IBR tax returns, and forbearance

[da8s0859q]

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Was hoping the SDNers who know more about these things than I could clarify.

1. About IBR, is it required that we actually have filed a tax return? Seeing as how I wasn't employed by my med school, I don't think I even need to file. Have seen conflicting info on this.

2. Including interest, I'm in the high $100k range on Stafford loans. Matched into EM, three years (not four), no plans on fellowship. That said, is IBR still the best approach because I'd pay $0 through PGY1, ~$200/mo through PGY2, and ~$400 through PGY3, or would forbearance to avoid the additional hardship in residency, at the expense of interest capitalization, be "better"?

Been tricky to make heads or tails of the whole thing.

 

[BB8730]

Check out this thread for your second question:

http://forums.studentdoctor.net/showthread.php?t=995140

 

[RangerBob]

I don't think $0 payments during PGY1 or lower payments in PGY2 (due to half a year's salary on your tax return for your PGY1 year) are possible anymore. I'm applying for IBR/PAYE for one loan that will start repayment right after graduation, and while you do enter your tax info, there is a questions that asks if your AGI from that tax return is still representative/accurate to your current situation.

While we could ignore that question, it would clearly be unethical to do so. It might also invalidate any credit towards loan forgiveness that you get. And it could very well be illegal.

So, if you start repayment right away, a $0 AGI during medical school is very much still valid when you fill out that application, but when we apply for IBR/PAYE in Dec after our grace period ends for our medical school loans, it definitely won't be valid anymore.

Which is too bad--I was hoping to have no payments this year...

 

[RangerBob]

If someone proves me wrong I definitely wouldn't mind 🙂

 

[da8s0859q]

Check out this thread for your second question:

http://forums.studentdoctor.net/showthread.php?t=995140

Right, I know I'd asked a similar question in my own thread over there, but I felt like the thread might be getting a little unwieldy. I'm just trying to figure out if there's any real reason to do forbearance besides sparing myself a few hundred bucks a month as a PGY2-PGY3.

I don't think $0 payments during PGY1 or lower payments in PGY2 (due to half a year's salary on your tax return for your PGY1 year) are possible anymore. I'm applying for IBR/PAYE for one loan that will start repayment right after graduation, and while you do enter your tax info, there is a questions that asks if your AGI from that tax return is still representative/accurate to your current situation.

While we could ignore that question, it would clearly be unethical to do so. It might also invalidate any credit towards loan forgiveness that you get. And it could very well be illegal.

So, if you start repayment right away, a $0 AGI during medical school is very much still valid when you fill out that application, but when we apply for IBR/PAYE in Dec after our grace period ends for our medical school loans, it definitely won't be valid anymore.

Which is too bad--I was hoping to have no payments this year...

If you're filing IBR paperwork now, and if you're not working nor did you in 2012, wouldn't it still be fair to state that your current AGI is indeed $0 which would presumably lead to a $0/mo payment?

 

[BB8730]

Right, I know I'd asked a similar question in my own thread over there, but I felt like the thread might be getting a little unwieldy. I'm just trying to figure out if there's any real reason to do forbearance besides sparing myself a few hundred bucks a month as a PGY2-PGY3.

Oh sorry haha. Didn't see that that was you.

Sent from my Samsung Galaxy Note II using SDN Mobile

 

[RangerBob]

If you're filing IBR paperwork now, and if you're not working nor did you in 2012, wouldn't it still be fair to state that your current AGI is indeed $0 which would presumably lead to a $0/mo payment?

If you're filing now, then I'd say yes, because we don't have a job. But the problem is most people won't/can't file until the fall when their loans get near the end of their grace period, at which point we'll all be earning a salary. I'm not sure if you can apply now for those loans, though it'd certainly be worth looking into.

But, if you have loans starting repayment right when you graduate then I'd apply now, as it takes a month or two for the application process to go through, and the $0 income is still valid.