Difference between Private hospital pay and Non-profit hospital pay?

[americanturkey]

New resident with considerable student loan debt. I estimate that PSLF for me would be worth $45k-50k annually (or ~25-30K/year compared to extremely aggressive repayment). Medscape indicates that self-employed EM makes on average $369k/year vs employed at $331k/year (though this doesn't necessarily indicated public vs private).



Could I expect to make 45k -50k more by working for a private hospital than a non-profit hospital for comparable work? Do you have any other insight to share?



I plan to live in a rural/suburban area. From what I have seen geography makes the biggest difference in reimbursement but there is little information available comparing non-profit to private so I am asking directly.

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[gamerEMdoc]

It's going to be highly variable. The question really comes down to, should you actually do PSLF. Some consider this a risky strategy, since there is absolutely no certainty it will exist 10 years from the time you start in the program. Both Obama and Trump administrations have at different times talked about capping loan forgiveness. If you think either party is going to feel sorry for high income earners not getting their student loans forgiven, you are mistaken. PSLF sounds great, but if you participate in it and don't get the benefit, you wind up paying far more over the course of the loan. IMO, its less risky just to pay your loans off aggressively early on in your career. Relying on PSLF to exist is like relying on social security benefits to be there when you retire as a high income earner to augment your retirement income. It's great if it works out, but the chances on it getting capped by the govt is pretty high IMO.

I believe WCI has advocated the strategy of either paying off your loans quickly, or, if you absolutely want to go the PSLF route, then saving the money you would have put into paying the loans off quickly into a nest egg that is readily available should PSLF fall through, so you can immediately pay the loan off when that happens.

Personally, I just think it makes the most sense to pay the loans off as rapidly as possible, and not have to worry about limiting any specific career opportunities down the road.

 

[Hamhock]

I think gamerEM's view is a good way to look at the OPs question.

However, I would agree with WCI's suggestion for early attendings who feel strongly that they will stay in academics: create a separate brokerage account with a semi-conservative stock-bond mix and then fill that account aggressively until the sum exceeds your total loan obligation.

HH

 

[americanturkey]

It's going to be highly variable. The question really comes down to, should you actually do PSLF. Some consider this a risky strategy, since there is absolutely no certainty it will exist 10 years from the time you start in the program. Both Obama and Trump administrations have at different times talked about capping loan forgiveness. If you think either party is going to feel sorry for high income earners not getting their student loans forgiven, you are mistaken. PSLF sounds great, but if you participate in it and don't get the benefit, you wind up paying far more over the course of the loan. IMO, its less risky just to pay your loans off aggressively early on in your career. Relying on PSLF to exist is like relying on social security benefits to be there when you retire as a high income earner to augment your retirement income. It's great if it works out, but the chances on it getting capped by the govt is pretty high IMO.

I believe WCI has advocated the strategy of either paying off your loans quickly, or, if you absolutely want to go the PSLF route, then saving the money you would have put into paying the loans off quickly into a nest egg that is readily available should PSLF fall through, so you can immediately pay the loan off when that happens.

Personally, I just think it makes the most sense to pay the loans off as rapidly as possible, and not have to worry about limiting any specific career opportunities down the road.

Hey! Thanks for the reply. I'm personally not worried it will be removed for current borrowers because it is contained within a clause in the promissory and changing the deal after the fact in that regard would be unprecedented (likely illegal) and has never been brought up by Obama or Trump. In fact no change in student loan terms has every been retroactively applied to my knowledge. It's definitely an unsustainable program that WILL go away for future borrowers at some point (already in Trump newest budget proposal).

The language in the promissory note is a bit soft and nonspecific so I suppose a cap is possible but it would be unprecedented and definitely get worked out in the courts so I think this is also unlikely. Very good chance a cap is placed for new borrowers though if it somehow is not cut completely.

For 25k-50k/year over the first 7 years after residency (depending on the specifics of the future) it seems worth the risk IMO.

However, I agree that if I could simply work for that extra money by choosing private instead of nonprofit it would be ideal, both financially lucrative and secure. And yes I would definitely bank the money just in case.

 

[cyanide12345678]

Hey! Thanks for the reply. I'm personally not worried it will be removed for current borrowers because it is contained within a clause in the promissory and changing the deal after the fact in that regard would be unprecedented (likely illegal) and has never been brought up by Obama or Trump. In fact no change in student loan terms has every been retroactively applied to my knowledge. It's definitely an unsustainable program that WILL go away for future borrowers at some point (already in Trump newest budget proposal).

The language in the promissory note is a bit soft and nonspecific so I suppose a cap is possible but it would be unprecedented and definitely get worked out in the courts so I think this is also unlikely. Very good chance a cap is placed for new borrowers though if it somehow is not cut completely.

For 25k-50k/year over the first 7 years after residency (depending on the specifics of the future) it seems worth the risk IMO.

However, I agree that if I could simply work for that extra money by choosing private instead of nonprofit it would be ideal, both financially lucrative and secure. And yes I would definitely bank the money just in case.

First of all, even if you work at a non profit hospital, the group staffing the ED, which will be your source of employment May not necessarily be a non profit group.

And are you freaking out of your mind?!?!? How can you predict this will exist in 10 years?!?!? 40,000+ people applied last year and the government approved 206 people. You think in 10 years you have a certainty of getting loan forgiveness?!?!?!? No one has certainty.

More than 41,000 public service workers sought federal student loan forgiveness. The government approved just 206.

Pay attention to what gamer said. Pay them off as soon as possible. It's not that hard, regardless of how big your debt burden is.

 

[cyanide12345678]

The other question will be, even if you got loan forgiveness, you may still be on the hook for income taxes as that loan forgiveness may be considered income. You may have to pay a lump sum of 35 percent of your total debt in taxes anyway. There is a possibility that you may end up paying almost the same amount of money eventually after 10 years of payment, interest accumulation, and eventually taxes on "debt forgiveness income".

 

[coachB]

New resident with considerable student loan debt. I estimate that PSLF for me would be worth $45k-50k annually (or ~25-30K/year compared to extremely aggressive repayment). Medscape indicates that self-employed EM makes on average $369k/year vs employed at $331k/year (though this doesn't necessarily indicated public vs private).



Could I expect to make 45k -50k more by working for a private hospital than a non-profit hospital for comparable work? Do you have any other insight to share?



I plan to live in a rural/suburban area. From what I have seen geography makes the biggest difference in reimbursement but there is little information available comparing non-profit to private so I am asking directly.

There still are not that many hospital employed positions although they are increasing. So while you may work at a non-profit hospital, they are usually not your employer. Many factors will have a much larger impact on your income and eligibility for PSLF than the tax status of the hospital.

 

[aafisahar]

The other question will be, even if you got loan forgiveness, you may still be on the hook for income taxes as that loan forgiveness may be considered income. You may have to pay a lump sum of 35 percent of your total debt in taxes anyway. There is a possibility that you may end up paying almost the same amount of money eventually after 10 years of payment, interest accumulation, and eventually taxes on "debt forgiveness income".

The appeal of PSLF is that the loan forgived is not taxed. Not so much for the income based repayment options (eg REPAYE).

 

[namethatsmell]

Do you have any other insight to share?

It's great that you're thinking about this so early on in your career. FWIW I didn't do PSLF and instead prioritized paying off my debt as a new attending. Whatever decisions you make about PSLF, as long as you save diligently you should be OK. That said, here are some thoughts...

1) Many private hospitals are non-profit. Do you mean for-profit vs non-profit? Or private vs public?

2) Don't follow medscape averages or expect general rules of thumb to play out. In my area the three highest-paying EM jobs are two different non-profit hospital-employed jobs (one of which functions like a public/county system) and the third is an SDG.

3) As said above, do NOT trust the government to make good on PSLF for you. Why? Because it behooves no politician to stand up for physicians to qualify for this. Even though non-physician administrators and non-physician owned corporations are essentially milking healthcare for all the dollars they can, physicians still suffer the fate of being a PR dumpster fire and politicians know it. Even if PSLF still exists when your loan term will end I think it's unlikely docs will qualify for it.

4) By not doing PSLF you have the freedom to work for any employer you want without significant financial repercussions.

5) And now for the key point: by placing a chunk of your financial future in the hands of PSLF, you're essentially seeding away control of a real part of that future to a program that you have zero control over. Don't be the guy/girl who falls for the car-dealer type "look how low we can make your monthly payment" shtick while in reality you'll likely pay far more over the long term. By embracing the fact that YOU are responsible to pay off your loans and accepting control, you can prioritize your life how YOU want to. Have a ton of debt like 500k? That sucks. If you pick the right job and don't buy a lambo you can pay it off in 5 years or less while still having a decent QOL. Now close your eyes and imagine how awesome it would be to be debt free early in your career and no longer have to expend another thought about debt. You'd then have the financial footing to work 1/2 time for the rest of your life, leave a toxic job immediately without needing a new one set up, explore new career paths, or focus on retiring early. Or you could keep on trucking full speed ahead in EM. The point is, you'd be more in control of your own destiny. If medicine or EM became intolerable to you, you could walk away at any time--how financially comfortable would that be to do in year 9 of PSLF?

Whatever you decide, just realize there's still no free lunch out there.

 

[TooMuchResearch]

Agreed, I can't imagine having that debt over my head for 10 years. It's going to take me 4-5 years total to pay it off, but then it will be done.

 

[deleted547339]

The appeal of PSLF is that the loan forgived is not taxed. Not so much for the income based repayment options (eg REPAYE).

Ummmmm...what????

Thankfully I’m not a student loan forgiveness expert because I decided to live frugally and only borrow a small amount, but I’m pretty sure that PSLF is just what happens after 10 years, and you just happen to be in repaye or whatever before that. I’m fairly certain that forgiven loans are taxable.

 

[martvubo]

Ummmmm...what????

Thankfully I’m not a student loan forgiveness expert because I decided to live frugally and only borrow a small amount, but I’m pretty sure that PSLF is just what happens after 10 years, and you just happen to be in repaye or whatever before that. I’m fairly certain that forgiven loans are taxable.

The forgiveness from reaching 20 or 25 years of payments (from working anywhere under any of the income based repayment schemes) is taxed. The forgiveness from reaching 10 years of payments while working in public service is not taxed.

 

[namethatsmell]

The forgiveness from reaching 20 or 25 years of payments (from working anywhere under any of the income based repayment schemes) is taxed. The forgiveness from reaching 10 years of payments while working in public service is not taxed.

Ah yes I mix up IBR and PSLF and their durations frequently...like in my post above. Gonna fix that now.

 

[cyanide12345678]

Just read up on the requirements to qualify for pslf. Most of us will not qualify. To qualify we need to be paying our loans on income based repayment. Which high income earners do not qualify for as that requires the payments to be less than the standard payment based on income. There is a reason only 0.5 percent were actually approved to get the loan forgiveness in 2018.

 

[cyanide12345678]

I mean seriously.... The government itself is proudly posting all the data

https://studentaid.ed.gov/sa/about/data-center/student/loan-forgiveness/pslf-data

Just click on pslf report and you'll see how thousands applied and only a hand full were approved.

this is not a guaranteed option by any means

 

[Tenk]

So I actually work at a non profit hospital that qualifies for PSLF and I will be eligible in another 3 years to have my loans forgiven. There’s just one problem though: I paid them off last week!

One of my good friends and coworker is on the same path and I will see if hers get paid off in three years. I really hope they do honestly but I didn’t feel like gambling with that much money and I won’t have any regret if hers do get paid off.

I contributed about half my paycheck to loans over 3.5 years and paid them off along with my wife’s for a grand total of around $400,000. I didn’t live like a resident and have had a great time. My recommendation is to just refinance and aggressively pay them off. Not only does it feel freaking amazing but it also teaches you to live on half your pay so when they are paid off you just start having butt loads of cash building up. Also, finding a job you love is way more important than settling for something just for loans.

 

[FrkyBgStok]

Just read up on the requirements to qualify for pslf. Most of us will not qualify. To qualify we need to be paying our loans on income based repayment. Which high income earners do not qualify for as that requires the payments to be less than the standard payment based on income.

Can you provide a source? I am not finding anything related to any of that when I look. Like every sentence I cannot find anything to confirm.

 

[Dr Mantis Toboggan]

Thank you for doing the right thing and paying off your debts. Taxpayers should not be subsidizing physician students loans, with exception for active duty military or legitimate public service such as IHS.

So I actually work at a non profit hospital that qualifies for PSLF and I will be eligible in another 3 years to have my loans forgiven. There’s just one problem though: I paid them off last week!

One of my good friends and coworker is on the same path and I will see if hers get paid off in three years. I really hope they do honestly but I didn’t feel like gambling with that much money and I won’t have any regret if hers do get paid off.

I contributed about half my paycheck to loans over 3.5 years and paid them off along with my wife’s for a grand total of around $400,000. I didn’t live like a resident and have had a great time. My recommendation is to just refinance and aggressively pay them off. Not only does it feel freaking amazing but it also teaches you to live on half your pay so when they are paid off you just start having butt loads of cash building up. Also, finding a job you love is way more important than settling for something just for loans.

 

[Mat the coolcat]

The other question will be, even if you got loan forgiveness, you may still be on the hook for income taxes as that loan forgiveness may be considered income. You may have to pay a lump sum of 35 percent of your total debt in taxes anyway. There is a possibility that you may end up paying almost the same amount of money eventually after 10 years of payment, interest accumulation, and eventually taxes on "debt forgiveness income".

That scares the daylights out of me. Lord.

Another option is doing REPAYE while you are in residency, and then refinancing afterward. The benefit of REPAYE as a resident is that the first 3 years your accrued interest is completely subsidized for subsidized loans, and 50% subsidized for unsubsidized federal loans. The minimum payments with REPAYE are usually a little higher than a private refinance (from what I've heard maybe ~$200 more/month).

Refinancing through someone like SOFI or Laurel Road right into residency can bring your interest rate down a couple percent (determined by your credit score), give you monthly payments as low as $100 a month, and also give you usually 6 month deferment options once you start residency and once you get out.

My plan is to do REPAYE for those first 3 years, and then maybe refinance once I'm an attending with a variable interest rate (can get as low as 2-3% interest), and then smash the debt quickly.

 

[cyanide12345678]

Can you provide a source? I am not finding anything related to any of that when I look. Like every sentence I cannot find anything to confirm.

Go through the faqs on the bottom of the page. Literally this is the first page you get if you do a Google search for pslf requirements.

https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#qualify

 

[deleted547339]

Just read up on the requirements to qualify for pslf. Most of us will not qualify. To qualify we need to be paying our loans on income based repayment. Which high income earners do not qualify for as that requires the payments to be less than the standard payment based on income. There is a reason only 0.5 percent were actually approved to get the loan forgiveness in 2018.

That’s not correct. Income based repayment (IBR) is one specific repayment method. You can be in REPAYE, IBR, PAYE or ICR.

 

[cyanide12345678]

That’s not correct. Income based repayment (IBR) is one specific repayment method. You can be in REPAYE, IBR, PAYE or ICR.

Which one of these does someone with a 350k annual income qualify for?

 

[deleted547339]

Which one of these does someone with a 350k annual income qualify for?

I was under the impression that you can pick whichever you like.

 

[EMdoc10]

Which one of these does someone with a 350k annual income qualify for?

If you signed up for any of the income-driven plans out of med school/in residency (when you qualify as having partial financial hardship), you cannot be kicked out later regardless of what you make as an attending.

 

[theSmurfette]

I was under the impression that you can pick whichever you like.

Any of the income based programs technically become the standard 10-year repayment once you reach a certain income. I suppose that the benefit of PSLF would be the reduction in payments from the first 3-4 years of student loans, i.e., during residency.

Personally, I plan to live on ~$100k/year plus my husband’s salary until my loans are paid off. I’ll be 40 when I finish residency so I want to enjoy life without paying off my student loans until 50 or 60. I’ll save as much in interest as what would probably be “forgiven” while working for PSLF.

The difficult thing for PSLF would be finding a job where you are employed by the hospital and not a private group, so likely academics which ultimately would cost you even more in lost wages over that 10 year repayment.

But what do I know...I’m a 36 year old perpetual student. LOL

 

[Hamhock]

Thank you for doing the right thing and paying off your debts. Taxpayers should not be subsidizing physician students loans, with exception for active duty military or legitimate public service such as IHS.

Let's slow down a bit here. I agree people should pay off debts.

And under many circumstances, I believe the taxpayers should not be paying off physician student loans.

However:

Since PSLF is place, I think it is perfectly "right" to fulfill the requirements of the program and have loan forgiveness. Assuming you (Dr Mantis) have completed medical school in the US (and took loans) and assuming you have completed an ACGME-approved -- and therefore federally-supported via the taxpayers -- residency, you too have benefited from the taxpayers "subsidizing physician loans". To thank someone for not participating in a legal program like PSLF smells of naive moral judgement.

HH

 

[Dr Mantis Toboggan]

Good points. I am often naive. And judgemental. For sure I had federally subsidized loans and completed a residency which was federally supported.

This PSLF deal just triggers me for some reason. I don’t blame anyone for taking it. But I just don’t think a specialist who works for a technically not for profit but still quite fancy hospital should have their loans forgiven when they are banking mid to high six figures. The fancy local university hospital (which is a 501c) doesn’t even accept Medicaid patients in their outpatient clinics.

Let's slow down a bit here. I agree people should pay off debts.

And under many circumstances, I believe the taxpayers should not be paying off physician student loans.

However:

Since PSLF is place, I think it is perfectly "right" to fulfill the requirements of the program and have loan forgiveness. Assuming you (Dr Mantis) have completed medical school in the US (and took loans) and assuming you have completed an ACGME-approved -- and therefore federally-supported via the taxpayers -- residency, you too have benefited from the taxpayers "subsidizing physician loans". To thank someone for not participating in a legal program like PSLF smells of naive moral judgement.

HH

 

[deleted547339]

Good points. I am often naive. And judgemental. For sure I had federally subsidized loans and completed a residency which was federally supported.

This PSLF deal just triggers me for some reason. I don’t blame anyone for taking it. But I just don’t think a specialist who works for a technically not for profit but still quite fancy hospital should have their loans forgiven when they are banking mid to high six figures. The fancy local university hospital (which is a 501c) doesn’t even accept Medicaid patients in their outpatient clinics.

I’m with you on this one. There is a disconnect between the intent of the program and the use of it. I knew people who were buying cars with student loans, living in fancy apartments, going out to eat, going on nice vacations and going to the bars all the time.

You’re telling me it’s morally ok to ask tax payers to pay back loans used for going out, going on vacation and living it up while I’m training instead of living within your means for an interventional cardiologists who takes 3 years doing IM, 3 years of cards, 2 years of IC fellowship then only has to do 2 years of academia (or research during training) to get a half million of student loans paid for only to turn around and make 800k the next year? Or it’s fine for a neurosurgeon to spend whatever he or she wants because they’ll train for 8 years with a $0 payment only to get hit with 2 years of payments?

That’s BS and everyone knows it, people just do mental gymnastics to make it seem ok. If living beyond your means wasn’t rampant in the medical community, that would be one thing, but it’s everywhere.

 

[Tenk]

Thank you for doing the right thing and paying off your debts. Taxpayers should not be subsidizing physician students loans, with exception for active duty military or legitimate public service such as IHS.

Oh, I'm only doing it because I don't trust the government. I would do it in a heartbeat if it were guaranteed.

 

[gamerEMdoc]

Education Department rejects nearly all applicants for a student loan forgiveness program

Things not looking good for PSLF...

 

[BoardingDoc]

Education Department rejects nearly all applicants for a student loan forgiveness program

Things not looking good for PSLF...

I am by no means a fan of PSLF and am not an applicant for it myself, however, every time I see one of these articles it seems like the reasons for denial aren't arbitrary. It's because the PSLF guidelines stipulate that you must do every part of their checklist. Many people leave out a component or two and then are irate when the govt rejects their claim. That's on the borrower, not on the govt. If you're going to enter into a contract with the government, you should read the damn contract.

From this article you linked:
- Applicants to this more relaxed program (TEPSLF) are required to file a standard PSLF form first. 75% of the applicants didn't do that.
- Of the 25% who did, 40% hadn't even completed the required 10 years of payments.
- Of the 60% of that 25% (so we're down to 15% of the original applicants) yet more were rejected because they had private loans, didn't work in public service or had other clear strikes against them.
- Currently, 3% of total applicants are still under consideration.

Again, I'm not suggesting that you do PSLF as a doc. Just refinance and pay your damn loans. That said, if you are going for PSLF, read the actual agreement and make sure you're meeting all the requirements. Planning on receiving tens or hundreds of thousands of dollars in loan forgiveness without taking the time to actually ensure that it is going to happen is just *****ic.

 

[Spikebd]

I am by no means a fan of PSLF and am not an applicant for it myself, however, every time I see one of these articles it seems like the reasons for denial aren't arbitrary. It's because the PSLF guidelines stipulate that you must do every part of their checklist. Many people leave out a component or two and then are irate when the govt rejects their claim. That's on the borrower, not on the govt. If you're going to enter into a contract with the government, you should read the damn contract.

From this article you linked:
- Applicants to this more relaxed program (TEPSLF) are required to file a standard PSLF form first. 75% of the applicants didn't do that.
- Of the 25% who did, 40% hadn't even completed the required 10 years of payments.
- Of the 60% of that 25% (so we're down to 15% of the original applicants) yet more were rejected because they had private loans, didn't work in public service or had other clear strikes against them.
- Currently, 3% of total applicants are still under consideration.

Again, I'm not suggesting that you do PSLF as a doc. Just refinance and pay your damn loans. That said, if you are going for PSLF, read the actual agreement and make sure you're meeting all the requirements. Planning on receiving tens or hundreds of thousands of dollars in loan forgiveness without taking the time to actually ensure that it is going to happen is just *****ic.

Yup. You have to have all your ducks lined up before submitting this stuff. I’m not worrying about the program. There will be a big stink if they take the program away. If they’re going to give us Medicare for all and make us all gov employees then we should demand free/very low cost med schools.

 

[gamerEMdoc]

Yup. You have to have all your ducks lined up before submitting this stuff. I’m not worrying about the program. There will be a big stink if they take the program away. If they’re going to give us Medicare for all and make us all gov employees then we should demand free/very low cost med schools.

Totally agree. The only way medical professionals should be even consider supporting some type of universal healthcare is if medical school was free (or even a salaried position) and there was federal tort protection.

 

[NITRAS]

Let's slow down a bit here. I agree people should pay off debts.

And under many circumstances, I believe the taxpayers should not be paying off physician student loans.

However:

Since PSLF is place, I think it is perfectly "right" to fulfill the requirements of the program and have loan forgiveness. Assuming you (Dr Mantis) have completed medical school in the US (and took loans) and assuming you have completed an ACGME-approved -- and therefore federally-supported via the taxpayers -- residency, you too have benefited from the taxpayers "subsidizing physician loans". To thank someone for not participating in a legal program like PSLF smells of naive moral judgement.

HH

I think PSLF is just a terrible idea for pretty much everyone (except universities, and loan servicing organizations).

1. It encourages people to make stupid decisions. Lots of people spend much more on their educations than they should based an rational rates of expected return of their investment. Education is an investment, and people should think of their time and money spent and expect rates of return.. Doc A who went to an out of state undergrad, a private grad school for masters, and private medical school probably spent $600k on his/her education. Doc B went to a state school with in-state tuition, and went to a very inexpensive state medical school and came out with about $100k in loans. Why should we be encouraging people do do the former? Even worse is joe social worker who went to private undergrad and private grad school and spent $250k to be a social worker making $70k. These numbers are terrible. Why should we (as society) telling people its going to be OK if they make make these decisions?

2. It encourages people to take jobs they wouldn't otherwise take. $50k a year in lost income to go to a 501c means you have given up $500,000 in income. Physicians can often make much more by practicing in a less desirable area. There can easily be swings of six figures in job opportunities. Why are we encouraging people to make less? Pretty much any licensed physician can make $300k-$400k by working hard, in a less desirable area.

3. The risk of the high debt is extended over 10 years. 10 years is a lot of time. That's 4-5 congress elections and 2-3 presidential elections. Seeing the populism in the politics today, why do you think you are safe? Everyone already consider docs to be rich and beholden to big pharma.

4. In general people apparently can't follow the rules to get loan forgiveness. Hence the large number of rejections.

Yes, these are moralistic judgments, but I still think the whole student loan program needs to be revamped. PSLF has led to plenty of stupid decisions and probably has encouraged a big chunk of the $1.5T in student loans.