Is anyone doing IBR or PSLF? How is your quality of life financially?

superdoctorman

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    Im still in med school and will be graduating with a much higher than average debt load. I have heard a lot about these programs but not from anyone actually doing them. Can you share how they are working out for you and how you are feeling about your ability to manage your debt and payments?
     

    DrBowtie

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      Over a certain point, not sure the actual number, your IBR payment is just limiting the amount of interest compounding rather than making any dents in principle. Likely you will be paying 300-400/mo on IBR while you watch your debt grow.

      No one has completed PSLF as of yet. The first batch I think will be up for payoff in 2 years I believe. You must complete 120 qualifying payments before you apply for the program so there is no guarantee that in 14 years when you would be up that it would still be present.

      Short of working out a contract with loan repayment, I'd calculate out your 10yr, 30yr repayment plan and look at those numbers when making a decision.
       

      Dral

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        there is no guarantee that in 14 years when you would be up that it would still be present.

        This is the scary part.

        I calculated it out roughly for me and I save a significant amount with IBR and forgiveness, but again, that lack of guarantee is scary as a lot of interest would have built up by then.

        The way I understand it, the best IBR/forgiveness situation isn't really for physicians, but for those with a lot of debt with not so great incomes.
         
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        gasblaster

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          Yeah this uncertainty is killer. Currently 5 months out trying to decide whether to go with: IBR and making only the necessary payments and then get bailed out by PSLF, 30 year payment plan making aggressive payments and pay off asap, OR combination of the two using IBR buy paying aggressively.
           

          Ibn Alnafis MD

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            Over a certain point, not sure the actual number, your IBR payment is just limiting the amount of interest compounding rather than making any dents in principle. Likely you will be paying 300-400/mo on IBR while you watch your debt grow.

            No one has completed PSLF as of yet. The first batch I think will be up for payoff in 2 years I believe. You must complete 120 qualifying payments before you apply for the program so there is no guarantee that in 14 years when you would be up that it would still be present.

            Short of working out a contract with loan repayment, I'd calculate out your 10yr, 30yr repayment plan and look at those numbers when making a decision.

            What would happen if one decides to switch to standard payment, or the government ceases the IBR, after a number of years in residency? Would the borrower be responsible for the accrued interests?

            For example, someone graduates med school owing 350K is going accrue ~25k of interests annually. Using IBR during residency, he/she will pay only 5k/year. After 5 years of residency, 100k of accrued interests+ the compounded interests on those interests + 350k principle will result in a compounded total balance of 450K+. Would that be how much that person will owe if he/she switches to standard repayment plan after five years residency? or will he/she still owe only the initial principle amount of 350K?
             

            DrBowtie

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              What would happen if one decides to switch to standard payment, or the government ceases the IBR, after a number of years in residency? Would the borrower be responsible for the accrued interests?

              For example, someone graduates med school owing 350K is going accrue ~25k of interests annually. Using IBR during residency, he/she will pay only 5k/year. After 5 years of residency, 100k of accrued interests+ the compounded interests on those interests + 350k principle will result in a compounded total balance of 450K+. Would that be how much that person will owe if he/she switches to standard repayment plan after five years residency? or will he/she still owe only the initial principle amount of 350K?
              You're on the hook for whatever interest has accrued. With IBR, your max monthly payment is what the 10yr standard repayment monthly payment would be with your loans.
               
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