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dental school loan deferment/forbearance

sugar4590

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Nov 18, 2019
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    for hospital based GPR, does anyone know how I can alert my loan provider that I will be doing a residency and would like loan forbearance? thanks for the help in advance
     
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    allDAT

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      Don't do forbearance. Just enter income-driven repayment. If you made $0 last year, your payment will be $0/month. If you're in REPAYE, the government will cover half your interest .... which is 0% right now so it's nothing but your $0 monthly payments will count towards forgiveness and...ironically will have a positive impact on your credit score which may help you buy a practice if that's your plan after the GPR.
       
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      allDAT

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        awesome thanks! and what about deferment is that something i should consider or is that not an option for a hospital based GPR?

        You don’t need to defer your loans. You should take advantage of the low payments you’ll have and the interest subsidy you’ll get from REPAYE. I don’t know your numbers, but in general, most people will benefit from starting payments while in residency and those payments may qualify towards PSLF depending on where you’re going to be working. You’re welcome to share your numbers here and maybe I (and others) can offer more advice.

        You can use these free resources to get a better understanding of dental student loans:

        20 days of emails: Understanding Dental Student Debt

        Here’s a course (free until the end of 2020 due to COVID): Student Loan Repayment Strategies for Dentists
         
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        Sl1d3r

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          I have similar question about deferment vs REPAYE. I have a spouse who works part time so our tax return for last year is probably for about 10-15k of income. My dental school debt is low but will be attending an orthodontic residency for 2.5 years. Would it be smarter to enroll in REPAYE now but might have a monthly payment due to my spouses income from last year or possibly defer until I’m done with the residency?
           

          LaughingGas

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            I have similar question about deferment vs REPAYE. I have a spouse who works part time so our tax return for last year is probably for about 10-15k of income. My dental school debt is low but will be attending an orthodontic residency for 2.5 years. Would it be smarter to enroll in REPAYE now but might have a monthly payment due to my spouses income from last year or possibly defer until I’m done with the residency?
            From what I understand, it's always better to be on REPAYE than deferment. When you are in deferment, you don't have that monthly payment, but after the deferment period ends, your monthly rate possibly become higher + longer because you extended the timeline for your loan repayment = at the end you end up paying more.
             

            Sl1d3r

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              How does it work with enrolling in REPAYE with your current loans and then taking out more loans for a residency? After each quarter is my REPAYE being readjusted to the new loan balance or am I just paying the current amount off my undergrad dental loan amount?
               

              allDAT

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                I have similar question about deferment vs REPAYE. I have a spouse who works part time so our tax return for last year is probably for about 10-15k of income. My dental school debt is low but will be attending an orthodontic residency for 2.5 years. Would it be smarter to enroll in REPAYE now but might have a monthly payment due to my spouses income from last year or possibly defer until I’m done with the residency?

                You won’t be able to enter REPAYE (or any other income driven repayment plan) if you’re a full-time student using direct loans to pay for school. You’ll be in academic forbearance [edit] in-school deferment.

                The OP is going to be in a hospital based GPR - most of these are full time positions where the resident is an employee of the hospital and receives a stipend.
                 
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                batman12345

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                  You won’t be able to enter REPAYE (or any other income driven repayment plan) if you’re a full-time student using direct loans to pay for school. You’ll be in academic forbearance.

                  The OP is going to be in a hospital based GPR - most of these are full time positions where the resident is an employee of the hospital and receives a stipend.
                  Is this confirmed? I've heard stories from students that you can waive your in school deferment status and enroll in REPAYE during school...
                   

                  allDAT

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                    Is this confirmed? I've heard stories from students that you can waive your in school deferment status and enroll in REPAYE during school...


                    Image 2020-05-19 at 11.36.12 PM.png


                    You have to enter repayment to enroll in any of the IDR Plans. You can't enter an IDR plan while enrolled full-time - you have to either drop-out or graduate for dental school/residency purposed (there's no below half-time status). See the green highlight in the image above. Nothing is stopping a student from making payments while in school, they just don't count towards any of the IDR plans. Allowing a student to enter REPAYE would be a huge loophole and every student would take advantage of it because it would turn unsubsidized direct loans into partially subsidized direct loans via REPAYE's interest subsidy. Entering PAYE/IBR wouldn't have as much of a benefit but it would shave a few years off of one's path to taxable forgiveness on some of the loans (assuming the borrower didn't consolidate after graduation). Never-the-less, using IDR while enrolled isn't an option.
                     

                    batman12345

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                      View attachment 306910

                      You have to enter repayment to enroll in any of the IDR Plans. You can't enter an IDR plan while enrolled full-time - you have to either drop-out or graduate for dental school/residency purposed (there's no below half-time status). See the green highlight in the image above. Nothing is stopping a student from making payments while in school, they just don't count towards any of the IDR plans. Allowing a student to enter REPAYE would be a huge loophole and every student would take advantage of it because it would turn unsubsidized direct loans into partially subsidized direct loans via REPAYE's interest subsidy. Entering PAYE/IBR wouldn't have as much of a benefit but it would shave a few years off of one's path to taxable forgiveness on some of the loans (assuming the borrower didn't consolidate after graduation). Never-the-less, using IDR while enrolled isn't an option.

                      I understand this, but it also says you are automatically placed in deferment while in school. Apparently, you can get a waiver to waive in school deferment and enter a repayment program, such as REPAYE. I don't believe it says anywhere that you can't enter an IDR plan while enrolled full time.

                      It is relatively unknown, and from what I've researched difficult to accomplish based on your servicer (they may either not know or be reluctant to do this for you). I agree its a massive loophole, but apparently it is possible because dental students have done this.
                       

                      allDAT

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                        I understand this, but it also says you are automatically placed in deferment while in school. Apparently, you can get a waiver to waive in school deferment and enter a repayment program, such as REPAYE. I don't believe it says anywhere that you can't enter an IDR plan while enrolled full time.

                        It is relatively unknown, and from what I've researched difficult to accomplish based on your servicer (they may either not know or be reluctant to do this for you). I agree its a massive loophole, but apparently it is possible because dental students have done this.

                        Okay....looking into what you're saying, there actually might be a loophole here and it's buried within PSLF info here:Public Service Loan Forgiveness FAQs

                        This is how it reads as of 5/20/20....

                        If I return to school and qualify for an in-school deferment on my Direct Loans that are in repayment, can I decline the deferment and make qualifying PSLF payments while I’m in school?


                        Yes. You can decline an in-school deferment on your loans that are in repayment status and make qualifying payments on those loans while you are in school. In this case, you must contact your servicer and request that the in-school deferment be removed. Remember, in order for your payments to qualify for PSLF, you must be employed full-time by a qualifying employer while you attend school.


                        It looks like 5 things have to happen to do this - one you have to be done with the program that you originally borrowed for (either undergrad or DDS), then (two) you need to exit your grace period and enter repayment (so they loan status would need to be "in-repayment", then (three) you need to return to school, then (four) when your loans are put into "in-school deferment" you need to request in writing to exit deferment, and (five) your loan servicer needs to approve the request...I've never heard of a student doing this so I don't know if it's actually possible, but it sounds like you know someone who pulled it off. If you could find out concrete details about this student's plan it would benefit everyone. What would be useful to know is:

                        Is this a predoctoral student repaying undergrad loans under REPAYE?
                        Is this a resident repaying graduate loans under REPAYE?
                        Did the student have a gap year between programs to exit grace or did the borrower consolidate to enter repayment faster?
                        What loan servicer approved this?
                        Etc....

                        Really interesting loophole if it can actually be used.
                         

                        Sl1d3r

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                          Based on your assumptions then it sounds like it wouldn’t work for someone going straight from dental school into a residency, unless they consolidated their loans 6 months prior to begin their grace period before they graduated.
                           

                          allDAT

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                            Based on your assumptions then it sounds like it wouldn’t work for someone going straight from dental school into a residency, unless they consolidated their loans 6 months prior to begin their grace period before they graduated.

                            it doesn’t look like timing would work for a student who goes straight from pre-doc to a specialty residency like ortho where they’re classified as a full time student.

                            maybe it would work if the student goes from pre doc to paid residency (AEGD/GPR) to ortho. Again, I haven’t seen this done before, just hypothetical considering what Batman said and I found online....
                             

                            batman12345

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                              Okay....looking into what you're saying, there actually might be a loophole here and it's buried within PSLF info here:Public Service Loan Forgiveness FAQs

                              This is how it reads as of 5/20/20....

                              If I return to school and qualify for an in-school deferment on my Direct Loans that are in repayment, can I decline the deferment and make qualifying PSLF payments while I’m in school?


                              Yes. You can decline an in-school deferment on your loans that are in repayment status and make qualifying payments on those loans while you are in school. In this case, you must contact your servicer and request that the in-school deferment be removed. Remember, in order for your payments to qualify for PSLF, you must be employed full-time by a qualifying employer while you attend school.


                              It looks like 5 things have to happen to do this - one you have to be done with the program that you originally borrowed for (either undergrad or DDS), then (two) you need to exit your grace period and enter repayment (so they loan status would need to be "in-repayment", then (three) you need to return to school, then (four) when your loans are put into "in-school deferment" you need to request in writing to exit deferment, and (five) your loan servicer needs to approve the request...I've never heard of a student doing this so I don't know if it's actually possible, but it sounds like you know someone who pulled it off. If you could find out concrete details about this student's plan it would benefit everyone. What would be useful to know is:

                              Is this a predoctoral student repaying undergrad loans under REPAYE?
                              Is this a resident repaying graduate loans under REPAYE?
                              Did the student have a gap year between programs to exit grace or did the borrower consolidate to enter repayment faster?
                              What loan servicer approved this?
                              Etc....

                              Really interesting loophole if it can actually be used.
                              Haven’t been able to get any info...and from everything I’ve researched, it may just be a myth for the time being...
                               
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