Choosing an Osteopathic Medical School

[DoctorSynthesis]

Hey so a lot of people have been asking recently should I go to school x or school y. I made this thread so people can just ask here.

Also I'm gonna write up a quick guide if anyone wants to add to it please post here and I will edit the original post.

Factors to consider:

Cost: this I'm putting first and foremost. Please realize you will be paying back your loans one day. If you have the opportunity to go to your state DO school and it will cost less for you that is an excellent opportunity for you.

Location: having a support system or going somewhere in the middle of nowhere might not be appealing for you. It might be hard to travel back home if you go far away. So please pick a school close by if possible.

Curriculum: certain schools teach differently. Is it PBL systems based a mix or something else. Try to pick a school that has a curriculum that best fits your learning style.

Attendance/grading: is it required? Pass fail grading system?

Resources: are there online lectures or notes. What is available to you as a student.

Clinical education: where do students do rotations? Is it at teaching hospitals with residents?

Other factors: anything stand out? (For example oucom contract is something that might stand out) or maybe if you're interested in research and that school is involved with it. That might stand out.

Things to ignore

Match lists: I say look at them but as pointed out by wiser sdn members it is hard to interpret them.

How pretty a school is: this isn't important please don't let it sway you. For example lucom may be pretty but that's a bad reason to go there if you don't fit their idealogy and mission.

But most of all this thread is just to ask people for advice on schools you are looking at.

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[Accio]

Thanks for the guide on choosing! I'm having a difficult time choosing between MU-COM, NYITCOM and UNECOM. I'm in CT!

 

[DoctorSynthesis]

Thanks for the guide on choosing! I'm having a difficult time choosing between MU-COM, NYITCOM and UNECOM. I'm in CT!

To be clear this read really isn't meant to be a guide to follow on its on that would be silly. You shouldn't follow a guide to pick your school. Just pointing out things to consider and was hoping others would add on. Also was hoping people could use this to talk to others about their options!

Congrats on your success BTW. @Mad Jack is a unecom student he could help you maybe! NYIT com is a good program also but expensive. If I was you I would Axe mucom. Its well respected here but its far for you and its a newer program. Good luck!

 

[Mad Jack]

Thanks for the guide on choosing! I'm having a difficult time choosing between MU-COM, NYITCOM and UNECOM. I'm in CT!

I picked UNECOM and I'm from Southern New England. It all depends on whether you want a New England-y educational environment or a New York-y experience. NYIT has a much more extensive OPTI, so if you're looking into some of the more competitive specialties that are featured in their OPTI, you might want to weigh that as well.

 

[AlbinoHawk DO]

Thanks for the guide on choosing! I'm having a difficult time choosing between MU-COM, NYITCOM and UNECOM. I'm in CT!

NYIT has a high attrition rate. I wouldn't even consider them. While MUCOM sounds good on paper, they haven't had a class enter rotations or matched. UNECOM is the best investment, imo.

 

[DoctorSynthesis]

NYIT has a high attrition rate. I wouldn't even consider them. While MUCOM sounds good on paper, they haven't had a class enter rotations or matched. UNECOM is the best investment, imo.

I don't believe NYIT has those issues anymore. Every resident/doctor I talk to from there (about 10 or so) doesn't think its a concern. I think there is a NYIT student here I will find them and I will tag them! @kingbob128 is a NYIT student I believe. I'm interviewing at NYIT also @Accio and its at the top of my list!

 

[kingbob128]

Yeah the attrition thing isnt a problem. you'll be fine if you do ure work. i think we had 7-8 kids out of 300+ fail the first block

 

[DocEspana]

Hey so a lot of people have been asking recently should I go to school x or school y. I made this thread so people can just ask here.

Also I'm gonna write up a quick guide if anyone wants to add to it please post here and I will edit the original post.

Factors to consider:

Cost: this I'm putting first and foremost. Please realize you will be paying back your loans one day. If you have the opportunity to go to your state DO school and it will cost less for you that is an excellent opportunity for you.
.

Want to throw this out there: While cost is important, we are all idiots for thinking its as important as we always do. As a student I had enough common sense to know it cant possibly be as bad as we think it is. It just cant be. I was right, but I didnt know why I was right. So let me preface this by saying that everything I am going to say here is based on what is available RIGHT NOW and may very well change at some point. Also I want to point out that there has been discussions of cutting back on some of the programs discussed, these discussions were shot down in congress, but they were discussed. And finally I want to mention that when these things were being disucssed the education department updated their website to acknowledge that 1) They view the master promissory note to be a binding contract that would not be invalidated by a program being ended and 2) that no one has ever ended a loan program and not allowed everyone on a certain program to reap 100% of the benefits outline in the program when it was started, they simply would not enroll new people into the program.

So what am I hinting at when I keep talking about a program? Its the federal "pay as you earn" loan repayment. All of your federal loans can be combined into one lump loan sum and put into this program. It allows you to pay 10% of your discretionary (note that term) income per year for 20 years until youve either payed your loan or 20 years has passed. ALSO if youre in the program and you are in a public service sector (anyone in residency or working full time as a hospital employee at any nonprofit hospital... about 98% are) you only need to go 10 years before you get 100% of your loan forgiven. So lets break it down for me.

I leave med school with 250,000 in debt (not totally true, but its a nice round number to work with).
I make $60,000 in my TRI program. Your first 6 months no payments need to be made. According to the federal government I made $0 the prior year, so I pay $0 for all of the first 6 months AND zero dollars for the next 12 months.
I make $60,000 per year for my three years of residency in ER. My PGY-I year according to the federal government, I made $30,000 (since I only worked july-december that year). Disposable income is income minus taxes, so functionally I am working with $15,000. So I owe $125 per month for a year. The next two years I pay $250 per month (since it would be 60K per year and $30k disposable once my tax statements catch up with my actual income)
I have no worked for 4 full year and paid $7,500 towards my debt.
Fifth year I make $200,000 as an attending employed by a hospital. My statement still states that I only made $60,000 last year so my payments are still $250. So at 5 years of payments I've put 10,500 towards my debt.
Lets say my income doesnt change. At $200,000 I'm looking at, functionally $10,000 per year put towards my debt. So in 5 years I've put $60,500 towards my debt.

Given how inflation works, my debt is about $350,000 by 10 years out and I've paid $60,500 of it. So my functional debt is $289,500. The government forgives my entire debt of $289,500. This is something the government is aware happens and really only happens with medical graduates because of our 1) comical debt and 2) incredibly low income to high debt ratio for multiple years as a resident. Any other field that would take this loan would probably end up paying the government more money by stretching out their repayments long enough for payments to overtake the principle. Since its the government's money they arent that bothered if they dont reclaim all of the interest, as long as they get back more than the principle. Well on physicians they lose out on the principle, and they are aware and (tacitly) okay with it.

Even if I didnt qualify for the PSLF program, I would still be saving a buttload of money (paying a total of about $160,000 on $250,000 worth of original debt) at 20 years out.

Prior to debt getting so ridiculous it was easy to repay yourdebt with the attending salary. Now that it is so crazy high, it almost doesnt matter where you go, except maybe LECOM, because your debt will be comical and youll have to use this program. Andwith this program it is irrelevant what your debt is... your repayment is contingent on your income and your ability to qualify for public service work, which around half of us will as attendings.

 

[IslandStyle808]

Want to throw this out there: While cost is important, we are all idiots for thinking its as important as we always do. As a student I had enough common sense to know it cant possibly be as bad as we think it is. It just cant be. I was right, but I didnt know why I was right. So let me preface this by saying that everything I am going to say here is based on what is available RIGHT NOW and may very well change at some point. Also I want to point out that there has been discussions of cutting back on some of the programs discussed, these discussions were shot down in congress, but they were discussed. And finally I want to mention that when these things were being disucssed the education department updated their website to acknowledge that 1) They view the master promissory note to be a binding contract that would not be invalidated by a program being ended and 2) that no one has ever ended a loan program and not allowed everyone on a certain program to reap 100% of the benefits outline in the program when it was started, they simply would not enroll new people into the program.

-------

Given how inflation works, my debt is about $350,000 by 10 years out and I've paid $60,500 of it. So my functional debt is $289,500. The government forgives my entire debt of $289,500. This is something the government is aware happens and really only happens with medical graduates because of our 1) comical debt and 2) incredibly low income to high debt ratio for multiple years as a resident. Any other field that would take this loan would probably end up paying the government more money by stretching out their repayments long enough for payments to overtake the principle. Since its the government's money they arent that bothered if they dont reclaim all of the interest, as long as they get back more than the principle. Well on physicians they lose out on the principle, and they are aware and (tacitly) okay with it.

Very true

I remember the stories from medical student and residents about the gloom and doom of possibly not having any of these programs in the future or even being dropped. Do you think that these programs will be dropped in the foreseeable future?

Also for the second bolded, you seem to be referring to the PSLF. I would think that working in a public hospital or clinic would have you qualified for the loan repayment plan. However, I remember a medical student on the forum stating if your work is contracted outside of the hospital, you don't qualify. What conditions does the hospital have to meet in order for one to qualify for the PLSF? It seems a little more complicated than just working in the public sector of the healthcare field.

Also there is the tax bomb to be considered after the 25 years in the IBR and 20 years under the PAYE. I have heard several ways to reduce the effect of the tax. I have also read that some medical students/residents will invest to have the money needed to pay this tax off. What are ways that you have heard of from other residents or former classmates from medical schools are thinking about to deal with the tax bomb?

 

[DocEspana]

Very true

I remember the stories from medical student and residents about the gloom and doom of possibly not having any of these programs in the future or even being dropped. Do you think that these programs will be dropped in the foreseeable future?

Also for the second bolded, you seem to be referring to the PSLF. I would think that working in a public hospital or clinic would have you qualified for the loan repayment plan. However, I remember a medical student on the forum stating if your work is contracted outside of the hospital, you don't qualify. What conditions does the hospital have to meet in order for one to qualify for the PLSF? It seems a little more complicated than just working in the public sector of the healthcare field.

Also there is the tax bomb to be considered after the 25 years in the IBR and 20 years under the PAYE. I have heard several ways to reduce the effect of the tax. I have also read that some medical students/residents will invest to have the money needed to pay this tax off. What are ways that you have heard of from other residents or former classmates from medical schools are thinking about to deal with the tax bomb?

So lets discuss a few of these points bit by bit.

1) I think eventually the program will be dropped, but not in the immediate future. And the education department has made it very clear that there is no precedent for a program like this to be retroactively stopped. So anyone who has been given it as an option in their master promissory note has it as an option and the government wont take it away. What I can 100% promise you is that if its there when you graduate, it'll be there in 10 years when you want your forgiveness. What i can more-or-less promise you is that if it is there the dya you take out your first loan, it will be there in 14 years when you want your forgiveness. There is at least one federal court case upholding that these government programs which come with contracts (the education department views the MPN as a contract stating what your options are before you take the money out), the federal government has to honor them. So it 100% will be honored. The only way to bone you over is if the government really wanted to get rid of the program they could say that only loan amounts taken out before they remove the program (since there is a new MPN each year, iirc) count towards fulfillment of the program. There is NO precedent for this, but it would be legally possible if the government really wanted to stick it to the medical students. But even still, that would put somewhere between 25 and 75% of your debt onto the program. But I doubt this would happen. And I cant stress this enough, the government cannot legally change the rules of PSLF or PAYE on you once you've entered it unless youre someone who believes the government is some evil supervillain who is not beholden to their own laws and that the federal courts are a sham.

2) 40% of all physicians are employed by a non-profit hospital (26% directly employed by the hospital, 14% work for a practice owned by the hospital). 37% of physicians work for a practice of which some are non-profit designed, it is more rare but it does happen in certain groups. Lets say that kicks the total percent up to 44 or 45% who would qualify. It does not need to be a public hospital or clinic. It simply needs to be a non-profit hospital or a not-for-profit group, of which nearly all hospitals are and a small number of groups are. Does that still exclude 50% of people? Yea it does. But when you break down the way that 44-45% of physicians into payment... the 44-45% is nearly all FPs, Peds, IM doctors (aka lesser paying fields) and the other people are almsot all the specialists and surgeons. Why is that relevant? Well two fold. 1) The people who probably wont qualify will be making enough money as an attending to not really sweat it if they decided to either pay out the 20 years or to just pay it in large sums over a few years and 2) the ones who wont qualify can spend A LOT of time in the PSLF program as residents and fellows and potentially only need to find a hospital employment for a few years before they can switch to "regular" employment and earn their full potential.

3) Please remember, there is no tax bomb with PSLF. That is true forgiveness, not repayment. So my suggestion is go ahead and do PSLF. If you cant qualify you'll be looking at paying ~10,000 in regular PAYE and then a tax amount of something like $50,000. But its a one time thing and given your forgiveness amount is in the hundreds of thousands you just prepare for it (after being an attending for just short of two decades im sure you'll be able to survive it). Treat it like buying a new car that is invisible and frees you from debt. As a senior attending physician that will be no big deal.

 

[Postictal Raiden]

So lets discuss a few of these points bit by bit.

1) I think eventually the program will be dropped, but not in the immediate future. And the education department has made it very clear that there is no precedent for a program like this to be retroactively stopped. So anyone who has been given it as an option in their master promissory note has it as an option and the government wont take it away. What I can 100% promise you is that if its there when you graduate, it'll be there in 10 years when you want your forgiveness. What i can more-or-less promise you is that if it is there the dya you take out your first loan, it will be there in 14 years when you want your forgiveness. There is at least one federal court case upholding that these government programs which come with contracts (the education department views the MPN as a contract stating what your options are before you take the money out), the federal government has to honor them. So it 100% will be honored. The only way to bone you over is if the government really wanted to get rid of the program they could say that only loan amounts taken out before they remove the program (since there is a new MPN each year, iirc) count towards fulfillment of the program. There is NO precedent for this, but it would be legally possible if the government really wanted to stick it to the medical students. But even still, that would put somewhere between 25 and 75% of your debt onto the program. But I doubt this would happen. And I cant stress this enough, the government cannot legally change the rules of PSLF or PAYE on you once you've entered it unless youre someone who believes the government is some evil supervillain who is not beholden to their own laws and that the federal courts are a sham.

2) 40% of all physicians are employed by a non-profit hospital (26% directly employed by the hospital, 14% work for a practice owned by the hospital). 37% of physicians work for a practice of which some are non-profit designed, it is more rare but it does happen in certain groups. Lets say that kicks the total percent up to 44 or 45% who would qualify. It does not need to be a public hospital or clinic. It simply needs to be a non-profit hospital or a not-for-profit group, of which nearly all hospitals are and a small number of groups are. Does that still exclude 50% of people? Yea it does. But when you break down the way that 44-45% of physicians into payment... the 44-45% is nearly all FPs, Peds, IM doctors (aka lesser paying fields) and the other people are almsot all the specialists and surgeons. Why is that relevant? Well two fold. 1) The people who probably wont qualify will be making enough money as an attending to not really sweat it if they decided to either pay out the 20 years or to just pay it in large sums over a few years and 2) the ones who wont qualify can spend A LOT of time in the PSLF program as residents and fellows and potentially only need to find a hospital employment for a few years before they can switch to "regular" employment and earn their full potential.

3) Please remember, there is no tax bomb with PSLF. That is true forgiveness, not repayment. So my suggestion is go ahead and do PSLF. If you cant qualify you'll be looking at paying ~10,000 in regular PAYE and then a tax amount of something like $50,000. But its a one time thing and given your forgiveness amount is in the hundreds of thousands you just prepare for it (after being an attending for just short of two decades im sure you'll be able to survive it). Treat it like buying a new car that is invisible and frees you from debt. As a senior attending physician that will be no big deal.

I really like your optimistic prospective on the topic and truly hope what you say holds true. However, many people on this forum keep saying that you would be naive to trust the government keeping up their word for two decades.

As someone who's projecting to have a higher than average debt, I am praying that these programs remain an option by the time I graduate and enter he repayment. On the other hand, it would be terrifying to see my principle debt continuously growing due to unpaid interests. Heck, I ran the numbers and it seems like that by the end of 20 year term, my debt would have grown to nearly double the amount I start with.

It's truly a very tricky situation. On one hand, I feel that I should do the responsible thing, continue living like a resident and toss most of my post-tax income toward the debt to pay it off ASAP. On the other hand, I don't want to subject myself and family to more financial stress, for the sake of paying off the loans, only to find out that I could have followed the herd and took advantage of these governmental programs.

I'm hoping that in the upcoming couple years we start seeing a clearer image of how PSLF and PAYE will play out. This will help us make more informed decisions on what to do with our debts and our lives.

 

[DocEspana]

All the government is, at its most basic, is an army to enforce contracts. Despite what people may incorrectly claim.... It always keeps its own contracts.

You get it in writing you're golden.

 

[DoctorSynthesis]

Want to throw this out there: While cost is important, we are all idiots for thinking its as important as we always do. As a student I had enough common sense to know it cant possibly be as bad as we think it is. It just cant be. I was right, but I didnt know why I was right. So let me preface this by saying that everything I am going to say here is based on what is available RIGHT NOW and may very well change at some point. Also I want to point out that there has been discussions of cutting back on some of the programs discussed, these discussions were shot down in congress, but they were discussed. And finally I want to mention that when these things were being disucssed the education department updated their website to acknowledge that 1) They view the master promissory note to be a binding contract that would not be invalidated by a program being ended and 2) that no one has ever ended a loan program and not allowed everyone on a certain program to reap 100% of the benefits outline in the program when it was started, they simply would not enroll new people into the program.

So what am I hinting at when I keep talking about a program? Its the federal "pay as you earn" loan repayment. All of your federal loans can be combined into one lump loan sum and put into this program. It allows you to pay 10% of your discretionary (note that term) income per year for 20 years until youve either payed your loan or 20 years has passed. ALSO if youre in the program and you are in a public service sector (anyone in residency or working full time as a hospital employee at any nonprofit hospital... about 98% are) you only need to go 10 years before you get 100% of your loan forgiven. So lets break it down for me.

I leave med school with 250,000 in debt (not totally true, but its a nice round number to work with).
I make $60,000 in my TRI program. Your first 6 months no payments need to be made. According to the federal government I made $0 the prior year, so I pay $0 for all of the first 6 months AND zero dollars for the next 12 months.
I make $60,000 per year for my three years of residency in ER. My PGY-I year according to the federal government, I made $30,000 (since I only worked july-december that year). Disposable income is income minus taxes, so functionally I am working with $15,000. So I owe $125 per month for a year. The next two years I pay $250 per month (since it would be 60K per year and $30k disposable once my tax statements catch up with my actual income)
I have no worked for 4 full year and paid $7,500 towards my debt.
Fifth year I make $200,000 as an attending employed by a hospital. My statement still states that I only made $60,000 last year so my payments are still $250. So at 5 years of payments I've put 10,500 towards my debt.
Lets say my income doesnt change. At $200,000 I'm looking at, functionally $10,000 per year put towards my debt. So in 5 years I've put $60,500 towards my debt.

Given how inflation works, my debt is about $350,000 by 10 years out and I've paid $60,500 of it. So my functional debt is $289,500. The government forgives my entire debt of $289,500. This is something the government is aware happens and really only happens with medical graduates because of our 1) comical debt and 2) incredibly low income to high debt ratio for multiple years as a resident. Any other field that would take this loan would probably end up paying the government more money by stretching out their repayments long enough for payments to overtake the principle. Since its the government's money they arent that bothered if they dont reclaim all of the interest, as long as they get back more than the principle. Well on physicians they lose out on the principle, and they are aware and (tacitly) okay with it.

Even if I didnt qualify for the PSLF program, I would still be saving a buttload of money (paying a total of about $160,000 on $250,000 worth of original debt) at 20 years out.

Prior to debt getting so ridiculous it was easy to repay yourdebt with the attending salary. Now that it is so crazy high, it almost doesnt matter where you go, except maybe LECOM, because your debt will be comical and youll have to use this program. Andwith this program it is irrelevant what your debt is... your repayment is contingent on your income and your ability to qualify for public service work, which around half of us will as attendings.

Thanks doc really interesting. I have heard of similar stuff before but I get really nervous about this stuff. I saw a video on YouTube about this. Is this similar to what you are saying?
:

Anyway thanks for the addition!

 

[DocEspana]

Thanks doc really interesting. I have heard of similar stuff before but I get really nervous about this stuff. I saw a video on YouTube about this. Is this similar to what you are saying?
:

Anyway thanks for the addition!

Yes except their is a new version better than income based repayment which is pay as you earn. It uses 10% of your disposable income. Plus this guy is missing out on some great tricks.like claiming your prior year income

 

[DocWinter]

Poor man's guide to choosing a school -

1) The one that chooses you.

It may be that simple for some people...many, many students each year don't get any interviews, let alone acceptances. You may only get one. And one is all you need.

 

[HuskyPride149]

So i may be a little off topic here from the very enlightening talk about government loan repayment programs and such, but I am a pre-med student, soon to be a first year med student (still in the process of learning about the whole journey) and wanted some more elaboration of match lists.

From my understanding, feel free to correct me if I'm not understanding correctly

Match lists applies to clinical rotation sites that occur during the 4th year sometimes the 3rd year correct?
The place that you do your clinicals during those two years does not play a part in where you would like to be for residency or even practice in the future. The only criteria for choosing a particular school is if they have a wide range of clinical sites, meaning more opportunities?
For example on the websites, UNECOM has less clinical sites than LECOM, the two schools I might be choosing between. Wouldn't it be better to go to a school that has more options?

Also does the place you do residency determine the area in which you will practice afterwards? Or can you just do residency and choose to practice anywhere you feel like living afterwards? What do most people do when they get out of residency?

I apologize if I sound "dumb" for not knowing the way things work, but I appreciate any help. Please enlighten me Thank You!

 

[Postictal Raiden]

Yes except their is a new version better than income based repayment which is pay as you earn. It uses 10% of your disposable income. Plus this guy is missing out on some great tricks.like claiming your prior year income

Yes, he also left out the tax bomb that we'd need to deal with at the end of our repayment term.

DocEspana, I have two questions for you since you seem to be knowledgable on the topic from the financial and most importantly, the political, aspects.

1. I have seen in your posts regarding how to calculate the annual repayment, and you always mention that the disposable income is determined after taking out the taxes, not before. Are you sure about this? I'm asking this because the loan repayment calculators I've seen online, including the AAMC one, use pre-tax salary.

2. My MPN doesn't explicitly that the remaining balance will be forgiven. All it says that it may be canceled after making making 120 payments. To me, this doesn't necessarily obligate the government to forgive anything. What do you think about that?

 

[67552931811]

Yes, he also left out the tax bomb that we'd need to deal with at the end of our repayment term.

DocEspana, I have two questions for you since you seem to be knowledgable on the topic from the financial and most importantly, the political, aspects.

1. I have seen in your posts regarding how to calculate the annual repayment, and you always mention that the disposable income is determined after taking out the taxes, not before. Are you sure about this? I'm asking this because the loan repayment calculators I've seen online, including the AAMC one, use pre-tax salary.

2. My MPN doesn't explicitly that the remaining balance will be forgiven. All it says that it may be canceled after making making 120 payments. To me, this doesn't necessarily obligate the government to forgive anything. What do you think about that?

Why don't you live like a resident for a few years as an attending and be done with the debt/ reduce it significantly?

 

[Postictal Raiden]

Why don't you live like a resident for a few years as an attending and be done with the debt/ reduce it significantly?

That is one option I'm considering, but why would I do that if the government is bailing everyone out?

 

[67552931811]

That is one option I'm considering, but why would I do that if the government is bailing everyone out?

Fair point. Personally, I would rather get rid of the debt, and be done with it, than letting my debt balloon over 20-25 years. For me, the freedom of no debt outweighs the hopes of the government bailing me out.

It was just some food for thought: I figured you had entertained this idea but I just wanted to bring it back up to the surface.

 

[Moose A Moose]

Poor man's guide to choosing a school -

1) The one that chooses you.

It may be that simple for some people...many, many students each year don't get any interviews, let alone acceptances. You may only get one. And one is all you need.

Das it, mayne.

 

[DocEspana]

Yes, he also left out the tax bomb that we'd need to deal with at the end of our repayment term.

I hate that term. But anyway, PSLF has no taxable income component so no "tax bomb" with that. Regular PAYE does view the forgiveness as taxable income. Ive been to lectures by financial advisers who basically say that there are ways to mitigate that (dividing it over time. not sure on the specifics), but that most people just treat it like a $50K pill you swallow after being an attending for 15 years to free yourself from debt.

DocEspana, I have two questions for you since you seem to be knowledgable on the topic from the financial and most importantly, the political, aspects.

1. I have seen in your posts regarding how to calculate the annual repayment, and you always mention that the disposable income is determined after taking out the taxes, not before. Are you sure about this? I'm asking this because the loan repayment calculators I've seen online, including the AAMC one, use pre-tax salary.

I'm on PSLF right now. I 100% assure you it is post-taxes. I dont think it accounts for state tax, but it does for all those federal deductions. I just refiled a month ago.

2. My MPN doesn't explicitly that the remaining balance will be forgiven. All it says that it may be canceled after making making 120 payments. To me, this doesn't necessarily obligate the government to forgive anything. What do you think about that?

This has been an active debate for a while by people who feel like they are legal scholars (including myself). so I defer to actual legal websites on the matter which basically point out that the education department flat out said they view the MPN as a contract promising that some form of the PSLF will be available to you. And that the current form is this 120 payment foregiveness. The only loophole the legal scholars on the issue state is possible is that if they change the PSLF then people who signed a MPN but havent yet enrolled COULD be offered a modified version. They address that changing the PSLF too significantly would invalidate the contract that sometihng PSLF-like will be available, so they cant change it too dramatically. AKA they could potentailly cap the forgiveness, but they cant expand the payment time to 15 years nor can they cap it to some tiny amount. Also there ar ecourt cases of the government cuting funding to contracted programs and the federal court has upheld that the government must honor its contracts to all eligible even if they intend to defund the program. So those with a MPN should be entiltled to enter the PSLF program (though this is contingent on precedent from previous cour cases) even if it was cancelled today.

 

[Postictal Raiden]

Fair point. Personally, I would rather get rid of the debt, and be done with it, than letting my debt balloon over 20-25 years. For me, the freedom of no debt outweighs the hopes of the government bailing me out.

It was just some food for thought: I figured you had entertained this idea but I just wanted to bring it back up to the surface.

agree with you wholeheartedly

 

[Postictal Raiden]

I hate that term. But anyway, PSLF has no taxable income component so no "tax bomb" with that. Regular PAYE does view the forgiveness as taxable income. Ive been to lectures by financial advisers who basically say that there are ways to mitigate that (dividing it over time. not sure on the specifics), but that most people just treat it like a $50K pill you swallow after being an attending for 15 years to free yourself from debt.

Where does that number, 50k, come from?

What I know, is that whatever amount you have forgiven is taxed as income. Therefore, if your forgiven amount, say, 300k, then the tax on that would be roughly 100k. Therefore it's totally dependent on how much of a debt you have left at the end of the repayment term. What am I missing here?

 

[DocEspana]

Where does that number, 50k, come from?

What I know, is that whatever amount you have forgiven is taxed as income. Therefore, if your forgiven amount, say, 300k, then the tax on that would be roughly 100k. Therefore it's totally dependent on how much of a debt you have left at the end of the repayment term. What am I missing here?

If its 300K the tax is about 67K. Tax rate on federal income is 22.6% +/- any deductions you can tack on.

I was doing it for 250K when I kept saying 50K pill to swallow. You have to figure you're making a dent in your total debt for quite a numbr of years if youre on PAYE (20 years to be specific of which >15 of them you;ve been paying heavily into it)... if you cant get it down to 250K or less i'd be jaw on the ground shocked.

 

[allantois]

(since it would be 60K per year and $30k disposable once my tax statements catch up with my actual income)

Are you saying here that you are paying 30K in taxes out of 60K resident income?

 

[Postictal Raiden]

If its 300K the tax is about 67K. Tax rate on federal income is 22.6% +/- any deductions you can tack on.

I was doing it for 250K when I kept saying 50K pill to swallow. You have to figure you're making a dent in your total debt for quite a numbr of years if youre on PAYE (20 years to be specific of which >15 of them you;ve been paying heavily into it)... if you cant get it down to 250K or less i'd be jaw on the ground shocked.

Hate to drop your jaw, but I'm looking at 400k+ debt. The interests on this amount will be 30k+ per year! which is higher than what my calculated PAYE amount will be like. This will cause my debt to keep on growing over the 20-year period.

Now you can see why we call it a tax "bomb", not a pill.

 

[DocEspana]

Are you saying here that you are paying 30K in taxes out of 60K resident income?

I live in NYC. That means I pay federal taxes, state taxes, and city taxes. They combine to be about 47% of my paycheck in taxes.

 

[67552931811]

If its 300K the tax is about 67K. Tax rate on federal income is 22.6% +/- any deductions you can tack on.

I was doing it for 250K when I kept saying 50K pill to swallow. You have to figure you're making a dent in your total debt for quite a numbr of years if youre on PAYE (20 years to be specific of which >15 of them you;ve been paying heavily into it)... if you cant get it down to 250K or less i'd be jaw on the ground shocked.

Serious question here: why wouldn't the tax on 300K be 33%???

 

[DocEspana]

Hate to drop your jaw, but I'm looking at 400k+ debt. The interests on this amount will be 30k+ per year! which is higher than what my calculated PAYE amount will be like. This will cause my debt to keep on growing over the 20-year period.

Now you can see why we call it a tax "bomb", not a pill.

so go into public service. PSLF isnt the only program, its just the newest. There are multiple loan forgiveness programs for physicians who work in the public sector, specificall Im thinking of the ones for underserved communites and primary care.

 

[DocEspana]

Serious question here: why wouldn't the tax on 300K be 33%???

Because its not. Federal income tax on this form of income is 22.6%

300,000 x .226 = 67,800

 

[67552931811]

Because its not. Federal income tax on this form of income is 22.6%

300,000 x .226 = 67,800

What do you mean by form? It's not capital gains so why wouldn't it be "ordinary income" (not trying to argue here)?

 

[DocEspana]

Hate to drop your jaw, but I'm looking at 400k+ debt. The interests on this amount will be 30k+ per year! which is higher than what my calculated PAYE amount will be like. This will cause my debt to keep on growing over the 20-year period.

Now you can see why we call it a tax "bomb", not a pill.

Let me add... even then. Even without any of the nicer programs. I dont get why paying less total money with a lot of it back-ended is somehow not preferable to paying much more total money and front loading it?

It would be different if your debt was low and knocking it all out was a possiblity. Youre never going to catch your debt, so just start saving for the tax burden of the forgiveness.

 

[Postictal Raiden]

so go into public service. PSLF isnt the only program, its just the newest. There are multiple loan forgiveness programs for physicians who work in the public sector, specificall Im thinking of the ones for underserved communites and primary care.

This is something I may consider if I choose to pursue PC medicine. Alternatively, I will either work my tail off while living like a resident for few years after residency and pay off the debt, or take a leap of faith on the governmental repayment plans.

 

[DocEspana]

What do you mean by form? It's not capital gains so why wouldn't it be "ordinary income" (not trying to argue here)?

Oh i see what your confusion is. The easiest way to explain it is that your exact tax burden does change based onw aht you made that year and what your final number of forgiveness is. but 22.4% is used by all the financial companies for some reason. I think tis because its considered almost a cash gift rather than an income? And 200K cash recepit becomes numbered down to the 28% tax bracket but thats marginal tax, not effective tax. Effective tax rate is 22.6%. But yea. It will change based on your actual forgiveness sicne there is bracketing.

 

[67552931811]

It is. ordinary income is 28% tax and most people (single filers, head of households, or married, AKA the three biggest categories) are automatically deducated 5.4% off,or more. Thus 22.6%, the number any financial planner will tell you is what to expect the tax burden to be.

I got ya. Not that it matters but the 28% bracket has a ceiling of ~230. But, I forgot to take into account deductions when I originally asked. At any rate, thanks doc!

 

[DocEspana]

I got ya. Not that it matters but the 28% bracket has a ceiling of ~230. But, I forgot to take into account deductions when I originally asked. At any rate, thanks doc!

Yea. I edited my answer a bit when I went and grabbed one of the folders I got from the financial planners. Same basic idea, but I wanted to give a more accurate answer since I had some innacuracy in how i described it initially.

 

[AlteredScale]

Woooph, all this finance talk has be all flustered.

 

[Dullhead]

Because its not. Federal income tax on this form of income is 22.6%
300,000 x .226 = 67,800

Please pardon my ignorance - is this 300K "income" or forgiveness exempt from SS, Medicare, and state taxes? 6.2% SS capped at 117K pre-tax, 1.45% Medicare, and let's assume 5% state, (for an approximate total of 22+6+1+5 = 34% +/-)?

 

[DocEspana]

Please pardon my ignorance - is this 300K "income" or forgiveness exempt from SS, Medicare, and state taxes? 6.2% SS capped at 117K pre-tax, 1.45% Medicare, and let's assume 5% state, (for an approximate total of 22+6+1+5 = 34% +/-)?

Correct. Its simply income you place on your federal filing, as if it were a large cash gift (since cash gifts above a certain amount are considered income). Its exempt from all that other stuff.