IBR and public service eligibility

[illegallysmooth]

I just read this from a fin aid website:
If your income increases to the point where you no longer have a partial financial hardship, any unpaid interest that has accumulated would be capitalized, (added to your total loan balance). You can still stay in IBR, and your payments will be capped at the 10-year standard monthly payment on the balance you owed when you first entered repayment on the loan. You will never be "kicked out" of IBR based on your income. Here's a calculator to find out what that 10-year standard payment would be. )


I'm hoping someone can help me with this. Do all physicians working at not-for-profit hospitals and clinics qualify as "public service jobs?"

Obviously, once out of residency the payments will increase, but they are capped at the 10-yr-standard payment. Once out of residency and making 6 figures, do you still qualify for loan forgiveness at the 10 year point if you have worked public service positions for the entire period (but owed like 340k at graduation)?

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[IDforMe]

I just read this from a fin aid website:
If your income increases to the point where you no longer have a partial financial hardship, any unpaid interest that has accumulated would be capitalized, (added to your total loan balance). You can still stay in IBR, and your payments will be capped at the 10-year standard monthly payment on the balance you owed when you first entered repayment on the loan. You will never be "kicked out" of IBR based on your income. Here's a calculator to find out what that 10-year standard payment would be. )


I'm hoping someone can help me with this. Do all physicians working at not-for-profit hospitals and clinics qualify as "public service jobs?"

Obviously, once out of residency the payments will increase, but they are capped at the 10-yr-standard payment. Once out of residency and making 6 figures, do you still qualify for loan forgiveness at the 10 year point if you have worked public service positions for the entire period (but owed like 340k at graduation)?

According to the person who spoke to our class for graduation financial aid exit interviews, most people training at an academic medical center for residency/fellowship will be paid by not-for profit branches of these institutions. Once you are an attending at the same institution, however, you will most likely be paid from a for-profit branch, so would not get credit for public service. The speaker said his information was based off of communication with the AMA, but I don't have any firm info other than this to offer you.

Additionally, I don't know of any caps on forgiveness, and the loan payoff is not taxed (thank god!) once you've racked up your 120 payments while working full time for a not-for profit. The payments also do not need to be consecutive, but doubling $ one month won't count as more than one payment (probably to make sure you spend a full 10 years working in a qualifying position).

Hope this helps.

 

[DrBowtie]

Aside from academic hospitals, don't most non-profits contract with private groups rather than hiring them directly on staff? That wouldn't count correct?

 

[illegallysmooth]

It seems the key here is staying with eligible employers if you want to qualify for the public service program. On the AMA release regarding IBR, I read that private organizations can qualify if they provide public health services. So, if you're part of a private, contracted group but they also provide some public health services, it could qualify.

 

[Phlame217]

All that matters is the public service part, doesn't matter if the organization if for-profit or not-for-profit. I had this verified by the staff at my soon-to-be school. Now when defining public service, the line gets blurred, but a clear cut example would be an emergency medicine physician working at a for-profit hospital. The 4-5 year residency counts towards the 10 years, then the next 5-6 years of attending will finish off the 10 year rule.

Additionally, I don't know of any caps on forgiveness, and the loan payoff is not taxed (thank god!)

Sorry to be to the contrary, but everything i understand says it is taxable. It is taxed according to income so you do pay income tax on the gift, but its only the one year.

 

[illegallysmooth]

All that matters is the public service part, doesn't matter if the organization if for-profit or not-for-profit. I had this verified by the staff at my soon-to-be school. Now when defining public service, the line gets blurred, but a clear cut example would be an emergency medicine physician working at a for-profit hospital. The 4-5 year residency counts towards the 10 years, then the next 5-6 years of attending will finish off the 10 year rule.


Sorry to be to the contrary, but everything i understand says it is taxable. It is taxed according to income so you do pay income tax on the gift, but its only the one year.[/QUOTE]

There's some confusion here. The 10-year loan forgiveness with public service jobs is NOT taxed, but the 25-year loan forgiveness (non public service) IS taxed.

In regard to what you said earlier, can you confirm you're saying an EM physician at a for-profit hospital WOULD count as public service? Because, seriously, don't toy with my heart.

 

[nontrdgsbuiucmd]

ditto above re: what I've read. And I've read this stuff very, very carefully in the federal register where the rules were initially posted.

There's "talk" about changing a few aspects of IBR, one is the "forgiveness" portion if you do the 25 yr route versus the 10 yr not-for-profit route; right now the 25 yr route loan forgiven is taxable, although any extra $$ owed if you do the 10 yr route (work for a not-for-profit and make on-time payments each month for 120 months).

One note of interest -- the not-for-profit, 10 yr route, requires 30+ hrs per week. So if you're doing 40 hrs at one place and another 30 at a not-for-profit, would that qualify you for the 10 yr paid-off plan? food for thought.

 

[illegallysmooth]

ditto above re: what I've read. And I've read this stuff very, very carefully in the federal register where the rules were initially posted.

There's "talk" about changing a few aspects of IBR, one is the "forgiveness" portion if you do the 25 yr route versus the 10 yr not-for-profit route; right now the 25 yr route loan forgiven is taxable, although any extra $$ owed if you do the 10 yr route (work for a not-for-profit and make on-time payments each month for 120 months).

One note of interest -- the not-for-profit, 10 yr route, requires 30+ hrs per week. So if you're doing 40 hrs at one place and another 30 at a not-for-profit, would that qualify you for the 10 yr paid-off plan? food for thought.

I don't really understand what you're saying here. What does the "talk" have to do with? How would the forgiveness be changed? I don't understand the above bolded statement. Did you leave our a word accidentally?

As far as the working hours goes, I think the requirement is that you must be full time at a not-for-profit. I don't believe it matters where else you work. But know that if you're working 70 hrs/week, you're going to be making a lot of money and your IBR monthly payments will reflect that.

 

[Phlame217]

All that matters is the public service part, doesn't matter if the organization if for-profit or not-for-profit. I had this verified by the staff at my soon-to-be school. Now when defining public service, the line gets blurred, but a clear cut example would be an emergency medicine physician working at a for-profit hospital. The 4-5 year residency counts towards the 10 years, then the next 5-6 years of attending will finish off the 10 year rule.


Sorry to be to the contrary, but everything i understand says it is taxable. It is taxed according to income so you do pay income tax on the gift, but its only the one year.

There's some confusion here. The 10-year loan forgiveness with public service jobs is NOT taxed, but the 25-year loan forgiveness (non public service) IS taxed.

In regard to what you said earlier, can you confirm you're saying an EM physician at a for-profit hospital WOULD count as public service? Because, seriously, don't toy with my heart.

Yes, OSU-COM does part of their EM residency program at a hospital that is for-profit and they said if I elected that route, I would still qualify for forgiveness.

 

[december07]

Yes, OSU-COM does part of their EM residency program at a hospital that is for-profit and they said if I elected that route, I would still qualify for forgiveness.

IF you are refering to the 4 yrs in residency at a FOR-PROFIT hospital counts toward the 10 years, then I agree. But if you're saying that an ATTENDING working at the same hospital for another 6 yr and is not qualified for the 10 yr forgiveness... that's questionable.

What makes an EM attending physician at a FOR-PROFIT hospital qualify for this deal, while a Cards or GI doc do not?

From what I understand is, you have to be employed by a non-profit facility. And in the case of EM physicians, that will NEVER happens. 99% of EM physicians are contractors by private groups and never employed by the hospital.

Now, I hope that I'm completely wrong here!!! cause EM is my path! and if my loans are forgiven after 10 yrs, that would be a miracle!

 

[rbnsafsadgf]

I am very interested in what will actually qualify for public service. I hope the Feds will clarify the rules soon.

If residency qualifies as public service (non-profit employment), this makes doing a fellowship much more appealing, since it appears that would qualify.

Also, I am so glad that they are trying to change over to all Direct Loans (since only Direct Loans qualify) for the IBR/Public Service cancellation.

 

[illegallysmooth]

IF you are refering to the 4 yrs in residency at a FOR-PROFIT hospital counts toward the 10 years, then I agree. But if you're saying that an ATTENDING working at the same hospital for another 6 yr and is not qualified for the 10 yr forgiveness... that's questionable.

What makes an EM attending physician at a FOR-PROFIT hospital qualify for this deal, while a Cards or GI doc do not?

From what I understand is, you have to be employed by a non-profit facility. And in the case of EM physicians, that will NEVER happens. 99% of EM physicians are contractors by private groups and never employed by the hospital.

Now, I hope that I'm completely wrong here!!! cause EM is my path! and if my loans are forgiven after 10 yrs, that would be a miracle!

If you are employed by a not-for-profit company, you would almost certainly qualify. However, I remember reading that if you are employed by a for-profit company that provides a public health service, you can also qualify. I'm not sure about this though, it doesn't seem clear. I sure wish there were better guidelines published...it's sort of important.


The CCRAA defines a public service job as follows: A full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education (including early childhood education), social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization), public child care, public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; or Teaching as a full-time faculty member at a Tribal College or University as defined in section 316(b) and other faculty teaching in high-needs areas, as determined by the Secretary.