Loan repayment

[dramw]

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PSLF repayment will likely start up soon. What is the minimum monthly payment as an attending if we are basing it off the old rules ( granted that they might lower it ). If you make 350k, is it 10% of the salary so 3,500 a month?

Thanks in advance.

 

[Dr. Basketball]

PSLF repayment will likely start up soon. What is the minimum monthly payment as an attending if we are basing it off the old rules ( granted that they might lower it ). If you make 350k, is it 10% of the salary so 3,500 a month?

Thanks in advance.

Something like that; but remember that it is your discretionary income. So 350k per year is about 29k per month, then after taxes depending on your state/marriage status/dependents etc. let's say your check will be around 19k per month, so you'll pay $1900/month.

Also keep in mind that there are a few different payment plans you can choose from. The 10% one you're referring to is the income-driven plan I believe. Hope this helps.

 

[Thama]

PAYE is the one you want to be on if possible. Lowest payment with no drawbacks if you plan to seek PSLF.

 

[DrStephenStrange]

PAYE is the one you want to be on if possible. Lowest payment with no drawbacks if you plan to seek PSLF.

Realized early on that if I were to go forward with PSLF and make the lowest payments as possible, my wife salary would need to stay out of my “discretionary income”, and PAYE allows that (as compared to REPAYE).

 

[Thama]

Realized early on that if I were to go forward with PSLF and make the lowest payments as possible, my wife salary would need to stay out of my “discretionary income”, and PAYE allows that (as compared to REPAYE).

That's another big one - if you have a spouse with a significant income then PAYE combined with married filing separately can be a good idea for a while.

 

[NEApplicant]

This is how the government defines "discretionary income" for the purpose of student loans
And I found this handy calculator where you just put in your income, state, and household size and it tells you how much you'll pay.

 

[deleted1139416]

Quick question - why is everyone so confident about PSLF? Wasn't it a disaster when the administration was first going through the applications to forgive loans?

 

[CnsCrit]

Yeah, but so far docs who have gone through the process are being actively forgiven so I think it's doubtful the government will go so far as to reneg on those of us who are already on the correct path. Some advise to keep a PSLF side fund just in case.

 

[DrStephenStrange]

Quick question - why is everyone so confident about PSLF? Wasn't it a disaster when the administration was first going through the applications to forgive loans?

That was because people didn’t read the fine print and thought it was just making payments for 10 years and they would qualify. When in reality they either didn’t meet the criteria for the 120 payments required or they didn’t complete other requirements. Most people are gettting approved nowadays though.

 

[deleted1139416]

That was because people didn’t read the fine print and thought it was just making payments for 10 years and they would qualify. When in reality they either didn’t meet the criteria for the 120 payments required or they complete other requirements. Most people are gettting approved nowadays though.

If that's the case then current med students would benefit from taking maximal loans out

 

[DrStephenStrange]

If that's the case then current med students would benefit from taking maximal loans out

There are situations where it’s more beneficial to pay off the loans really fast than to go through with PSLF. So I would suggest taking whatever amount is needed to survive in med school (instead of taking the max just because). I personally took the max amount because I needed it to survive.

 

[BoneWizard]

You can break it down pretty easily.
PGY1 year you had no income the previous year as a MS4 so your income based repayment should be $0.
PGY2 year you only received about 6 months of your resident salary (July 1st - Dec 31st), so your income should be ~$30k. Minus 150% of federal poverty level ($22k) gives you a discretionary income of $8k. 10% of that is your payment. Which is $800.
PGY3 year is the first year you make full payments. Your income should be $60k. Payments should be $60k-$22k = $38k * 10% = $3,800.
PGY4 year should be the same calculation. Maybe a bit more with annual pay increase. $4,000.
PGY5 fellowship year, same thing, slight pay bump so $4,200.
First attending year, same thing since you're still going off your fellowship salary. So again about $4,600.

That's 6 years of PSLF payments already. You've paid ~$17.4k.

Now your second attending year you start making significant payments. If you have a salary of $280k which seems to be the median for general neurology. Your payment should be $280k-$22k = $258k * 10% = $25.8k

So to finish out PSLF you need 4 more years of payments at $25.8k or another $100k or so.

So basically if your total loans are > $100k and your salary without compensation is at or under $280k a year, PSLF will save you money.

In this scenario your repayment is the same regardless of if you took out $100k in loans or $500k

 

[Thama]

That was because people didn’t read the fine print and thought it was just making payments for 10 years and they would qualify. When in reality they either didn’t meet the criteria for the 120 payments required or they didn’t complete other requirements. Most people are gettting approved nowadays though.

Yeah - it wasn't even the "fine print", it was mostly people who couldn't read or understand the large print on the front cover of the program and thought that crying loudly would make their loans disappear despite them never qualifying for the program in the first place.

 

[BlueBleck]

PAYE is the one you want to be on if possible. Lowest payment with no drawbacks if you plan to seek PSLF.

Biden's been wanting to restructure repaye to have lower monthly repayments and to allow married people to file separately.

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The key question is whether or not it goes through. My understanding is that it is a separate issue from the 10k loan forgiveness, so not affected by the lawsuit. My understanding is that him re-writing the rules is more kosher than the 10k forgiveness, and so it's not expected to be successfully challenged. Like how trump made his own loan forgiveness deal.

What to know about Biden's other student loan repayment plan, to lower payments based on income

The student loan repayment changes would revise and expand the Revised Pay As You Earn (REPAYE) Plan, an income-driven plan

abcnews.go.com