First hospitalist contract: Stressed over nothing?

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cher25

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I'm excited to be close to signing the dotted line of my first contract. I have been out of state for residency and am headed back to Texas. The group I'm signing with is offering a great salary and benefits. But after reading the contract closely and asking for clarification, I've been informed that I'll be working for the 'group contracted by the hospital' and I will be credentialed through the hospital.

My main concern is that this particular hospital is a 501c3. Being employed by the main hospital group will allow me to potentially qualify for multiple student loan repayment programs. Being employed by the group 'contracted by the hospital' will disqualify me from all. The job is lovely concerning scheduling, patient load (in comparison to other places I've interviewed in the region), patient population, part of town. The people that I've interacted with are all quite pleasant. I don't want to make an issue out of a nonissue. Being employed by the main hospital group is not a possibility right now, though in the near future (6 months or so) it will be on the table but my contract will be signed for the private group for at least 1 year by that time.

About the job:
desirable city in Texas (texas is home... desirable for me)
standard 7 on 7 off 182 shifts per year (not round and go)
base 250K plus 40K max in quality and productivity bonuses paid quarterly. According to hospitalists i've spoken with in the group, they average about 7K-8K per quarter in these productivity bonuses.
No nights, no procedures, no codes. closed ICU
Pt census 17-20. admits divided evenly throughout the day (average 2 per day for each team member). Their goal is 15-18 after hiring 5 more by summer
20K sign on bonus and the other perks like moving expenses, CME, licensing fees, etc.

Other jobs in the area have a base that ranges from 200 - 220 on average with larger potentials for productivity bonuses.

Should I be concerned about losing student loan forgiveness and/or repayment eligibility by signing with the private group? Is this a bad deal? I owe about 285K.

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Other jobs in the area have a base that ranges from 200 - 220 on average with larger potentials for productivity bonuses.

Should I be concerned about losing student loan forgiveness and/or repayment eligibility by signing with the private group? Is this a bad deal? I owe about 285K.
I suspect that all those other gigs are structured similarly to your current one, since this is pretty much the standard setup at non-academic hospitals.

If you want to be eligible for loan forgiveness, you're probably going to need to take an academic job.

Or just live like a resident for the next 2-3 years, pay off your loans and get on with your life.

Good luck.
 
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I suspect that all those other gigs are structured similarly to your current one, since this is pretty much the standard setup at non-academic hospitals.

If you want to be eligible for loan forgiveness, you're probably going to need to take an academic job.

Or just live like a resident for the next 2-3 years, pay off your loans and get on with your life.

Good luck.
thanks for your input. It's not been an easy market to break into and I've heard credentialing is quite tedious. Of the offers that I have received, this is the best one. I'm concerned that if i wait for an academic job, I won't start on time. I'm actually not at all interested in academics but willing to do it for the loan repayment. I have an option of signing for 1, 2, or 3 years. I think I'll sign for a year and go from there. I guess I'll re-evaluate in a year whether or not I want to just refinance vs seeking employment that would qualify me for repayment vs forgiveness.

The other gigs vary. Some want you to work 12-16 weeks of nights per year 1 week per quarter (I hate nights). Some have admitting shifts interspersed with the benefit of round and go when you're not on an admitting shift (i like this idea). This gig is just a standard 7 on 7 off rounding with balanced admissions between the team members but you have to stay your entire shift (which I don't like but am of course willing to do).
 
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thanks for your input. It's not been an easy market to break into and I've heard credentialing is quite tedious. Of the offers that I have received, this is the best one. I'm concerned that if i wait for an academic job, I won't start on time. I'm actually not at all interested in academics but willing to do it for the loan repayment. I have an option of signing for 1, 2, or 3 years. I think I'll sign for a year and go from there. I guess I'll re-evaluate in a year whether or not I want to just refinance vs seeking employment that would qualify me for repayment vs forgiveness.
You're looking at it wrong. You're going to give up $30-50K/year in salary for an academic job that will (maybe) get you $10-20K/y of loan forgiveness. I know "loan forgiveness" sounds good, but there's no such thing as free money. It has to come from somewhere.
 
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Agree with gutonc...no free lunch.

Don't underestimate the freedom round and go gives you. It's annoying to wait around for admits sometimes.

Also find out how extra shifts work in 7 on 7 off. If you're really trying to hammer down the loans, might be better to work somewhere that lets you easily pick up extra shifts (especially if no secondary activities are allowed)
 
Agree with gutonc...no free lunch.

Don't underestimate the freedom round and go gives you. It's annoying to wait around for admits sometimes.

Also find out how extra shifts work in 7 on 7 off. If you're really trying to hammer down the loans, might be better to work somewhere that lets you easily pick up extra shifts (especially if no secondary activities are allowed)
It appears easy to pick up extra shifts at this gig. But they only offer $1350 per extra shift. Other contracts I reviewed will give $1500 for the extra shifts. I was considering doing extra shift outside of this contract (if allowed) so that I can possibly get 1099 status and gain the tax benefits associated with that. I'm looking into this as I'm not too sure how it'll work yet.

You're looking at it wrong. You're going to give up $30-50K/year in salary for an academic job that will (maybe) get you $10-20K/y of loan forgiveness. I know "loan forgiveness" sounds good, but there's no such thing as free money. It has to come from somewhere.

Good points.
 
You need to crunch the numbers and see how much that loan forgiveness will actually help. With the tax bomb at the end, you might not end up saving a ton of money. I know a lot of people are refinancing through companies that target physicians when they graduate to get a lower interest rate (~3%) and trying to pay it off in 10 or less years. There are a lot of options that can "save you money" besides loan forgiveness programs.
 
If the loan forgiveness you are referencing is the PSLF program i would pretend it does not exist because it very well may not in the future.

House Republicans May End Student Loan Forgiveness
And even if it doesn't end completely, you can bet your a** that they're going to limit it either by total payout or income. It was never intended for physicians with loan:annual income ratios of 0.25-1:1, but for teachers and social workers and the like with loan:annual income ratios of 3-5:1.
 
You need to crunch the numbers and see how much that loan forgiveness will actually help. With the tax bomb at the end, you might not end up saving a ton of money. I know a lot of people are refinancing through companies that target physicians when they graduate to get a lower interest rate (~3%) and trying to pay it off in 10 or less years. There are a lot of options that can "save you money" besides loan forgiveness programs.
I'm in the process of crunching the numbers but at face value it appears that, as gutonc said, this job is paying me much more (easily 30-40K) than if I were to take one of the other qualifying jobs. So I think in the long run it'll be worth it to possibly lose the loan repayment benefit and go private. I'm getting a 20K sign on bonus and maybe can negotiate a retention bonus at the time of my contract renewal. I'm currently looking at refinance rates to consider that option as well. I was counting more on loan repayment as opposed to PSLF to help me pay the debt down quickly. I can't fathom having this debt for another 10 years.
 
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I'm not certain which "loan forgivness or repayment options" you are referring to. PSLF would require hiring by a 503c. REPAYE does not.

Using $285K as your balance, $250K as a starting salary, 2% wage increases, 6% interest on your gov't loans, and 3% if you refi, and a household size of 2 (and ignoring 3 years of payments while being a resident):

REPAYE with PSLF: $246K payments over 10 years + $180 loan forgiveness x 32% tax bracket = $304K
REPAYE without PSLF: $481K over 18 years (but smaller payments earlier, which might be helpful if you have other expenses)
Refi at 3%: $320K over 8 years

As mentioned, whether PSLF will really be around in 5+ years is anyone's guess (or they will cap it).

Bottom line: difference is small, not worth losing sleep over. Pinning hopes on PSLF means you'll worry about this for years to come. REPAYE is more costly but takes less out of your paycheck in early years, which might be of some benefit. Salary difference likely wipes out any savings.
 
I'm not certain which "loan forgivness or repayment options" you are referring to. PSLF would require hiring by a 503c. REPAYE does not.

Using $285K as your balance, $250K as a starting salary, 2% wage increases, 6% interest on your gov't loans, and 3% if you refi, and a household size of 2 (and ignoring 3 years of payments while being a resident):

REPAYE with PSLF: $246K payments over 10 years + $180 loan forgiveness x 32% tax bracket = $304K
REPAYE without PSLF: $481K over 18 years (but smaller payments earlier, which might be helpful if you have other expenses)
Refi at 3%: $320K over 8 years

As mentioned, whether PSLF will really be around in 5+ years is anyone's guess (or they will cap it).

Bottom line: difference is small, not worth losing sleep over. Pinning hopes on PSLF means you'll worry about this for years to come. REPAYE is more costly but takes less out of your paycheck in early years, which might be of some benefit. Salary difference likely wipes out any savings.
Thanks for your perspective. Just for clarification, in Texas if I work for an academic hospital and/or a 501c3, I will qualify (through a competitive application process) for anywhere from 20-35K annually in loan repayment. Some of this comes in the form of a research commitment, some if I take a faculty position with a teaching commitment. There are others as well. Also, yes, there is the eligibility for PSLF factor as well. The positions at the academic centers were offering 218-222K base on average. Different bonus structures but from asking around, bonus up to 250-260K based on various measures. For the job I'm considering accepting with the private group, 250 base, 7-10K in productivity and quality bonuses per quarter. Average salary for current hospitalists at around 280-285K. I have already been enrolled in REPAYE throughout residency and paid $200/month through the first year, then $255 through the second year, now am at $550 through third year. As you said, I'm not sure the difference is worth the stress i'm giving myself. Thanks again for the advice.
 
Thanks for your perspective. Just for clarification, in Texas if I work for an academic hospital and/or a 501c3, I will qualify (through a competitive application process) for anywhere from 20-35K annually in loan repayment. Some of this comes in the form of a research commitment, some if I take a faculty position with a teaching commitment. There are others as well. Also, yes, there is the eligibility for PSLF factor as well. The positions at the academic centers were offering 218-222K base on average. Different bonus structures but from asking around, bonus up to 250-260K based on various measures. For the job I'm considering accepting with the private group, 250 base, 7-10K in productivity and quality bonuses per quarter. Average salary for current hospitalists at around 280-285K. I have already been enrolled in REPAYE throughout residency and paid $200/month through the first year, then $255 through the second year, now am at $550 through third year. As you said, I'm not sure the difference is worth the stress i'm giving myself. Thanks again for the advice.

So with PSLF at the academic/503(1)c job, you might come out *slightly* ahead. PSLF doesn't tax the forgiven loans, so they just go away.

With just REPAYE, you probably won't: 10% of your income for 17 years as an attending (assuming you did REPAYE for 3 years as a resident) will pay back the majority of the loans as is, and then whatever is forgiven will then be taxed at your marginal tax rate (probably at least 32% if you're married and your spouse doesn't work, likely more depending on spousal income and what tax brackets will be in 2035).

As mentioned above, you'd probably be just as well off refinancing the loans and paying them back the good old fashioned way. If your loans are *really* high, the math may work out better for PSLF/REPAYE, but you'd have to run it yourself.

The people who come out way ahead with things like PSLF are those with long residencies (5+ years is helpful) who then take 503(1)c jobs and get forgiveness after a few years as an attending. And those with humongous debt (say, private undergrad, private med school, etc)

Our own @The White Coat Investor has a good article listing the common vendors physicians use to refinance their loans:
Refinance Your Student Loans! | The White Coat Investor - Investing And Personal Finance for Doctors
 
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Just wanted to add, if you are considering transferring to the hospital group after your 1 year, make sure your contract doesn't have a noncompete clause.
Regarding the 1350 vs 1500 per shift, there maybe some small print involved. For example, my group takes a % off the top to pay overhead. If I work outside my group, they take a different % off.
 
You'll probably qualify for IRB/repaye year after year whether you're private or public. I wouldn't stress about that, and I wouldn't bank on PSLF unless Republicans lose the Congress. I certainly wouldn't make a decision based on PSLF alone. Try to find a place you enjoy and it'll make coming to work easier and fruitful. The money will be there. That 15 patient promise once they hire 5 more is a pipe dream fwiw. Add 3 to 5 on whatever they say from nov-april. Every day 10,000 baby boomers turn 65, right?
 
So with PSLF at the academic/503(1)c job, you might come out *slightly* ahead. PSLF doesn't tax the forgiven loans, so they just go away.

With just REPAYE, you probably won't: 10% of your income for 17 years as an attending (assuming you did REPAYE for 3 years as a resident) will pay back the majority of the loans as is, and then whatever is forgiven will then be taxed at your marginal tax rate (probably at least 32% if you're married and your spouse doesn't work, likely more depending on spousal income and what tax brackets will be in 2035).

As mentioned above, you'd probably be just as well off refinancing the loans and paying them back the good old fashioned way. If your loans are *really* high, the math may work out better for PSLF/REPAYE, but you'd have to run it yourself.

The people who come out way ahead with things like PSLF are those with long residencies (5+ years is helpful) who then take 503(1)c jobs and get forgiveness after a few years as an attending. And those with humongous debt (say, private undergrad, private med school, etc)

Our own @The White Coat Investor has a good article listing the common vendors physicians use to refinance their loans:
Refinance Your Student Loans! | The White Coat Investor - Investing And Personal Finance for Doctors

To the bolded part, I've heard conflicting info about whether PSLF was actually consider taxable income or not. Anyone have a link to a direct source to confirm or deny?

I know employer provided loan assistance is definitely taxed as regular income or as a bonus but because only a handful have actually received PSLF payment now, I'm less confident whether it's taxable or not.
 
i really appreciate all of the helpful advice. I'm going to sign for a year for now and go from there.

A follow up question regarding my loans:

100K of my loans is from private undergrad and grad school. Currently consolidated at 3.75% interest.
185K of my loans is med school. about 18K at 5.0% the rest 6.5% (0.25% interest discount for autopay thru navient)
57K are subsidized, the rest unsubsidized
1. I'm considering refinancing the 185K to get lower interest OR
2. I'm considering staying in REPAYE to avoid interest capitalization and just paying extra to pay them down

Which do you guys think would be a better option?

I'll keep PSLF in the back of my mind and make as many qualifying payments as possible just in case but I don't want to choose a job just based on that.
 
Just wanted to add, if you are considering transferring to the hospital group after your 1 year, make sure your contract doesn't have a noncompete clause.
Regarding the 1350 vs 1500 per shift, there maybe some small print involved. For example, my group takes a % off the top to pay overhead. If I work outside my group, they take a different % off.
There is a noncompete actually. 3 mile radius for 2 years. I'll ask more about this prior to signing. I interviewed with the CMO of the main hospital group. The CMO is who offered me the position and linked me to the president of this hospital group who is contracted to provide hospitalist services for this hospital and have been there since 2003. The hospital is undergoing a merger which began this past November which is why there will be a possibility to be employed by the main hospital group in the near future. So I'm actually not sure how it will all play out and whether the noncompete will matter in this case. This is one of the main reasons I want to sign for a year to keep my options open once I see what exactly I'm dealing with. Despite this, the environment is lovely, the schedule is nice, and the current hospitalists seem really happy. I'm really excited about it.
 
You'll probably qualify for IRB/repaye year after year whether you're private or public. I wouldn't stress about that, and I wouldn't bank on PSLF unless Republicans lose the Congress. I certainly wouldn't make a decision based on PSLF alone. Try to find a place you enjoy and it'll make coming to work easier and fruitful. The money will be there. That 15 patient promise once they hire 5 more is a pipe dream fwiw. Add 3 to 5 on whatever they say from nov-april. Every day 10,000 baby boomers turn 65, right?

I'm fearing that this may be true. The hospital that I'm currently doing residency at (who did offer me a position) touted 12-15 and this morning each team is at 20...
 
To the bolded part, I've heard conflicting info about whether PSLF was actually consider taxable income or not. Anyone have a link to a direct source to confirm or deny?

I know employer provided loan assistance is definitely taxed as regular income or as a bonus but because only a handful have actually received PSLF payment now, I'm less confident whether it's taxable or not.

Specifically says it on the official fedloan.gov website that it’s nontaxable. Other types of non-PSLF forgiveness are taxable though
 
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To the bolded part, I've heard conflicting info about whether PSLF was actually consider taxable income or not. Anyone have a link to a direct source to confirm or deny?

I know employer provided loan assistance is definitely taxed as regular income or as a bonus but because only a handful have actually received PSLF payment now, I'm less confident whether it's taxable or not.

Public Service Loan Forgiveness Questions and Answers

Google is an amazing thing...
 
I'm excited to be close to signing the dotted line of my first contract. I have been out of state for residency and am headed back to Texas. The group I'm signing with is offering a great salary and benefits. But after reading the contract closely and asking for clarification, I've been informed that I'll be working for the 'group contracted by the hospital' and I will be credentialed through the hospital.

My main concern is that this particular hospital is a 501c3. Being employed by the main hospital group will allow me to potentially qualify for multiple student loan repayment programs. Being employed by the group 'contracted by the hospital' will disqualify me from all. The job is lovely concerning scheduling, patient load (in comparison to other places I've interviewed in the region), patient population, part of town. The people that I've interacted with are all quite pleasant. I don't want to make an issue out of a nonissue. Being employed by the main hospital group is not a possibility right now, though in the near future (6 months or so) it will be on the table but my contract will be signed for the private group for at least 1 year by that time.

About the job:
desirable city in Texas (texas is home... desirable for me)
standard 7 on 7 off 182 shifts per year (not round and go)
base 250K plus 40K max in quality and productivity bonuses paid quarterly. According to hospitalists i've spoken with in the group, they average about 7K-8K per quarter in these productivity bonuses.
No nights, no procedures, no codes. closed ICU
Pt census 17-20. admits divided evenly throughout the day (average 2 per day for each team member). Their goal is 15-18 after hiring 5 more by summer
20K sign on bonus and the other perks like moving expenses, CME, licensing fees, etc.

Other jobs in the area have a base that ranges from 200 - 220 on average with larger potentials for productivity bonuses.

Should I be concerned about losing student loan forgiveness and/or repayment eligibility by signing with the private group? Is this a bad deal? I owe about 285K.

If your plan is PSLF, then yes, this is a bad deal. Go get another job where you'll be an employee of a 501(c)3. That should have been your first question, on the phone, long before interviewing.

If you're okay with the alternative plan- i.e. refinancing and paying your loans off, then no big deal. Who cares? You don't need IDR or PSLF to pay these loans off in 2-5 years. You just need to not buy a doctor mansion this year.
 
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I'm not certain which "loan forgivness or repayment options" you are referring to. PSLF would require hiring by a 503c. REPAYE does not.

Using $285K as your balance, $250K as a starting salary, 2% wage increases, 6% interest on your gov't loans, and 3% if you refi, and a household size of 2 (and ignoring 3 years of payments while being a resident):

REPAYE with PSLF: $246K payments over 10 years + $180 loan forgiveness x 32% tax bracket = $304K
REPAYE without PSLF: $481K over 18 years (but smaller payments earlier, which might be helpful if you have other expenses)
Refi at 3%: $320K over 8 years

As mentioned, whether PSLF will really be around in 5+ years is anyone's guess (or they will cap it).

Bottom line: difference is small, not worth losing sleep over. Pinning hopes on PSLF means you'll worry about this for years to come. REPAYE is more costly but takes less out of your paycheck in early years, which might be of some benefit. Salary difference likely wipes out any savings.

As someone with ~300k federal debt, and planning for a 2 year fellowship, wouldn't it make sense to stick with REPAYE + PSLF (since 5 years/10) will be through resideny and fellowship, work at a non-profit for the remaining 5 years, then after, work in private practice?
 
As someone with ~300k federal debt, and planning for a 2 year fellowship, wouldn't it make sense to stick with REPAYE + PSLF (since 5 years/10) will be through resideny and fellowship, work at a non-profit for the remaining 5 years, then after, work in private practice?

Yes that’s correct


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Don't just take their first offer - make sure to negotiate, especially if you're female (I've heard of female physicians straight out of residency being offered 20-30k less than males applying for the same job, with the same education/training/experience. Anecdotal from a couple who applied for hospitalist jobs at the same hospital after residency, but backed up by studies) .
I think Texas hospitals cannot employ physicians directly - they have to be by a group that's contracted, so the only way to qualify for PSLF is to be a public employee at an academic institution.
 
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