It's that time- WCI, what is the best current PSLF option (assuming program exists in 10 yrs)

[wanderedtoolong]

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Here we go, graduating with just over 300K in debt, yay! Reading about PAYE versus REPAYE and thoroughly confused. Married with a spouse who doesn't make a ton of money (NIH scale post-doc). Am currently planning a pretty academic route, so staying in a PSLF qualifying position is realistic. What are current thoughts on the available repayment programs, and is there any way to strategize in case PSLF for physicians disappears/gets capped? Thanks!!

 

[fahimaz7]

Here we go, graduating with just over 300K in debt, yay! Reading about PAYE versus REPAYE and thoroughly confused. Married with a spouse who doesn't make a ton of money (NIH scale post-doc). Am currently planning a pretty academic route, so staying in a PSLF qualifying position is realistic. What are current thoughts on the available repayment programs, and is there any way to strategize in case PSLF for physicians disappears/gets capped? Thanks!!

You can strategize by saving what you would be paying under a normal plan (ie 5 or 10 year loan) in a separate high-yield savings account. That way, if you leave your job or the government decides that PSLF is a bad idea for doctors, you will have ~200k in cash ready to go. This can also function as a vessel to save for a house down payment, brokerage account, 529, etc when the time comes.

300k in loans over 10 years = 3500/mo. PAYE @ 250k is estimated to be 1800/mo. Put the 1700/month into an account and in 10 years you're over 200k in a savings account. The only issue is you'll end up paying more interest than you would if you refinanced it...

 

[The White Coat Investor]

Presumably you've already made 3 years of low payments under some program, but you haven't told us what it is. Nor is there enough detail to answer your question.

If you're going for PSLF, you want to stay in a government program and you want to minimize your payments. You also want to be savings up a side fund, just in case.

You probably want to be in PAYE as an attending (since REPAYE doesn't put a cap on payments at the regular 10 year payment). I wouldn't think MFS as an attending is going to help any given a lower earning spouse. However, REPAYE with MFS was probably the right move as a resident, but that's water under the bridge now.

But this is a situation where you really need to run the numbers. Probably worth paying a pro a couple hundred bucks to help you run them.

Actually, I'm not clear if you're a graduating med student or a graduating resident. I was assuming resident as this is a resident forum. But you're probably a med stud per your avatar. Still worth paying for advice, but the answer for you is probably REPAYE + MFS.

 

[wanderedtoolong]

Eep so sorry for the lack of clear info, and thank you for responding. Yes, I'm a graduating med student headed into a 3 year EM residency. My husband earns around $43K/year (with a PhD!). There is a chance he'll move to biotech within the next year and start earning about double that. I'll definitely check out the advisers recommended on your website, as a few hundred bucks will be money well spent if we can more effectively manage all of this debt.

Presumably you've already made 3 years of low payments under some program, but you haven't told us what it is. Nor is there enough detail to answer your question.

If you're going for PSLF, you want to stay in a government program and you want to minimize your payments. You also want to be savings up a side fund, just in case.

You probably want to be in PAYE as an attending (since REPAYE doesn't put a cap on payments at the regular 10 year payment). I wouldn't think MFS as an attending is going to help any given a lower earning spouse. However, REPAYE with MFS was probably the right move as a resident, but that's water under the bridge now.

But this is a situation where you really need to run the numbers. Probably worth paying a pro a couple hundred bucks to help you run them.

Actually, I'm not clear if you're a graduating med student or a graduating resident. I was assuming resident as this is a resident forum. But you're probably a med stud per your avatar. Still worth paying for advice, but the answer for you is probably REPAYE + MFS.

 

[DocEspana]

Eep so sorry for the lack of clear info, and thank you for responding. Yes, I'm a graduating med student headed into a 3 year EM residency. My husband earns around $43K/year (with a PhD!). There is a chance he'll move to biotech within the next year and start earning about double that. I'll definitely check out the advisers recommended on your website, as a few hundred bucks will be money well spent if we can more effectively manage all of this debt.

as a note, PAYE and all the other income contingent plans are based on your LAST tax filing which (given you will apply in the fall) will be based on income from almost two years ago. That is to say, your 12 payments of PAYE are $0. $0.00 payments dont count towards it, but if you were to splurge and pay.... one cent... it does count. And then your second year of PAYE is actually only ~50% of your resident amount (mine ended up being like $50 a month). And your third year of PAYE is your full resident amount (because there is some stuff about income above the poverty line it more than doubles. mine is $275 for example). Your first year as an attending (fourth of PAYE)? still paying that reisdent amount. Your second year as an attending (5th of PAYE) is some large amoutn but its still 50% resident income and 50% attending income so its smaller. Its not until your 3rd year as an attending (6th round of PAYE) that you get hit with the full brunt of it. And really at that point you are literally half way done.

 

[The White Coat Investor]

If you're serious about PSLF, do this: http://whitecoatinvestor.com/how-to-enroll-in-repaye-early/