Dental School Loans Question for C/O 2028 Planning to Pay Using RAP

[futuredentalstudent2024]

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I am grandfathered under the old rule regarding Fasfa GradPlus loans. However, after much research, IDR will now be the RAP plan. That means I will pay 10% of my income and my loans will be forgiven in 30 years and all the unpaid interest is subsidized to prevent the interest from capitalizing on itself and causing the principle amount to balloon uncontrollably. I've been paying $200-300 a month to try to keep my interest down, but it seems like it wouldn't be worth it anymore. I want to ask if I shouldn't continue paying back little by little and if maxing out on GradPlus loans would be okay.

Also does dental school cost (for grandfathered-in students) even matter if everything will get forgiven in 25 or 30 years and unpaid interest is subsidized? All it would affect is how much you pay back for the tax bomb, right? (I only chose my current school because it was the cheapest option. If cost wouldn't have been a factor, I'd gone somewhere else)

 

[SigmaFS]

Just for some clarification, IDR (Income Driven Repayment) is an umbrella term. IBR and RAP are available plans under IDR. What did your research tell you about IBR (new)?

 

[TheLastDance]

If you're paying just the interest on your principal relative to your AGI, you will never touch your principal. At 400K-500K principal, that means realistically over 20-30 years you will have paid in equivalent (minimum) hundreds of thousands of dollars extra into that loan that never gets touched.

Be very careful what you're doing going forward. Just back of napkin math, if you're paying 2-3K/month based on your AGI and your income never increased and/or stayed around the 200-300K/year range, that's like 300-400K just in interest you've paid into a loan that never decreased after 15 years or so. Now add another 15 years. That's another 300K in interest. You will have paid 600K in interest on a loan that was never touched for the original 400-500K to be forgiven after 30 years.