Guard / Reserves Payment of Student Loans

[whitecoatoneday]

Hi there. Crazy to be posting this as a physician ... last time I posted in SDN I was still looking to get into school.

Anyhow, I am applying to the match as we speak (EM!) and have a question regarding the reserves tuition repayment strategies. After my discussion with the health fields recruiter, I have been told (and others have confirmed): 1. Monthly stipend while in residency. 2. 40k per year towards loans for each year AFTER residency (i.e. three year residency, requires six years in reserves, equals 240k total towards school loans). 3. Regular reserve pay for appropriate pay grade after residency.

Question is: Will the reserves pay student loans which have been refinanced (and are thus considered private educational loans)? Or do they only pay official government loans only?

Although I appreciate any help or knowledge in the matter, ideally this would be answered by someone who has considered refinancing before residency with intent of having the loans payed off by the reserves, or guard. I don't want to shoot myself in the foot by refinancing and then not having the ability to utilize reserves repayment because of who owns the loan. Thanks in advance!

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[notdeadyet]

1-3 are correct.

Regarding refinancing, I have heard mixed messages on this. On one hand, I've heard that you can get recouped for the original amount of loans that are refinanced, providing they were initially direct government loans. I've also heard that you are ineligible for HPLRP once your loans are privately financed.

Given the way things often work with the military, I am taking the hit on not refinancing the loans for the sake of HPLRP being paid out without hiccups, which I've been doing without issue for several years.

 

[whitecoatoneday]

1-3 are correct.

Regarding refinancing, I have heard mixed messages on this. On one hand, I've heard that you can get recouped for the original amount of loans that are refinanced, providing they were initially direct government loans. I've also heard that you are ineligible for HPLRP once your loans are privately financed.

Given the way things often work with the military, I am taking the hit on not refinancing the loans for the sake of HPLRP being paid out without hiccups, which I've been doing without issue for several years.

Thank you for that! So are the loan repayment monies distributed directly to you and then you pay the lender or does it go direct to the lender? Thanks!

 

[notdeadyet]

Direct to lender, with 25% taxes already taken out.

 

[whitecoatoneday]

Notdeadyet, thank you for the information I really appreciate it.

 

[rottenba]

Yes also agree on mixed messages for any refinancing. Certainly the safest way is to not refinance but it is possible the appropriate loans may be paid after refinancing. Keep in mind that each program - STRAP for residency stipend and HPLRP for loan repayment have significant obligations for years of service. Certainly they are great programs (I took STRAP and am halfway through HPLRP), but STRAP is a 2:1 payback and HPLRP is a 1:1 payback and you cannot serve paybacks at the same time. They do overlap your original commission obligation. So if you commission at the start of residency, start STRAP you would then be able to HPRLP during PGY-3. This start 6 years of HPLRP (assuming you take the full amount) THEN you pay back the 6 years you accumulated for STRAP, so likely can end up with roughly a 14 year obligation (2 years serving + 6 years HPLRP + 6 years STRAP payback). Once again great programs and certainly appropriate if you are looking for a long term military career.

 

[whitecoatoneday]

Rottenba I am a bit confused now ... If I commission first day of intern year, and they give me the monthly stipend (STRAP) for three years, I receive a six year Reserves commitment following graduation.

But the repayment itself is different ???? (HPLRP), and incurs its own and separate service obligation of an additional one year obligation, per year of loan repayment?

What are the other two years you mentioned?

Lastly, must I sign for all years at once? i.e can I do two years during residency of STRAP and pass on doing the third, and then lets say get two years of HPLRP and then just have two years incured or is it all or nothing? Thanks for the help!

 

[notdeadyet]

rottenba's explanation is a bit confusing because he makes HPLRP sound like you incur payback like STRAP, which isn't really true. With HPLRP, you sign a form, and if you're still around a year later, you submit loan info and they pay off roughly $30K of your debt ($40K total, but roughly $10K gets held for taxes). It's more accurate to think of HPLRP as a "retention bonus" towards your student year for each year you stay in. If you sign up for HPLRP on 01/15/2018, you can quit the Army 3 months later on 03/15/2018 and there are no consequences, but you won't get the HPLRP "retention bonus." Make sense?

So in your example: you have 3 years of residency you are taking STRAP (which incurs a 6 year payback). You can also take a year of HPLRP during your PGY-3 year.

Once you graduate residency, you have a decision: you can start your payback for STRAP (and start burning through the 6 year payback) OR you can take HPLRP. You can sign the form and get the HPLRP "retention bonus" a year later, but since that year was an HPLRP year, it doesn't count towards payback.

So when you graduate residency, you need to determine two things: how much do I enjoy the Army and how much do I want to pay back student loans?

If you REALLY don't like the Army, don't take HPLRP and just burn through your HPLRP. You have 6 years to burn through. If you change your mind and start enjoying the Army, you can take HPLRP at any time later. But as soon as you take it, that's a years that doesn't count towards STRAP payback.

If you enjoy the Army, take HPLRP for the 5 years (or however long you need it for student loans). When you're done, you can start paying back your 6 year STRAP obligation.

People tend to jump on HPLRP right after residency, but that's just to maximize student loan repayment and minimize interest. If you're at all ambivalent about the Army, I'd focus on paying back that 6 years HPLRP.

Let me know if you have any questions.

 

[whitecoatoneday]

Thanks for the clarification ... that helps - I appreciate both of yall's comments. I guess my only other question is whether these benefits vary between branches? I am prior service Air Force (enlisted). Additionally, for someone coming out of medical school now and about to match (Lord willing!) and starting residency in a few months .... are there any different recommendations on route to take utilizing non active duty military means to support me in residency and assist in the loan repayment down the line?

Again, thanks for the help!

 

[USCguy]

If you haven’t already done it, I wouldn’t take the chance on refinancing. I can’t inagine the headaches that would come from some E6 incentives guy with ZERO medical/professional school experience trying to process your 2575 (I think that’s what it is) paperwork and your NSLDS data set. I had an issue last year when the loan company sold my loans to a different servicer; took 7 months to get straightened out. Between “drop days”, “schools”, etc; seems like AGR types are not in the office very often

If you don’t want to extend your commitment, start STRAP later in residency. I started strap in January of intern year and incurred 5 year payback. My thought was that the STRAP payback would end at the same time as my MSO.

However, I discovered the option of HPLR while I was a resident so I signed up for that too. My initial plan was just to take it that one year (my third year of residency) and immediately start strap payback after residency graduation. The incentives guy lost my paperwork at the beginning of third year so I didn’t start my “1 year for $40k” until November. It was nice to see that balance drop so I stayed in the program. I took my final payment a few months ago; then paid off the small balance today. Feels good to have that paid off. Now I have to figure out how to get back on the STRAP payback train.

Like Notdeadyet said, about HPLR, you actually pay them a year upfront and collect your money at the end of that year.

Being able to take HPLR in year three and beyond of residency is probably a good deal for the surgical types that already have a ~12 year payback coming out of their 6 year residency

 

[deleted480308]

If you haven’t already done it, I wouldn’t take the chance on refinancing. I can’t inagine the headaches that would come from some E6 incentives guy with ZERO medical/professional school experience trying to process your 2575 (I think that’s what it is) paperwork and your NSLDS data set. I had an issue last year when the loan company sold my loans to a different servicer; took 7 months to get straightened out. Between “drop days”, “schools”, etc; seems like AGR types are not in the office very often

If you don’t want to extend your commitment, start STRAP later in residency. I started strap in January of intern year and incurred 5 year payback. My thought was that the STRAP payback would end at the same time as my MSO.

However, I discovered the option of HPLR while I was a resident so I signed up for that too. My initial plan was just to take it that one year (my third year of residency) and immediately start strap payback after residency graduation. The incentives guy lost my paperwork at the beginning of third year so I didn’t start my “1 year for $40k” until November. It was nice to see that balance drop so I stayed in the program. I took my final payment a few months ago; then paid off the small balance today. Feels good to have that paid off. Now I have to figure out how to get back on the STRAP payback train.

Like Notdeadyet said, about HPLR, you actually pay them a year upfront and collect your money at the end of that year.

Being able to take HPLR in year three and beyond of residency is probably a good deal for the surgical types that already have a ~12 year payback coming out of their 6 year residency

Did you defer during residency? Or can you still ibr/paye without consolidating?

 

[USCguy]

Did you defer during residency? Or can you still ibr/paye without consolidating?

I deferred during residency

 

[whitecoatoneday]

Thanks for the great replies! I believe I am going to wait to refinance ... just not worth the risk at this point. Thank y’all!

 

[NG_SpecialBranchRecruiter]

Hi there. Crazy to be posting this as a physician ... last time I posted in SDN I was still looking to get into school.

Anyhow, I am applying to the match as we speak (EM!) and have a question regarding the reserves tuition repayment strategies. After my discussion with the health fields recruiter, I have been told (and others have confirmed): 1. Monthly stipend while in residency. 2. 40k per year towards loans for each year AFTER residency (i.e. three year residency, requires six years in reserves, equals 240k total towards school loans). 3. Regular reserve pay for appropriate pay grade after residency.

Question is: Will the reserves pay student loans which have been refinanced (and are thus considered private educational loans)? Or do they only pay official government loans only?

Although I appreciate any help or knowledge in the matter, ideally this would be answered by someone who has considered refinancing before residency with intent of having the loans payed off by the reserves, or guard. I don't want to shoot myself in the foot by refinancing and then not having the ability to utilize reserves repayment because of who owns the loan. Thanks in advance!

Good questions.

The reserves and guard both offer STRAP. It currently pays $2,270 per month.

Health care loan repayment is available and pays $40k per year directly to the company servicing your loan. $40k is the pre-tax amount and is currently federally taxed at 22%.

You can sign up for loan repayment after your second year of residency and should receive your first payment At the end of that year.

HPLRP will pay multiple types of loans to include federal loans and private loans. The caution in consolidating your loans is that if you combine loans that were used to pay for undergrad or a non medical degree with medical school loans, the army might not pay out. The Reason is because HPLRP can only pay loans used to earn the qualifying medical degree. If they can’t determine which loans paid for which degree they won’t pay at all.

 

[nash1991]

If you haven’t already done it, I wouldn’t take the chance on refinancing. I can’t inagine the headaches that would come from some E6 incentives guy with ZERO medical/professional school experience trying to process your 2575 (I think that’s what it is) paperwork and your NSLDS data set. I had an issue last year when the loan company sold my loans to a different servicer; took 7 months to get straightened out. Between “drop days”, “schools”, etc; seems like AGR types are not in the office very often

If you don’t want to extend your commitment, start STRAP later in residency. I started strap in January of intern year and incurred 5 year payback. My thought was that the STRAP payback would end at the same time as my MSO.

However, I discovered the option of HPLR while I was a resident so I signed up for that too. My initial plan was just to take it that one year (my third year of residency) and immediately start strap payback after residency graduation. The incentives guy lost my paperwork at the beginning of third year so I didn’t start my “1 year for $40k” until November. It was nice to see that balance drop so I stayed in the program. I took my final payment a few months ago; then paid off the small balance today. Feels good to have that paid off. Now I have to figure out how to get back on the STRAP payback train.

Like Notdeadyet said, about HPLR, you actually pay them a year upfront and collect your money at the end of that year.

Being able to take HPLR in year three and beyond of residency is probably a good deal for the surgical types that already have a ~12 year payback coming out of their 6 year residency

Since you are in the STRAP program, I have a question for you if you don't mind. I have been trying to find an answer but haven't really been successful so far. While in the Reserves, after residency, when you start paying back the STRAP payback, how often does the 90 day deployment really happen? And is it really 90 days or do they deploy more? Also, do you get any choice over where you might be deployed or you go wherever they tell you to? I am interested in STRAP ( starting PGY-1 this June) but still on the fence due to the 90 day deployment possibility affecting family and professional life if it is too frequent.

 

[notdeadyet]

These are easy questions and not STRAP specific....

Frequency of deployments? What time is it? Historically, after Vietnam and before 9/11 the involuntary activation/deployment of Army Reserve docs was next to nil. During the heavy tempo of OEF/OIF, some docs were deployed every few years. I have heard stories of as frequently as every two years, but the only cases I've seen this of involved voluntary deployments. More typically, ARNG/AR docs were getting deployed q3-4 years.

Length of deployment? 90 days is per policy. But an additional 30 days can be used in total for pre/post deployment, so plan on being away as long as 120 days when you're deployed. This is policy, meaning if Korea or China kicks off and it's WWIII, that could be changed with the stroke of a pen.

Can you choose where you get deployed? Not for other-than-voluntary mobilizations. You'll go where you're told.

I will say that the ARNG gets deployed typically to combat deployments and the Army Reserve is more typically deployed to back-fill domestic slots. The reason I say that is that the glass has been broken on the hesitancy to activate Reservists and while the tempo for deploying Guard docs seems to be slowing, I still have lots of Reserve friends getting activated for Fort Hood and the like. My hunch would be that the AR will continue to get activated during peacetime whereas it's less likely on the ARNG side. That said, if you do get deployed, it's likely more likely to be a combat zone if you're ARNG vs. AR. So pick your poison.

And don't join unless you're willing and able to deploy. The gig isn't worth it if you're not.

 

[nash1991]

These are easy questions and not STRAP specific....

Frequency of deployments? What time is it? Historically, after Vietnam and before 9/11 the involuntary activation/deployment of Army Reserve docs was next to nil. During the heavy tempo of OEF/OIF, some docs were deployed every few years. I have heard stories of as frequently as every two years, but the only cases I've seen this of involved voluntary deployments. More typically, ARNG/AR docs were getting deployed q3-4 years.

Length of deployment? 90 days is per policy. But an additional 30 days can be used in total for pre/post deployment, so plan on being away as long as 120 days when you're deployed. This is policy, meaning if Korea or China kicks off and it's WWIII, that could be changed with the stroke of a pen.

Can you choose where you get deployed? Not for other-than-voluntary mobilizations. You'll go where you're told.

I will say that the ARNG gets deployed typically to combat deployments and the Army Reserve is more typically deployed to back-fill domestic slots. The reason I say that is that the glass has been broken on the hesitancy to activate Reservists and while the tempo for deploying Guard docs seems to be slowing, I still have lots of Reserve friends getting activated for Fort Hood and the like. My hunch would be that the AR will continue to get activated during peacetime whereas it's less likely on the ARNG side. That said, if you do get deployed, it's likely more likely to be a combat zone if you're ARNG vs. AR. So pick your poison.

And don't join unless you're willing and able to deploy. The gig isn't worth it if you're not.

Thank you for the reply! I personally don't mind deploying but the missus is having apprehensions... so I suppose it'll come down to how she's feeling about it haha.

 

[nash1991]

These are easy questions and not STRAP specific....

Frequency of deployments? What time is it? Historically, after Vietnam and before 9/11 the involuntary activation/deployment of Army Reserve docs was next to nil. During the heavy tempo of OEF/OIF, some docs were deployed every few years. I have heard stories of as frequently as every two years, but the only cases I've seen this of involved voluntary deployments. More typically, ARNG/AR docs were getting deployed q3-4 years.

Length of deployment? 90 days is per policy. But an additional 30 days can be used in total for pre/post deployment, so plan on being away as long as 120 days when you're deployed. This is policy, meaning if Korea or China kicks off and it's WWIII, that could be changed with the stroke of a pen.

Can you choose where you get deployed? Not for other-than-voluntary mobilizations. You'll go where you're told.

I will say that the ARNG gets deployed typically to combat deployments and the Army Reserve is more typically deployed to back-fill domestic slots. The reason I say that is that the glass has been broken on the hesitancy to activate Reservists and while the tempo for deploying Guard docs seems to be slowing, I still have lots of Reserve friends getting activated for Fort Hood and the like. My hunch would be that the AR will continue to get activated during peacetime whereas it's less likely on the ARNG side. That said, if you do get deployed, it's likely more likely to be a combat zone if you're ARNG vs. AR. So pick your poison.

And don't join unless you're willing and able to deploy. The gig isn't worth it if you're not.

I have another question for you if you don't mind. I personally don't mind deploying at all and have actually wanted to serve in the military in some capacity for a while. Was actually going to go in for Tank Commander training before med school but then decided agaibag it because of med school haha. Anyways, say if the wife is down for this and I actually end up doing STRAP, I realize I won't be able to work at small practices or obviously not solo but are jobs with big practices or hospitals that will take a reservist hard to find? Or will I be able to find a job with a big practice or hospital without too much issue? That employment aspect is the only big apprehension I have currently. Let me know if you have any insights in this matter, being further along than I am.

 

[TheEarDoc]

I have another question for you if you don't mind. I personally don't mind deploying at all and have actually wanted to serve in the military in some capacity for a while. Was actually going to go in for Tank Commander training before med school but then decided agaibag it because of med school haha. Anyways, say if the wife is down for this and I actually end up doing STRAP, I realize I won't be able to work at small practices or obviously not solo but are jobs with big practices or hospitals that will take a reservist hard to find? Or will I be able to find a job with a big practice or hospital without too much issue? That employment aspect is the only big apprehension I have currently. Let me know if you have any insights in this matter, being further along than I am.

Go for a VA gig. They will give you the least issue with military leave. You actually get a large amount of paid military leave per year as a VA employee

 

[nash1991]

Go for a VA gig. They will give you the least issue with military leave. You actually get a large amount of paid military leave per year as a VA employee

So if I end up doing the STRAP, you're saying it wont be a huge issue if I work for a VA hospital. I don't mind that as long as the pay is comparable overall. I'll have to look into it. Thank you!

 

[TheEarDoc]

So if I end up doing the STRAP, you're saying it wont be a huge issue if I work for a VA hospital. I don't mind that as long as the pay is comparable overall. I'll have to look into it. Thank you!

Basically when it comes to working full time and being in the guard or the reserves, the VA is the best gig for that. You get a pretty large amount of paid military leave per year and they are the most likely to actually follow the deployment job protection laws.

 

[nash1991]

Basically when it comes to working full time and being in the guard or the reserves, the VA is the best gig for that. You get a pretty large amount of paid military leave per year and they are the most likely to actually follow the deployment job protection laws.

Thank you so much, that alleviates quite a bit of my apprehension!

 

[USCguy]

I work in a medium size practice (4 docs, 4 NPs). Small town. People really support the military. I haven’t had any issues per se with training obligations as people are generally supportive of what I’m doing.

In a different locale, you might have a different experience.

120 days away from your practice is going to hurt in someway no matter where or what you are doing. Something to consider when looking at jobs (will you get your base pay rate or some sort of pay guarantee while activated/deployed). The army pay doesn’t come close to my usually pay from my civilian job

 

[notdeadyet]

The VA is better than a lot of private employers for reservists, but I wouldn't necessarily assume they are the best.

I get 15 days of military leave, which I typically meet or exceed (with lots of MUTA-6, AT, training, and overage). Before I took a VA job, there were state jobs offering 30 days of military leave.

I love working at the VA, but if your reserve status, I'd ask the question everywhere you'd consider working. You might be surprised at what's out there.

 

[TheEarDoc]

I work in a medium size practice (4 docs, 4 NPs). Small town. People really support the military. I haven’t had any issues per se with training obligations as people are generally supportive of what I’m doing.

In a different locale, you might have a different experience.

120 days away from your practice is going to hurt in someway no matter where or what you are doing. Something to consider when looking at jobs (will you get your base pay rate or some sort of pay guarantee while activated/deployed). The army pay doesn’t come close to my usually pay from my civilian job

Do you not get any incentive/endorsement pay to make up the difference for your civilian salary and your military salary?

 

[TheEarDoc]

The VA is better than a lot of private employers for reservists, but I wouldn't necessarily assume they are the best.

I get 15 days of military leave, which I typically meet or exceed (with lots of MUTA-6, AT, training, and overage). Before I took a VA job, there were state jobs offering 30 days of military leave.

I love working at the VA, but if your reserve status, I'd ask the question everywhere you'd consider working. You might be surprised at what's out there.

If you are going guard then yeah I would try and get a state job working in the same state as your guard unit is then you get a lot of perks. If you're going reserves then many states only give those nice perks to their NG units for their state so then the VA is still one of the better gigs.

 

[notdeadyet]

If you are going guard then yeah I would try and get a state job working in the same state as your guard unit is then you get a lot of perks. If you're going reserves then many states only give those nice perks to their NG units for their state so then the VA is still one of the better gigs.

With the job offers I looked at, places talked about Military Leave. I never saw any that distinguished between National Guard and Reserve (and most employers wouldn't know the difference anyway). The state jobs I looked at with 30 days leave didn't have any clause about ARNG vs. AR and I've never heard of any that did.

 

[TheEarDoc]

With the job offers I looked at, places talked about Military Leave. I never saw any that distinguished between National Guard and Reserve (and most employers wouldn't know the difference anyway). The state jobs I looked at with 30 days leave didn't have any clause about ARNG vs. AR and I've never heard of any that did.

I'm meaning state jobs. Many of them gave a little better perks to NG members in their state. A lot of times it meant paid military leave (double dipping) vs. unpaid military leave.

 

[USCguy]

Do you not get any incentive/endorsement pay to make up the difference for your civilian salary and your military salary?

The way my current contract is structured, I get 25 days of PTO per year (which rolls over year after year). Military leave is currently uncompensated above those 25 days (except whatever productivity money in due from the prior quarter). So let’s say I was sent to Syria for 90 days beginning tomorrow, I would exhaust my PTO and then I would only receive whatever productivity bonus I earned last quarter but no base salary (which for me, my productivity is about 1.5x more than my base anyway). Since I wouldn’t be working this quarter, when I came back and went back to work, my paychecks would only be my base pay rate since I didn’t earn any productivity while in deployed.

That’s why I say it is something to think about when structuring contracts. I will be changing this in my next contract to get my base salary anytime I’m deployed/mobilized irregardless of my army pay. Again, market forces dictate how much you get what you want in a negotiation.

 

[TheEarDoc]

The way my current contract is structured, I get 25 days of PTO per year (which rolls over year after year). Military leave is currently uncompensated above those 25 days (except whatever productivity money in due from the prior quarter). So let’s say I was sent to Syria for 90 days beginning tomorrow, I would exhaust my PTO and then I would only receive whatever productivity bonus I earned last quarter but no base salary (which for me, my productivity is about 1.5x more than my base anyway). Since I wouldn’t be working this quarter, when I came back and went back to work, my paychecks would only be my base pay rate since I didn’t earn any productivity while in deployed.

That’s why I say it is something to think about when structuring contracts. I will be changing this in my next contract to get my base salary anytime I’m deployed/mobilized irregardless of my army pay. Again, market forces dictate how much you get what you want in a negotiation.

Ah I see. Again one of the perks of VA job as a reservist. No bonus (well you can get a bonus, but good luck with that....) so your base pay is your base pay is your base pay. So incentive pay is not so difficult. I know I worked at a few offices that gave a base salary and then bonuses for hearing aid sales, RVU generation. etc., but I always chose the straight salary because I always like to know what I am getting up front with no games involved.

Sounds like you definitely know what you need to ask for next time around.