Just had $470k Medical School loans discharged through PSLF. AMA.

[Red Beard]

As the title says, after 11 years of participation, I've just had my $470k principle + interest student loans discharged through Public Service Loan Forgiveness.

Some details of my situation:

-Had about $220k principle and interest at medical school graduation in 2010. All federal loans.

-Consolidated my loans late summer of intern year, and applied for the Income Based Repayment plan (there are better options now which cap payment at a lower amount.)

-Started paying IBR payments during fall of intern year at a State U residency program, payments I think were around $150/mo to start, and around $300/mo by the end of residency with income increases. Not even close to covering the monthly interest that was accruing.

-Missed deadline for IBR recertification once during residency, and was penalized with immediate capitalization of subsidized interest, tens of thousands of dollars.

-Finished residency 2014 and joined my University as full time faculty, payments went up to ~$1500/mo. Standard 10 year payment would have been $3000/mo at this point. Stayed on at the university for 4 years.

-Left faculty position for an employed position at a 501c3 hospital, working 0.8FTE or 32 hrs per week, which the institution considered full time.

-Applied for loan discharge from my current job on the day after my 120th payment on April 8th, and got my official discharge letter today.

Over the years, I'd heard a lot of people tell me they weren't doing the program bc they heard it doesn't work, that it would be taken away, it was a pipe dream, etc. Well, proof is in the pudding.

I feel like I am an expert at this point in this program from a physician perspective, and am willing to answer questions you've got.

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[DarkKnight835]

how much money would you say you have paid in mandatory monthly payments + any fees from PSLF paperwork’s?

 

[Red Beard]

I estimate I paid around $100k on the loans since finishing medical school.

 

[Dantes]

Congrats. That's a huge weight off your back. I'll admit I was one of the ones talking **** about the program just because so many people were getting rejected. Why do you think that is, and how did you avoid these common pitfalls?

This might get more coverage in the main MD forum btw

 

[TMP-SMX]

Congrats! I've paid about 8k on my loans for past 10 years (mostly due to long residency and larger family size). Had a bit of a mixup with switching to fedloans and prolonged lack of payments in the beginning. Unless the forbearance extends beyond September I estimate I'll pay another 14k then should be on track to make my 120th payment next year. Roughly 250k will be forgiven.

 

[sylvanthus]

I hope to be in your shoes in 3 years. Im making sure I keep a good paper trail and am rdy to hire a lawyer asap if I get pushback. Fedloan servicing is the devil. Ive had to have my payments recounted twice due to incompetence and each time I have to get The CFPB or ombudsman involved. Ridic.

 

[ek_5.17]

Hi @Red Beard thanks for sharing! I am an incoming medical student looking at ~320,000 in federal loans and pretty certain I want to work in an academic or nonprofit hospital after graduation. How certain is it that I will receive PSLF without any pushback (randomly getting rejected after 120 payments, FedLoan Servicing miscounting my payments, etc.)? I know there are things you can do to make sure you're on the right track (certify your employer at the get-go when you start residency, fill out some form every year to report payments, track how many eligible payments have been counted using the PSLF Qualifying Payment Update report). Are people rejected even in spite of these things? And did you have trouble finding positions in nonprofit/public hospitals? Thanks!

 

[StIGMA]

I feel like I am an expert at this point in this program from a physician perspective, and am willing to answer questions you've got.

Do you expect to be responsible for any taxes on the forgiven balance? Not sure how the Biden tax bill affects this.

 

[Aheadbyacentury]

Do you expect to be responsible for any taxes on the forgiven balance? Not sure how the Biden tax bill affects this.

they will treat it as income and you will owe govt 150k

 

[GreenHousePub]

Do you expect to be responsible for any taxes on the forgiven balance? Not sure how the Biden tax bill affects this.

I thought Trump era changed this where you are no longer responsible for the tax burden? Or was it only military.

 

[Mad Jack]

Do you expect to be responsible for any taxes on the forgiven balance? Not sure how the Biden tax bill affects this.

they will treat it as income and you will owe govt 150k

I thought Trump era changed this where you are no longer responsible for the tax burden? Or was it only military.

PSLF is tax-exempt, OP will owe nothing. IBR, PAYE, and REPAYE loan forgiveness are not

 

[mjhunt103]

PSLF is tax-exempt, OP will owe nothing. IBR, PAYE, and REPAYE loan forgiveness are not

Well, as far as IBR, PAYE, and REPAYE, they have been made tax-free through 2025. But, even if it is not extended, many chronically unmatched MD's will pay little or no tax anyway.

Because, if you are insolvent, meaning your liabilities exceed your assets exceed your liabilities, you will not have to pay taxes on all or part of the cancelled indebtedness "income."

Understanding Student Loan Debt Forgiveness and Insolvency

Are you worried about the tax bomb associated with student loan debt forgiveness? Insolvency might stop that from happening. Here's what to know.

thecollegeinvestor.com

Seth Koeut managed to avoid this by winning his bankruptcy battle, but it may not be necessary to bother with that.

It is still wrong that so many unmatched MD's have to work minimum wage jobs. but there is at least some justice in the world.

 

[Mad Jack]

Well, as far as IBR, PAYE, and REPAYE, they have been made tax-free through 2025. But, even if it is not extended, many chronically unmatched MD's will pay little or no tax anyway.

Because, if you are insolvent, meaning your liabilities exceed your assets exceed your liabilities, you will not have to pay taxes on all or part of the cancelled indebtedness "income."

Understanding Student Loan Debt Forgiveness and Insolvency

Are you worried about the tax bomb associated with student loan debt forgiveness? Insolvency might stop that from happening. Here's what to know.

thecollegeinvestor.com

Seth Koeut managed to avoid this by winning his bankruptcy battle, but it may not be necessary to bother with that.

It is still wrong that so many unmatched MD's have to work minimum wage jobs. but there is at least some justice in the world.

This thread isn't about unmatched people, it is about how doctors deal with debt in practice. It seems unlikely the unfunded tax rescindment will continue. As for insolvency, that's basically only going to happen if you don't match and can't find a decent job doing anything afterward

 

[mjhunt103]

This thread isn't about unmatched people, it is about how doctors deal with debt in practice. It seems unlikely the unfunded tax rescindment will continue. As for insolvency, that's basically only going to happen if you don't match and can't find a decent job doing anything afterward

This thread is very much related to unmatched people, whether you want it to be or not. There is a pressing social need to talk about it much more, because without changes to the residency selection and immigration systems, it will become ever more common in the future (with you being part of the reason, since you apparently want debt-free foreigners to have an equal chance at U.S. residencies).

Even if you don't care about their mental health, I do. I don't want to see more follow Leigh Sundem's path.

PSLF is commonly talked about as a forgiveness mechanism among chronically unmatched MD's and everyone else, so nothing could be more relevant.

And, I am pretty sure most unmatched MD's, like Dr. Seth Koeut, will never find anything paying much more than minimum wage. Aside from the lack of inability to acquire more skills, there is an enormous stigma against unmatched MD's (with you furthering it).

It may shock you, but i have no tolerance for any debt or risk of wasting years of life. That would prevent me from even trying medical school even if I thought I could get in. I, am, in fact extremely hesitant to try any kind of further education without a guarantee of a high-paying job.

So, I will continue to work to change the world to reduce debt risk and increase my chances of high-paying jobs.

 

[Mad Jack]

This thread is very much related to unmatched people, whether you want it to be or not. There is a pressing social need to talk about it much more, because without changes to the residency selection and immigration systems, it will become ever more common in the future (with you being part of the reason, since you apparently want debt-free foreigners to have an equal chance at U.S. residencies).

Even if you don't care about their mental health, I do. I don't want to see more follow Leigh Sundem's path.

PSLF is commonly talked about as a forgiveness mechanism among chronically unmatched MD's and everyone else, so nothing could be more relevant.

And, I am pretty sure most unmatched MD's, like Dr. Seth Koeut, will never find anything paying much more than minimum wage. Aside from the lack of inability to acquire more skills, there is an enormous stigma against unmatched MD's (with you furthering it).

It may shock you, but i have no tolerance for any debt or risk of wasting years of life. That would prevent me from even trying medical school even if I thought I could get in. I, am, in fact extremely hesitant to try any kind of further education without a guarantee of a high-paying job.

So, I will continue to work to change the world to reduce debt risk and increase my chances of high-paying jobs.

Off-topic posting is against the terms of service, my dude, specifically to avoid dragging every thread down some sociopolitical nightmare ride. Stay on topic, the topic being PSLF and how to make it work for residents and doctors

 

[deleted1106813]

As the title says, after 11 years of participation, I've just had my $470k principle + interest student loans discharged through Public Service Loan Forgiveness.

Some details of my situation:

-Had about $220k principle and interest at medical school graduation in 2010. All federal loans.

-Consolidated my loans late summer of intern year, and applied for the Income Based Repayment plan (there are better options now which cap payment at a lower amount.)

-Started paying IBR payments during fall of intern year at a State U residency program, payments I think were around $150/mo to start, and around $300/mo by the end of residency with income increases. Not even close to covering the monthly interest that was accruing.

-Missed deadline for IBR recertification once during residency, and was penalized with immediate capitalization of subsidized interest, tens of thousands of dollars.

-Finished residency 2014 and joined my University as full time faculty, payments went up to ~$1500/mo. Standard 10 year payment would have been $3000/mo at this point. Stayed on at the university for 4 years.

-Left faculty position for an employed position at a 501c3 hospital, working 0.8FTE or 32 hrs per week, which the institution considered full time.

-Applied for loan discharge from my current job on the day after my 120th payment on April 8th, and got my official discharge letter today.

Over the years, I'd heard a lot of people tell me they weren't doing the program bc they heard it doesn't work, that it would be taken away, it was a pipe dream, etc. Well, proof is in the pudding.

I feel like I am an expert at this point in this program from a physician perspective, and am willing to answer questions you've got.

Congrats! I'm glad you were able to make it happen

Request for Information Regarding the Public Service Loan Forgiveness Program

Leaving this url as the government is trying to revamp the program and seeking suggestions and comments from the public

 

[theendisnigh]

Is there a certain approximate amount of loans for which one should pursue PSLF rather than paying off ASAP? Ex. I'll have around 70K in loans by the end of the ride, significant but not horrible after a few degrees. Going for med-peds. Would you recommend I proceed with PSLF making minimal payments under IBR or go ahead and try to steamroll em?

Congratulations on the weight lifted off your shoulders!

 

[Mad Jack]

Is there a certain approximate amount of loans for which one should pursue PSLF rather than paying off ASAP? Ex. I'll have around 70K in loans by the end of the ride, significant but not horrible after a few degrees. Going for med-peds. Would you recommend I proceed with PSLF making minimal payments under IBR or go ahead and try to steamroll em?

Congratulations on the weight lifted off your shoulders!

Just pay it off. The break point is around 250-300k depending on interest. Your loans will be paid off under any payment plan before forgiveness occurs.

 

[goldsummer]

Wow, congrats. I have always heard it doesnt work and no one actually gets their loans forgiven. Good to hear a success story.

Question about my situation (for anyone who wants to answer)
I have 243k in debt. I can pay it all off now. I'm also eligible for PSLF.

Do I:
1) Pay it all off (except for 80k, my employer will pay that over the next 4 years) - Done in 4 yrs
2) Pay off a chunk, refinance, invest the rest. - Done in 5-6 years
3) Try this PSLF and pay the minimum and hopefully get forgiven in 7 years? I didnt do the math here, but I assume if its forgiven I'll end up paying less overall. If not, I'm in a crappy situation.

 

[Red Beard]

Wow, congrats. I have always heard it doesnt work and no one actually gets their loans forgiven. Good to hear a success story.

Question about my situation (for anyone who wants to answer)
I have 243k in debt. I can pay it all off now. I'm also eligible for PSLF.

Do I:
1) Pay it all off (except for 80k, my employer will pay that over the next 4 years) - Done in 4 yrs
2) Pay off a chunk, refinance, invest the rest. - Done in 5-6 years
3) Try this PSLF and pay the minimum and hopefully get forgiven in 7 years? I didnt do the math here, but I assume if its forgiven I'll end up paying less overall. If not, I'm in a crappy situation.

Kind of depends on your values. In my opinion, if the loans can be dealt with in under 4 years or so with minimal hardship, then its worth pursuing that in order to have maximum career flexibility sooner.

If I were you I'd do a mix of option 1 and 2, making sure that I always have the capital somewhat readily available to pay off immediately if I suddenly realized I could not stay in a particular job any longer. I.e. no high risk investments.

 

[cincincyreds]

What are the rules for being eligible for PSLF?

 

[spidermedic]

What are the rules for being eligible for PSLF?

120 payments while working at a non-profit. Most residencies count (HCA usually doesn't, for example). For people going into academia it's a no brainer but for others looking to do private practice it might be more lucrative to go PP and pay it off themselves especially if the debt is <$200k (chump change)

 

[FutureInternist]

Congrats…. And F you !! 🤪

 

[petomed]

1. How much time passed between applying for discharge and receiving official notification of forgiveness?
2. What's your specialty?
3. Did you weigh income differentials between the jobs available through the PSLF route vs. potentially higher paying jobs that wouldn't qualify for PSLF? Basically, did you get fancy with trying to nickel and dime which route would be 'cheaper', or did you just say bump that and run the PSLF route?

 

[Red Beard]

1. How much time passed between applying for discharge and receiving official notification of forgiveness?
2. What's your specialty?
3. Did you weigh income differentials between the jobs available through the PSLF route vs. potentially higher paying jobs that wouldn't qualify for PSLF? Basically, did you get fancy with trying to nickel and dime which route would be 'cheaper', or did you just say bump that and run the PSLF route?

1) applied for discharge April 8, official notification late June
2) psychiatry
3) I chose the route that I thought would be most professionally satisfying and sustainable to me while still getting the loans dealt with. Thankful that the PSLF program allowed me to do that. I could have made about ~30% more money right out of residency if I had gone for the highest paying opportunity, vs the faculty position I took. However, I would have probably burned out quickly because those high paying jobs required very high caseloads and long hours (ie 20 minute med checks 40hrs per week.) My clinical faculty position was much more interesting, varied, and rewarding. The last few years of my 10 year commitment I worked for a private non-profit which did pay more, but still had a good work-life balance. I still work for that employer now ~8months after forgiveness with no immediate plan to move on.

 

[Adventure-time]

Applied for loan discharge from my current job on the day after my 120th payment on April 8th, and got my official discharge letter today.

Unless the forbearance extends beyond September I estimate I'll pay another 14k then should be on track to make my 120th payment next year. Roughly 250k will be forgiven.

Is there something special about the 120th payment? Is that when loans are forgiven?