Federal Primary Care Loans Program after 2010

[Cornell08]

Hey there, I realize there are threads on this subject but they are all very dated and refer to the old and disadvantageous rules. I will be entering med school in the fall and I'm leaning toward primary care.

info on the Primary Care Loan (PCL)
http://www.hrsa.gov/loanscholarships/loans/primarycare.html

After March, 2010, it seems like even if someone goes into med school thinking about Primary Care and changes his/her mind, the new law only raises rates from 5% to 7% which really isn't much different than Stafford Loans and less than Grad Plus. The real savings comes from the 5 years (med school + 1 year of grace period) when interest does not accrue on principal.

I'd like to hear from some people who have the Primary Care Loan (PCL) or those who are going to take it/those who decided against it (after 2010, before 2010 if you bailed out of Primary Care you'd pay 18% on your principal which is devastating). Am I missing something because this program seems really helpful even if you're just leaning toward PC?

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[Whistlepig]

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[BEJ2]

Do you happen to know if the new Primary Care Loan rules still exclude the PCL from Income Based Repayment and loan forgiveness?

To the best of my knowledge, even though the federal loans have higher interest rates, they are eligible for IBR and forgiveness after ten years (if you work for a non-profit entity, and it seems most hospitals qualify from what I've read). So with IBR you can pay a relatively small/manageable payment each month, even less than interest if necessary, and have the loan completely forgiven after ten years. This is a good deal for primary care doctors, if it lasts.

Couldn't do this with the old PCL, which meant you'd end having to pay the full amount of loan + interest, which even at 5% could likely end up costing much more. And unless I'm missing something (please correct me anybody who knows), this seemed to me to invalidate the whole premise of the loan. (Why would I pay more money at lower interest instead of less money for a shorter time at a higher interest?)

If things have changed and the PCL is now eligible for IBR, that would definitely be the way to go for anyone at all interested in primary care.

Thanks for the post, good to know either way.

 

[Deanira]

I accepted the PCL after 2010 (in 2013) for about $12000, and ended up entering a combined residency (Family Medicine & Psychiatry), so this makes me "non-compliant" with the PCL agreement. As I'm looking at my loan info now that I will start to pay my loans back, my interest rate was written down as 18%! I was under the impression that it would only increase to 7% if I didn't do a primary care service. I just emailed my school's financial aid office to try and get this sorted out. I would NOT have accepted the loan if I knew it could potentially go up to 18%, so I definitely know I saw that it would only go up to 7% because I remember thinking, "well, if it goes up to 7% that is close to all the other loans' interest - so not that bad".....an increase to 18% is REAL BAD.