How many of you guys are using IBR + PSLF?

[Yadster101]

With the first set of loan forgiveness expected to be given out about 9 months from now, how many of you guys are using IBR with the intention of getting PSLF? Or do you know many fellow residents that are using IBR or IBR + pslf? I know we're all skeptical of the pslf program continuing, but I wanted to get a rough idea of how many people were actually using it.

If you guys could respond with the following format that would be awesome!

1. Are you using IBR?
2. Have you gone out of your way to make decisions (working for a 501c, having only direct loans, making 120 contributions, etc) that would qualify you for pslf?
3. Do you expect to get pslf?
4. How many fellow residents do you know that are doing IBR or IBR + pslf?

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[caffeinemia]

1. Are you using IBR? - yes, cuz I'm poor and full term repayment would be about 2,400 a month. That's pretty much all my discretionary after expenses, and I'm insanely well paid for this level of training.

2. Have you gone out of your way to make decisions (working for a 501c, having only direct loans, making 120 contributions, etc) that would qualify you for pslf? nope. it's specialty dependent, but the differential between private group practice and academic plastic surgery practice is potentially so great, that PSLF is not worth it to me. Even if I satisfy the PSLF requirements and get my loans forgiven, there is a huge 30-40% tax bomb that comes with that. So the real savings are only 60% of the loan balance. And that's after paying what will be full term as an attending for 3-4 years.

The ultra simplified maths:

debt at end of residency = 350,000
loan payments as an attending under PSLF = 36 x 2500 = 90000.
tax bomb from PSLF = ~200,000 x 40% = 80,000

Profit? 350,000 - 90,000 - 80,000 = 200k.

VERSUS

Starting attending salary at academic place where I wanna live = ~250k.
Group practice at place where I wanna live = 300k to 500k.

Comes out pretty even, and I get to be my own boss and potentially make more and don't have to do research.

3. Do you expect to get pslf? Currently registered, don't plan on completing it.

4. How many fellow residents do you know that are doing IBR or IBR + pslf? All of them, except ones with no debt or rich daddies/mommies.

 

[thxleave]

1. Are you using IBR? - yes, cuz I'm poor and full term repayment would be about 2,400 a month. That's pretty much all my discretionary after expenses, and I'm insanely well paid for this level of training.

2. Have you gone out of your way to make decisions (working for a 501c, having only direct loans, making 120 contributions, etc) that would qualify you for pslf? nope. it's specialty dependent, but the differential between private group practice and academic plastic surgery practice is potentially so great, that PSLF is not worth it to me. Even if I satisfy the PSLF requirements and get my loans forgiven, there is a huge 30-40% tax bomb that comes with that. So the real savings are only 60% of the loan balance. And that's after paying what will be full term as an attending for 3-4 years.

The ultra simplified maths:

debt at end of residency = 350,000
loan payments as an attending under PSLF = 36 x 2500 = 90000.
tax bomb from PSLF = ~200,000 x 40% = 80,000

Profit? 350,000 - 90,000 - 80,000 = 200k.

VERSUS

Starting attending salary at academic place where I wanna live = ~250k.
Group practice at place where I wanna live = 300k to 500k.

Comes out pretty even, and I get to be my own boss and potentially make more and don't have to do research.

3. Do you expect to get pslf? Currently registered, don't plan on completing it.

4. How many fellow residents do you know that are doing IBR or IBR + pslf? All of them, except ones with no debt or rich daddies/mommies.

If you don't know what you are even talking about, next time just don't even say anything. PSLF is tax free forgiveness after 120 payments. The one with tax bomb is just straight IBR for 25 years.

PSLF is straight up tax free. For example is you have 500k in student loans, it's valued at 800k since you need to make that much to get 500k take home. That's not even including your 7.2% interest on your student loans from the government 3-4% if you refinance through private sector.

 

[caffeinemia]

If you don't know what you are even talking about, next time just don't even say anything. PSLF is tax free forgiveness after 120 payments. The one with tax bomb is just straight IBR for 25 years.

PSLF is straight up tax free. For example is you have 500k in student loans, it's valued at 800k since you need to make that much to get 500k take home. That's not even including your 7.2% interest on your student loans from the government 3-4% if you refinance through private sector.

I stand corrected. It's tax free. Feel better now?

To OP, the rough math of the added tax-free benefit probably still wouldn't make it better than private practice salary.

 

[Lessisless]

I stand corrected. It's tax free. Feel better now?

To OP, the rough math of the added tax-free benefit probably still wouldn't make it better than private practice salary.

Why don't you leave the adult conversations for the adults. You seem like you fluster and confuse easily.

 

[caffeinemia]

Why don't you leave the adult conversations for the adults. You seem like you fluster and confuse easily.

I'm glad you follow me around like a little pup. Gj babe.

 

[Trogghunter]

It's more worthwhile if you have a large principle of debt and will go into a relatively low paying field...which is what it was indented for (social workers etc who need a masters degree to make 50k a year). Not such a good idea if your salary in academia vs private has greater than a 150k difference, but if your FP/psych/IM/peds or in a low paying subspecialty then it is a good idea.

 

[Ismet]

With the first set of loan forgiveness expected to be given out about 9 months from now, how many of you guys are using IBR with the intention of getting PSLF? Or do you know many fellow residents that are using IBR or IBR + pslf? I know we're all skeptical of the pslf program continuing, but I wanted to get a rough idea of how many people were actually using it.

If you guys could respond with the following format that would be awesome!

1. Are you using IBR?
2. Have you gone out of your way to make decisions (working for a 501c, having only direct loans, making 120 contributions, etc) that would qualify you for pslf?
3. Do you expect to get pslf?
4. How many fellow residents do you know that are doing IBR or IBR + pslf?

1. Absolutely. Before my IBR kicked in (PAYE), my first bill was going to be around $3,400. Now it's just under $300/month which is more than manageable.
2. I haven't really gone out of my way, but when I was applying to residencies I made sure the places I was applying to weren't "for-profit." I'm in a 3 year residency at a qualifying institution so by graduation I'll be roughly 2.5 years into the 10 years of payments.
3. I don't have high expectations for it still being around in the same capacity in 10 years, but if it is still around, then most likely yes. I'm in a relatively low-paying field and my med school was pretty expensive, so I'm not sure I'd be able to pay off the whole debt load in that time. If it's not around then I'm sure I'd pay it off before the 25 year tax bomb of PAYE.
4. Pretty much everyone I know.

 

[mvenus929]

1. Are you using IBR?
2. Have you gone out of your way to make decisions (working for a 501c, having only direct loans, making 120 contributions, etc) that would qualify you for pslf?
3. Do you expect to get pslf?
4. How many fellow residents do you know that are doing IBR or IBR + pslf?

1. I'm using PAYE, which is one of the income based repayment options.
2. No. It's going to work out that between residency and fellowship, I'll have 7 years of qualifying institutions.
3. Not really. I'll feel out the climate for the next several years, but if it doesn't seem worth it, I'll just aggressively pay down my loans once I'm an attending. Despite being in a low paying field, the salaries I've seen are more than enough to pay for my loans well before the 25 year mark.
4. Pretty sure all of them are doing IBR unless they didn't take out federal loans (we have a handful of IMGs in our program). I'm not sure how many are counting on PSLF, but it occasionally comes up when we discuss financial matters. Several residents are very paranoid about the proof of employment forms, filling them out every year. I've yet to fill it out, and I'll have my coordinator do it after I graduate.

 

[Yadster101]

1. Absolutely. Before my IBR kicked in (PAYE), my first bill was going to be around $3,400. Now it's just under $300/month which is more than manageable.
I.

So approximately how much was your debt if your bill was going to be around $3400?

 

[Ismet]

So approximately how much was your debt if your bill was going to be around $3400?

Over $300,000 with med school and undergrad combined.

 

[Yadster101]

Over $300,000 with med school and undergrad combined.

Wait so just to clarify, do all residents that have taken government loans qualify for IBR or do they have to demonstrate financial hardship? For example let's say we have three residents all making 50k/yr. If one has 30k debt, the other 120k, and the third 300k do they all qualify for ibr?

What about an attending as their debt goes down and salary goes up? Does a doctor with 60k debt and 250k salary qualify?

 

[Ismet]

Wait so just to clarify, do all residents that have taken government loans qualify for IBR or do they have to demonstrate financial hardship? For example let's say we have three residents all making 50k/yr. If one has 30k debt, the other 120k, and the third 300k do they all qualify for ibr?

What about an attending as their debt goes down and salary goes up? Does a doctor with 60k debt and 250k salary qualify?

Any borrower of eligible federal student loans (pretty much any loan other than parent loans I think) would qualify for REPAYE. For IBR and PAYE, you have to have what's called a "partial financial hardship" which means that the amount you'd be expected to pay in a 10-year repayment plan exceeds 15% of your discretionary income (the difference between your adjusted gross income and 150% of the poverty line). You can calculate that all out for your above scenarios if you want, but I'm pretty sure they would all qualify.

I'm not 100% certain on this, but I think if at any time your monthly payment in IBR/PAYE/etc would be greater than your payment on the standard 10 year repayment plan, then you would switch to the 10 year payment plan.

As salary goes up, your monthly payment goes up. That's the income-based part.

 

[mvenus929]

I'm not 100% certain on this, but I think if at any time your monthly payment in IBR/PAYE/etc would be greater than your payment on the standard 10 year repayment plan, then you would switch to the 10 year payment plan.

As salary goes up, your monthly payment goes up. That's the income-based part.

IBR is 15% and PAYE is 10%.

And if you make enough to hit the standard repayment, they don't switch plans on you, they just cap your payment. And you're less likely to qualify for PSLF because you're more likely to pay off your debt in 10 years. In REPAYE, they don't cap your payment.

 

[Bonferroni Correction]

Is there a way to see on a GME website if they are non-profit or not?

I've heard some residents have gotten screwed bc they work for a non-profit hospital but are paid by a private group... is that a real thing or just an urban legend?

 

[mvenus929]

Is there a way to see on a GME website if they are non-profit or not?

I've heard some residents have gotten screwed bc they work for a non-profit hospital but are paid by a private group... is that a real thing or just an urban legend?

This is true for attendings. Most of the attendings in my non profit hospital are paid by a private group and don't qualify for PSLF. Our residents are paid by the Med school, though, which does qualify. I feel that this is a reasonable question to ask the PC, but I don't know of any programs off hand that are employed by a for profit group.