Loan Management During Residency - Discussion

[tungsten87]

Hello all, congratulations to those who matched! For those who will be starting their residency relatively soon and for those currently completing residencies or who have completed residencies, I was hoping to initiate a discussion regarding loan management during this time period. From what I have gathered there are three main options:

1. Pay minimum payments - probably not practical for most.
2. Defer loans throughout residency
3. IBR payments during residency

Does anyone have any advice, or pros/cons for each?

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[nervoushabits]

I chose to put my loans into deferment.

Reasons why:
1. My total minimum loan payment every month was about 1/3 more than what I made every month. I chose not to defer my private loan, which was a very small amount that I can afford to pay back. This was something I view as a smart decision because of the ridiculous interest rate.

2. I drove my car that I had from high school all the way through undergrad and pharmacy school. Needless to say, a vehicle with 260,000 miles that didn't have a working heater, headlights, and made weird noises was not going to get me through residency, so I invested in a new car.

3. Paying back loans is a lot of added stress because you have to find money to pay those loans back. Sure, it's one year of interest, but do you really want to have that additional stress on your shoulders? In reality, you are only deferring for 6 months because you get that initial 6 month grace period.

I will be deferring for my PGY-2 year as well. It just isn't feasible for me to pay back my loans with the small income that I will have. But everyone has different situations, and it might work out to where you can make some loan payments. This is just my short rationale on deferment and it is very unique to my particular situation. I would say those that do not have excessive amounts of student loans (unlike me, who went a private school and accumulated a lot of debt because of it), you could potentially make payments.

 

[tungsten87]

I chose to put my loans into deferment.

Reasons why:
1. My total minimum loan payment every month was about 1/3 more than what I made every month. I chose not to defer my private loan, which was a very small amount that I can afford to pay back. This was something I view as a smart decision because of the ridiculous interest rate.

2. I drove my car that I had from high school all the way through undergrad and pharmacy school. Needless to say, a vehicle with 260,000 miles that didn't have a working heater, headlights, and made weird noises was not going to get me through residency, so I invested in a new car.

3. Paying back loans is a lot of added stress because you have to find money to pay those loans back. Sure, it's one year of interest, but do you really want to have that additional stress on your shoulders? In reality, you are only deferring for 6 months because you get that initial 6 month grace period.

I will be deferring for my PGY-2 year as well. It just isn't feasible for me to pay back my loans with the small income that I will have. But everyone has different situations, and it might work out to where you can make some loan payments. This is just my short rationale on deferment and it is very unique to my particular situation. I would say those that do not have excessive amounts of student loans (unlike me, who went a private school and accumulated a lot of debt because of it), you could potentially make payments.

How much debt do you have? I'm in the realm of 110-115K (at graduation). I also plan on staying at the institution I will complete my PGY-1 at for a PGY-2 (unless they hate me of course).

 

[nervoushabits]

How much debt do you have? I'm in the realm of 110-115K (at graduation). I also plan on staying at the institution I will complete my PGY-1 at for a PGY-2 (unless they hate me of course).

Around 200 to 220k. No outside assistance except for my first year or two of undergrad from scholarships. Yes, my ginormous debt gives me nightmares.

 

[njac]

I graduated with $85K or so in loans.

Did forbearance x2 years for residency.

No regrets.

 

[tungsten87]

I graduated with $85K or so in loans.

Did forbearance x2 years for residency.

No regrets.

do you feel like the couple extra hundred dollars per month (vs. IBR) made a big different in your resident quality of life?

 

[GoldfishPharmD]

I have about $200k in debt and I did forbearance this year, and I'll do it again next year.

 

[njac]

do you feel like the couple extra hundred dollars per month (vs. IBR) made a big different in your resident quality of life?

My PGY2 year when I was making <$40K before taxes in a major city?

Absolutely.

 

[njac]

do you feel like the couple extra hundred dollars per month (vs. IBR) made a big different in your resident quality of life?

I should also clarify that I am single with no kids, so my lifestyle would have been hampered by a couple hundred dollars less a month of going out money.

 

[tungsten87]

I should also clarify that I am single with no kids, so my lifestyle would have been hampered by a couple hundred dollars less a month of going out money.

haha, agreed. that $300-400 can go pretty far, especially when you live in a big city with vibrant food/drink options.

 

[memoryalpha]

I'm so torn on this decision, actually, so it's nice to read some other perspectives. I've been very fortunate, both in that I have a moderate amount of debt--in total, ~$40k-- and in that I landed a residency that pays more even than a lot of PGY2s... (50k) in an area that has lower cost of living than than over seventy five percent of the United States.

I think it's obvious that I could pay for something this year; I'm single and have no dependents... but I'm also anxious about the possibility that I could get a PGY2 that pays significantly less than now and then...

 

[njac]

I'm so torn on this decision, actually, so it's nice to read some other perspectives. I've been very fortunate, both in that I have a moderate amount of debt--in total, ~$40k-- and in that I landed a residency that pays more even than a lot of PGY2s... (50k) in an area that has lower cost of living than than over seventy five percent of the United States.

I think it's obvious that I could pay for something this year; I'm single and have no dependents... but I'm also anxious about the possibility that I could get a PGY2 that pays significantly less than now and then...

My PGY-1 paid $12K/yr more than my PGY-2 and was in a much cheaper area (2bedroom condo with garage for $750/mo vs bedroom for $875/mo...)

Still no regrets.

Your loans are so low you could make a significant dent.

 

[sunbuRxt]

How much debt do you have? I'm in the realm of 110-115K (at graduation). I also plan on staying at the institution I will complete my PGY-1 at for a PGY-2 (unless they hate me of course).

Holy crap. That's very little debt compared to California schools

 

[tungsten87]

Holy crap. That's very little debt compared to California schools

It is still a lot of money, but would have been significantly more (probably 35K) had I not worked the first three years of pharmacy school - nearly full time.

That dog is adorable.

 

[rxlea]

My PGY-1 paid $12K/yr more than my PGY-2 and was in a much cheaper area (2bedroom condo with garage for $750/mo vs bedroom for $875/mo...)

Still no regrets.

Your loans are so low you could make a significant dent.

Plus, weren't you in the best city ever?

 

[rxlea]

The fate of the match put me living with my SO for PGY1. Most of my income will go to loans. I'll pay for groceries and I'll cook, clean, and do laundry. Low price to pay for living in one of the nicest parts of the city. I'm going to try to put a big dent into the ~170K I'll have at graduation (including interest).

Question- can you do IBR for a year and change it later when you make more? Or should I defer and pay anyway during residency? I'll be paying more than what IBR would require. Which one is better for your credit? I haven't talked to a loan counselor yet but I thought I would ask you fine folks for any insight.

 

[tungsten87]

The fate of the match put me living with my SO for PGY1. Most of my income will go to loans. I'll pay for groceries and I'll cook, clean, and do laundry. Low price to pay for living in one of the nicest parts of the city. I'm going to try to put a big dent into the ~170K I'll have at graduation (including interest).

Question- can you do IBR for a year and change it later when you make more? Or should I defer and pay anyway during residency? I'll be paying more than what IBR would require. Which one is better for your credit? I haven't talked to a loan counselor yet but I thought I would ask you fine folks for any insight.

You can do IBR and then pay whatever else you like on top of your monthly payments. That is what I plan on doing. Definitely IBR.

 

[matcha_pocky]

Trying to figure out more regarding loan management during residency.

Is it true that for federal loans one would only be able to apply for forbearance?

 

[bacillus1]

Trying to figure out more regarding loan management during residency.

Is it true that for federal loans one would only be able to apply for forbearance?

No, you can do deferment as long as your RPD signs the form. I think for fellowship you need to do forbearance.

 

[matcha_pocky]

No, you can do deferment as long as your RPD signs the form. I think for fellowship you need to do forbearance.

Thanks! That's what I thought but my deferment application was denied, I was told I could only apply for forbearance for a residency/extra training-related loan that was dispersed after 1993. :-/

 

[Transformer]

Thanks! That's what I thought but my deferment application was denied, I was told I could only apply for forbearance for a residency/extra training-related loan that was dispersed after 1993. :-/

Same happened to me. I was only allowed to apply for forbearance and my residency director had to sign the form.

 

[njac]

I did forbearance x2 years

 

[GoldfishPharmD]

I did forbearance x2 years

Same. It sucks though.

 

[PharmBeanz]

Has anyone used or know of someone who has used the plan through studentloanproject.us? I'm doing a PGY1 in a nonprofit hospital and the monthly payment I was quoted was very low, which makes me wonder if it's too good to be true.