Loans during residency

[Tromner]

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Does anyone have any words of wisdom regarding handling loan repayment during internship and residency? Should I just follow the repayment schedule that my loan servicer suggests or would it be worth sitting down with a professional?

Also, if my spouse has educational debt from undergrad does that change things at all or are our debts completely separate?

Has anyone gotten payments during a residency at an academic nonprofit hospital to qualify under the Public Service Loan Forgiveness program?

Thanks

 

[The JockDoc]

It depends on how much you owe and what type of loans you have.

For most, IBR is quickly becoming the norm since med school costs and interest rates are out of control. I have personally had my payments qualify for PSLF since I have been fortunate enough to do internship and residency at nonprofit hospitals.

The financial aid forums are more appropriate for your question.

 

[padresp]

I would recommend IBR as well. You may already know this but in case you don't (or others don't)... There are two websites to become acquainted with:

1. http://www.ibrinfo.org. This is strictly the repayment plan. It can be used for:
2. http://www.studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service. The PSLF program applies to "public service" employees. After 120 IBR payments, your remaining loans are forgiven. It is important to know that only DIRECT loans are eligible for this, so if you have other loans (FFEL, for example), you have to do a Direct Loan consolidation (http://www.loanconsolidation.ed.gov/). I did this, and it wasn't too difficult in my opinion though I have heard others having more of a hassle than I did.

The important thing to realize is that if you're able to consistently make these relatively small payments while you're in residency/fellowship, you're going to work for a hospital that is considered "public service," and the program still exists in 10 years, then you will save quite a bit of money because the first 4+ years will be relatively low payments.

The way I see it, worst-case scenario is you just pay a little more of your loans off during residency. Best-case is you get your remaining debt wiped at year 10.

 

[Tromner]

Doing the IBR and PSLF was my hope, so I'm glad it has worked for others, and that payments in training can be counted. That means only 6 years of payments after residency. Wow.

Thanks for the info.

 

[outdoorfanatic]

I have heard some things back and forth on what qualifies as "public service". Are not for profit health systems "public service"?

 

[padresp]

I have heard some things back and forth on what qualifies as "public service". Are not for profit health systems "public service"?

Anyone who has worked with Sallie Mae is probably aware of how lousy their customer service reps are. Long story short, I worked my way up the chain and ended up talking to one of their VPs a couple of years ago. She was extremely helpful (and knowledgeable), and she told me that, at that time, not-for-profit health systems definitely were considered public service. That may change, however, depending on the political climate at any given point.

Also see these links:

• http://studentaid.ed.gov/repay-loan...harts/public-service#what-kinds-of-employment
• https://www.aamc.org/services/first/first_factsheets/112344/public_service_loan_forgiveness.html

 

[RangerBob]

Anyone who has worked with Sallie Mae is probably aware of how lousy their customer service reps are. Long story short, I worked my way up the chain and ended up talking to one of their VPs a couple of years ago. She was extremely helpful (and knowledgeable), and she told me that, at that time, not-for-profit health systems definitely were considered public service. That may change, however, depending on the political climate at any given point.

Also see these links:

• http://studentaid.ed.gov/repay-loan...harts/public-service#what-kinds-of-employment
• https://www.aamc.org/services/first/first_factsheets/112344/public_service_loan_forgiveness.html

The only thing is to be careful--in general, most (but definitely not all) academic medical centers (who pay your residency salary) are non-profit. But often the attending physicians who work for an academic health center will be paid by a physicians' foundation, which aren't always non-profits. So you just have to be a little careful and think about who's actually paying your salary.