Exiting PSLF to work for profit?

[Makethatcargowooot]

Hello,

I am an incoming PGY-1 in internal medicine looking at financials. If I choose to do the PSLF program, but then at say year #5 (2 years out of residency) decide to work for a for profit medical group, how would this affect my loan circumstances?

I understand I would likely have to pay off the entirety of the loan with interest, but for example, are there penalties for leaving PSLF? Are there other contractual considerations I am not thinking about as well? I just had a hard time finding answers to this topic online.

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[SpartanWolverine]

Here is my understanding:
PSLF requires 120 payments under a qualifying repayment plan (e.g., PAYE, IBR, etc.) while employed by a qualified employer. There is no specific "PSLF" repayment plan and it does not require 120 consecutive payments. There is no contract, but it does behoove you to send in yearly certifications of qualifying employment.

So, you could effectively tally up half of your 120 payments during those 5 qualifying years and then not accrue any more of the 120 payments after leaving the non-profit. It would literally not affect anything else. You could continue to pay off your loans with the same plan, switch plans, do whatever you want, but there's no drawback other than not completing the remaining 60 qualifying payments.

 

[RangerBob]

There are no penalties. The only time you are "in" the PSLF program is when you apply for forgiveness after making 120 payments (consecutive or non-consecutive). Otherwise you are just documenting payments (I submit the form yearly).

I am going into a position that is not PSLF-eligible. I am not doing anything other than planning on how to repay those loans off ASAP

 

[TMP-SMX]

Your terminology is somewhat confusing. PSLF requires you to work for a 501c3 nonprofit group. Many hospitals are nonprofit status but the physician group you would work for isn't so be cautious about that. Many different repayment plans are PSLF eligible but you have to make 120 (not consecutive) qualifying payments in standard, IBR, REPAYE, ICR, or PAYE plans for direct loans. If you consolidate you have to start over (so do it quickly if you don't have all direct loans). The goal should be to minimize your payments if you truly want to go to PSLF route. It's a risk to take as it's not guaranteed and you would end up with significant interest built up. When you do switch repayment plans (you may want to between IBR and REPAYE depending on spousal income and how much you make as the percents are different on payments required). Run a calculator to compare different plans depending on your situation. Your payments are likely to be very low just starting residency as you only have 6 months of income. You may want to move directly into repayment and waive your grace period to start making eligible repayments.