DO school Tuition and Debt!

[68PGunner]

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So without working for the gov't, you can't get the remaining 242.5k forgiven so that is added to your taxable income, correct? If we're assuming that the cap subtracts from the debt amount and the remaining amount is not forgiven.


True, but I'm assuming that it will be capped as there have been talks about it already. But yes, if there is no cap, I can see how that full amount is forgiven and there is no tax bomb.

Hm, true. I messed that part up. Without PSLF, there is a tax bomb. But with a PSLF cap, wouldn't that mean that the rest of the debt amount is not forgiven then? Why have a cap then? I guess my mess up wasn't really a mess up?
I know this is still unknown and hypothetical since we don't know what will happen once the first batch of borrowers..

Don't worry about the tax bomb. Your accountant will take care of that mess for you. It's negligible.

As for getting the rest of your debt forgiven in the span of 250-300K, I think it's a small price to pay by agreeing to work for the government for 4-6 years. It's up to you. The point that I'm trying to make is that a debt of 250-300K is doable. When you get above 400K, that is the time when it gets dicey.

 

[DrMikeP]

When I pursued my first doctorate over 15 yrs ago there were tons of people insisting that programs to deal with loans would go away before graduating and you'd be screwed. HRSA and several other loan repayment programs are actually still around. What most often happened was that some of the programs changed but those already in them were safe. I was able to benefit greatly from 2yrs in Americorp and teaching 3 yrs in a low income school, those progs changed but are around in a reduced form. New programs were added, which to some extent are even better. With PSLF, it might change but for those creative there will be some opportunity IF you want it and are willing to jump through whatever hoop to get it. It might be working on a reservation, inner city/public hospital or even in some foriegn countries for 5yrs, but there will be something.

So yes be frugal and weigh cost options for med school but if you approach med school stressing over what might possibly maybe sorta kinda at some unknown point potentially happen you'll seriosuly struggle making it through. I seen it with many many med students. Focus on the tasks at hand and the coming tasks, then when those are done take on the next. If you don't make it through then you'll have an even worse debt nightmare, so the biggest debt payment secret is pass!!!

 

[Ho0v-man]

When I pursued my first doctorate over 15 yrs ago there were tons of people insisting that programs to deal with loans would go away before graduating and you'd be screwed. HRSA and several other loan repayment programs are actually still around. What most often happened was that some of the programs changed but those already in them were safe. I was able to benefit greatly from 2yrs in Americorp and teaching 3 yrs in a low income school, those progs changed but are around in a reduced form. New programs were added, which to some extent are even better. With PSLF, it might change but for those creative there will be some opportunity IF you want it and are willing to jump through whatever hoop to get it. It might be working on a reservation, inner city/public hospital or even in some foriegn countries for 5yrs, but there will be something.

So yes be frugal and weigh cost options for med school but if you approach med school stressing over what might possibly maybe sorta kinda at some unknown point potentially happen you'll seriosuly struggle making it through. I seen it with many many med students. Focus on the tasks at hand and the coming tasks, then when those are done take on the next. If you don't make it through then you'll have an even worse debt nightmare, so the biggest debt payment secret is pass!!!

Thanks. I think most this thread could use some counseling.


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[deleted731525]

@68PGunner Can you explain this "cap"? My understanding of it is that once you apply for PSLF after the 120 qualified payments, your forgiveness amount is only $57.5k. Thus with a debt of 300k even after making 120 payments, the debt would now be 300-57.5k = 242.5k. This amount is now added to your yearly income as taxable income, hence known as the "tax bomb". That taxable amount is then required upfront.
I'm confused as to how one can get 350k forgiven with the cap unless you are talking about the tax bomb as well.
Insight please!

.

 

[DrMikeP]

To answer questions on PSLF, IBR, etc...

Here is a website with actual information vs. speculation. The explanations with examples are extremely helpful.

http://www.ibrinfo.org/what.vp.html#pslf