the private loan first, then refinance once you are done with the 50K private loan, but the punchline is do this quickly). Do not refinance your high interest 50K loan into the 220K as it is likely to screw up your interest rate which otherwise should be around 3-4%. Get rid of it as quick as possible.

4. Done in about 5 years.

Space this out to 20-30 years and it will bleed you dry. You can't "invest in more lucrative options" and let these things fester, particularly not at whatever "high rate" you have them at. I know, you're doing the math, and going, "WTF, you want me to put that much money into my loans every month?" And the answer is YES. And you are saying, "WTF, how am I going to buy an M5, and a big house with a pool when I get done," and I'm saying, "You're not going to buy that until you pay some of this s$%& off." I've got a partner who's almost 10 years out and STILL sitting on 200K of debt because she bought too much other crap and never made it a priority to pay it off and now she's working more than she wants to because she can't afford to live without it.

By no means am I a "never have any debt under any circumstances" kind of guy but your idea to approach these as 20-30 year payoffs is terrible. IMO. There is one right answer and I gave it to you. Good luck!

 

[ERdude007]

I dislike this idea for three reasons: 1. Generally these jobs pay you less than the alternative. 2. You have 50K in high interest private loans that are your first priority. 3. PSLF for high income professionals is going to go up in a puff of smoke (my opinion). This program will not be maintained for physicians. Leaving you holding the bag after making decisions banking on it and then it goes away.

Terrible idea. 20ish years? What is wrong with you? 20 years?

Dear lord. 20 - 30 years? Don't take this the wrong way, but what are you thinking?

Here's the right answer:

1. Take a well-paying job that you like. Don't rule out community gigs. Don't work at some academic place for peanuts either.

2. Pay off the 50K high interest loan in the first 6-9 months.

3. Refinance your 220K federal loan at a 5 year fixed rate, and pay that off. (Depending on your take home pay you may have to keep your 220K federal on IBR and pay off the private loan first, then refinance once you are done with the 50K private loan, but the punchline is do this quickly). Do not refinance your high interest 50K loan into the 220K as it is likely to screw up your interest rate which otherwise should be around 3-4%. Get rid of it as quick as possible.

4. Done in about 5 years.

Space this out to 20-30 years and it will bleed you dry. You can't "invest in more lucrative options" and let these things fester, particularly not at whatever "high rate" you have them at. I know, you're doing the math, and going, "WTF, you want me to put that much money into my loans every month?" And the answer is YES. And you are saying, "WTF, how am I going to buy an M5, and a big house with a pool when I get done," and I'm saying, "You're not going to buy that until you pay some of this s$%& off." I've got a partner who's almost 10 years out and STILL sitting on 200K of debt because she bought too much other crap and never made it a priority to pay it off and now she's working more than she wants to because she can't afford to live without it.

By no means am I a "never have any debt under any circumstances" kind of guy but your idea to approach these as 20-30 year payoffs is terrible. IMO. There is one right answer and I gave it to you. Good luck!

Thank you! I appreciate the advice. In no way am I looking at "buying big house with pool etc." when I'm done. I just want to make the most financially sound decision. I originally believed that paying loans down aggressively made the most sense, however I've worked with several attendings who have given me the opposite advice. They told me that if I were to pay the loans off (public I assume not private) as slow as I could and use my discretionary income that would've gone to those loans instead to invest, I would come out on top. That's where I got the idea from! Seems like the majority here disagree with that however.

 

[JMC2010]

I couldn't agree more with goodoldalky. I even like the way he delivered it. Do exactly what he says.

Me. 270K loans coming out of residency. Read everything WCI wrote on his site. Took community job. Fully fund retirement accounts then as much as possible to loans. Currently that is $6300/month. Dumped some bonuses into loans and I'm down to 88K total in loans after 2.5 years. Will be paid off in about a year hopefully.

Haven't had to live completely like a resident either. My wife and I have a modest house (this is crucial). We go on incredible vacations twice a year. Eat out more than we should. I may have slipped a little and bought a tesla when I got a raise...but it's good for the world and it makes me smile and it will also be paid off in ten months.

Bottom line: create a five year or less loan- pay-off plan. Forget this whole ten or twenty year garbage.

Good luck!

 

[chichi52]

To follow-up, 160k loans and graduating. ~$1000 paye payments maybe pushing it, but doable for me. Would you recommend just paying that bigger $1000 or pay the smaller ibr payment and have the cushion of a little more discretionary income?

 

[goodoldalky]

As a resident I would recommend paying whatever you can. This coming from someone who payed only the IBR minimum while in residency. If you can actually pay 1K a month as a resident that would be outstanding and will save you some cash in the long run. You can also send additional payments in at your discretion when you have extra cash laying around.

 

[The White Coat Investor]

Hey all, regular SDN lurker here but 1st time poster. I'll be graduating medical school in May and starting EM residency this July (fingers crossed). I will be graduating with a significant amount of debt (roughly $220,000 federal loans going back to 2007 for undergrad and roughly $50,000 high interest private loans). I want to make the best decisions to repay this monster as I feel like small decisions may make millions of dollars difference. I should note I am unsure as to whether I want to stay in academics or go into the community after residency.

The way I see it, I have 3 options:
1) sign up for IBR or PAYE (or would I only be eligible for REPAYE?) working in public hospital and make 10 years of payments with the rest forgiven by PSLF
2) sign up for IBR or PAYE and go out into the community where I would potentially make more money and pay off the loans over 20ish years
3) consolidate all my loans into one with a low interest rate and low payment over 20-30 years, and use my discretionary income to invest in more lucrative options

Due to the fact that I have sooooo much federal debt, I feel like it may be in my best interest to opt for the PSLF, however is this misguided? Very much looking forward to everyone's opinions on this matter. (also is this more of a decision for when I am about to graduate residency? or best to decide now?)

Welcome to SDN. Thanks for jumping in. While sometimes the advice is quite frank, you'll soon have a very thick skin due to your chosen specialty anyway! Here's some advice:

1) Remember you are the poorest person on the planet. A broke person has a net worth of $0. You are $220K worse than broke. Live like it. It's going to take a while to dig out of this, but you can do it as many others have before you. In many ways, EM is in its golden years. We're getting paid very, very well compared to the rest of the house of medicine given the amount of hours we work (even with the Birdstrike adjustment) and the length of our training.
2) Refinance the private loans. Might as well. They're not going to be forgiven.
3) Go into RePAYE with the federal loans. This way you get your interest partially subsidized during residency and you're still eligible for PSLF if you go academic.
4) If you don't go academic, refinance your loans upon residency graduation. If you do go academic, think about going into IBR or PAYE upon graduation.
5) Under no circumstances should you owe student loans more than 7 years after residency. Ideally, you're out of debt in 2, but if you go for PSLF you'll have to have it for 7. I'm not blowing smoke here. If I were coming out of residency today owing $220K I would pay off that debt in 2 years. 3 at the most. Then I would enjoy the good life. I had to carry my debt for 4 years because Uncle Sam wouldn't let me out of it any earlier. I see no reason you should owe anyone for longer than military docs owe Uncle Sam. It's not like you're a dentist or a pediatrician owing $450K and making $120-200K. You'll be making $200-400K. Even if you live off half of it (an awesome income) you can still get out of debt very, very quickly with appropriate focus and lifestyle.

 

[ERdude007]

Welcome to SDN. Thanks for jumping in. While sometimes the advice is quite frank, you'll soon have a very thick skin due to your chosen specialty anyway! Here's some advice:

1) Remember you are the poorest person on the planet. A broke person has a net worth of $0. You are $220K worse than broke. Live like it. It's going to take a while to dig out of this, but you can do it as many others have before you. In many ways, EM is in its golden years. We're getting paid very, very well compared to the rest of the house of medicine given the amount of hours we work (even with the Birdstrike adjustment) and the length of our training.
2) Refinance the private loans. Might as well. They're not going to be forgiven.
3) Go into RePAYE with the federal loans. This way you get your interest partially subsidized during residency and you're still eligible for PSLF if you go academic.
4) If you don't go academic, refinance your loans upon residency graduation. If you do go academic, think about going into IBR or PAYE upon graduation.
5) Under no circumstances should you owe student loans more than 7 years after residency. Ideally, you're out of debt in 2, but if you go for PSLF you'll have to have it for 7. I'm not blowing smoke here. If I were coming out of residency today owing $220K I would pay off that debt in 2 years. 3 at the most. Then I would enjoy the good life. I had to carry my debt for 4 years because Uncle Sam wouldn't let me out of it any earlier. I see no reason you should owe anyone for longer than military docs owe Uncle Sam. It's not like you're a dentist or a pediatrician owing $450K and making $120-200K. You'll be making $200-400K. Even if you live off half of it (an awesome income) you can still get out of debt very, very quickly with appropriate focus and lifestyle.

Thanks for the tips WCI!

 

[pherms]

Thanks for the great advice. Would you recommend the same course of action for me? I am also toying with the idea of refinancing as soon as (crossing fingers) I match but I'm also pretty convinced I'd like an academic job and may be able to take advantage of loan forgiveness programs. Here's my breakdown:

Stafford loans from Med school: $130k (principal was $118k)
Undergrad loans: $18k remaining. Consolidated years ago at 4.75% and have been in deferment for all of med school. I'll have to start repayment the minute I graduate in May.
Institutional: $25k in institutional loans with high rates of 5-7% but have been/will be interest subsidized for 3 years of residency. Not eligible for consolidation though.

I was thinking it makes sense to defer the subsidized institutional loans until my 4th year of residency and try to pay them off as quickly as possible once the interest subsidy stops. Maybe refinance them at that point?
However, since $130 in federal seems like a lot lower than many of my colleagues, I'm not sure it makes sense to wait and try to benefit from loan forgiveness, in which case I think I'd like to try and refi ASAP to save the most money. The other caveat is that I'll be married and my spouse will have a salary as well (although, probably only $40-$70k a year) so we may be able to afford monthly payments on a refinanced loan during residency.

Any advice/thoughts would be much appreciated. Thank you!

 

[The White Coat Investor]

Thanks for the great advice. Would you recommend the same course of action for me? I am also toying with the idea of refinancing as soon as (crossing fingers) I match but I'm also pretty convinced I'd like an academic job and may be able to take advantage of loan forgiveness programs. Here's my breakdown:

Stafford loans from Med school: $130k (principal was $118k)
Undergrad loans: $18k remaining. Consolidated years ago at 4.75% and have been in deferment for all of med school. I'll have to start repayment the minute I graduate in May.
Institutional: $25k in institutional loans with high rates of 5-7% but have been/will be interest subsidized for 3 years of residency. Not eligible for consolidation though.

I was thinking it makes sense to defer the subsidized institutional loans until my 4th year of residency and try to pay them off as quickly as possible once the interest subsidy stops. Maybe refinance them at that point?
However, since $130 in federal seems like a lot lower than many of my colleagues, I'm not sure it makes sense to wait and try to benefit from loan forgiveness, in which case I think I'd like to try and refi ASAP to save the most money. The other caveat is that I'll be married and my spouse will have a salary as well (although, probably only $40-$70k a year) so we may be able to afford monthly payments on a refinanced loan during residency.

Any advice/thoughts would be much appreciated. Thank you!

I don't know what "institutional" loans means, but if they are private/non-federal loans, then they won't be forgiven, so you might as well refinance them and get busy paying them off. Since you think you're going to be academic, then the usual pathway is RePAYE or PAYE (if spouse working) ---> PSLF with the federal loans. Obviously, if the interest is all subsidized then you don't need to touch the loans until the interest is no longer subsidized. The amount doesn't change the equation. Yes, you'll have less forgiven because you owe less, but proportionally, it'll still be the same percentage forgiven after 7 years as an attending. If you change your mind and go private practice, refinance at that point and pay them off. Either way, control your lifestyle and at least save up a side fund in case PSLF goes away or is limited.

 

[chichi52]

Could someone please explain RePayee vs Payee? I have a working spouse. I looked up some comparisons, but they seem pretty similar to me. Thanks.

 

[jgauger]

Could someone please explain RePayee vs Payee? I have a working spouse. I looked up some comparisons, but they seem pretty similar to me. Thanks.

The big differences are 1: RePaye offers 50% interest subsidy above what your payment covers and 2: You cannot exclude spousal income from payment calculation by filing taxes separately.

 

[gogodre]

Also paye is only for people who don't have federal loans from before 2007. I'm in the situation of having a fiancé who makes 80k and fed loans dating to 2006. Paye isn't an option and repaye would have high monthly payments. We're thinking of just refinancing before residency since I have no desire to do academics. I have yet to actually run the numbers though.

 

[chichi52]

The big differences are 1: RePaye offers 50% interest subsidy above what your payment covers and 2: You cannot exclude spousal income from payment calculation by filing taxes separately.

Ah thanks, so you're essentially just saving on interest and paying a bit more each month due to having spousal income.

 

[bonedrone14]

Just a quick question that's been answered to varying degrees in other threads, but I'm still looking for a little clarification. I'm graduating med school this may, and will have 186,000 in principle and 20k in interest. I'm going into psych, so 4 year residency, and am thinking it's likely i'll end up doing a fellowship, so 5 years altogether. I'm leaning right now towards refinancing and aggressively paying down my loans vs going for PSLF, as I really just have an uneasy feeling regarding the program's sustained existence in the current environment, let alone 10 years down the road.

So anyway, I've seen some people talk about waiting to refinance until residency graduation as you'll likely get a better rate. I've got 40k at 6.8, about 15k at 5, and then the rest at 5.4. So I'm mulling over just applying for refinancing and seeing what rate they'll give me, if it'll cut down on the interest I'll accrue during residency until I can really start making a dent in the loans. It seems a little risky to me to go with a variable rate, since I'll have the loan for ~10yrs. Any thoughts on that? And now that I'm typing all of this out...maybe it seems like keeping the loans federal until I graduate may be better for the better rate at that point, vs shaving off maybe 1% right now. Sorry for the rambling. This is all feeling a little overwhelming.

 

[jgauger]

Just a quick question that's been answered to varying degrees in other threads, but I'm still looking for a little clarification. I'm graduating med school this may, and will have 186,000 in principle and 20k in interest. I'm going into psych, so 4 year residency, and am thinking it's likely i'll end up doing a fellowship, so 5 years altogether. I'm leaning right now towards refinancing and aggressively paying down my loans vs going for PSLF, as I really just have an uneasy feeling regarding the program's sustained existence in the current environment, let alone 10 years down the road.

So anyway, I've seen some people talk about waiting to refinance until residency graduation as you'll likely get a better rate. I've got 40k at 6.8, about 15k at 5, and then the rest at 5.4. So I'm mulling over just applying for refinancing and seeing what rate they'll give me, if it'll cut down on the interest I'll accrue during residency until I can really start making a dent in the loans. It seems a little risky to me to go with a variable rate, since I'll have the loan for ~10yrs. Any thoughts on that? And now that I'm typing all of this out...maybe it seems like keeping the loans federal until I graduate may be better for the better rate at that point, vs shaving off maybe 1% right now. Sorry for the rambling. This is all feeling a little overwhelming.

Don't forget that RePAYE offers an interest subsidy as well, so you're rate will likely be lower in RePAYE than refinancing now anyways.