PSLF + Nontrad

[_TheStruggl3_]

---

Members do not see this ad.

Can anyone help clarify if your residency is a 501c3 hospital, those IBR payments made towards your loans count towards the 10-year PSLF eligibility?

Any super non-trad students in similar shoes where they were paying off their student loans with their premed job, continued paying it off during residency, and became debt-free with PSLF during residency?

I just learned about PSLF. I have to do retro-active PSLF application and employment certification, but am just trying to figure out if I could be eligible for PSLF as soon as I finish residency.

 

[KnightDoc]

Interesting question. Bottom line - you'll be able to get rid of your prior loans after 120 payments, but you'll start a new 10 year clock on your med school loans 6 months after graduation (assuming the program even exists in its current form then), so you won't leave residency debt free, unless you don't borrow for med school.

If I return to school and qualify for an in-school deferment on my Direct Loans that are in repayment, can I decline the deferment and make qualifying PSLF payments while I’m in school?
Yes. You can decline an in-school deferment on your loans that are in repayment status and make qualifying payments on those loans while you are in school. In this case, you must contact your servicer and request that the in-school deferment be removed. Remember, in order for your payments to qualify for PSLF, you must be employed full-time by a qualifying employer while you attend school.

Note: If you receive new Direct Subsidized Loans or Direct Unsubsidized Loans when you return to school, you won’t be able to make qualifying PSLF payments on those loans while you are in school. Any new Direct Subsidized Loans or Direct Unsubsidized Loans you receive won’t enter repayment until the end of the six-month grace period after you leave school. Although you could voluntarily make payments on your new Direct Subsidized Loans and Direct Unsubsidized Loans while you are in school or during your grace period, those payments wouldn’t count toward PSLF.

Can I waive the six-month grace period on my Direct Subsidized Loans and Direct Unsubsidized Loans and begin making qualifying PSLF payments early?
No. The law that governs the Direct Loan Program does not allow borrowers to waive the grace period on Direct Subsidized Loans and Direct Unsubsidized Loans. You cannot begin making qualifying PSLF payments until after your loans have entered repayment at the end of the grace period. Any payments you make on a loan during the grace period will not count toward PSLF. However, if you want to immediately begin making qualifying payments on your federal student loans as soon as you leave school, you may consolidate your loans into a Direct Consolidation Loan during your grace period and enter repayment right away.

 

[_TheStruggl3_]

Interesting question. Bottom line - you'll be able to get rid of your prior loans after 120 payments, but you'll start a new 10 year clock on your med school loans 6 months after graduation (assuming the program even exists in its current form then), so you won't leave residency debt free, unless you don't borrow for med school.

If I return to school and qualify for an in-school deferment on my Direct Loans that are in repayment, can I decline the deferment and make qualifying PSLF payments while I’m in school?
Yes. You can decline an in-school deferment on your loans that are in repayment status and make qualifying payments on those loans while you are in school. In this case, you must contact your servicer and request that the in-school deferment be removed. Remember, in order for your payments to qualify for PSLF, you must be employed full-time by a qualifying employer while you attend school.

Note: If you receive new Direct Subsidized Loans or Direct Unsubsidized Loans when you return to school, you won’t be able to make qualifying PSLF payments on those loans while you are in school. Any new Direct Subsidized Loans or Direct Unsubsidized Loans you receive won’t enter repayment until the end of the six-month grace period after you leave school. Although you could voluntarily make payments on your new Direct Subsidized Loans and Direct Unsubsidized Loans while you are in school or during your grace period, those payments wouldn’t count toward PSLF.

Can I waive the six-month grace period on my Direct Subsidized Loans and Direct Unsubsidized Loans and begin making qualifying PSLF payments early?
No. The law that governs the Direct Loan Program does not allow borrowers to waive the grace period on Direct Subsidized Loans and Direct Unsubsidized Loans. You cannot begin making qualifying PSLF payments until after your loans have entered repayment at the end of the grace period. Any payments you make on a loan during the grace period will not count toward PSLF. However, if you want to immediately begin making qualifying payments on your federal student loans as soon as you leave school, you may consolidate your loans into a Direct Consolidation Loan during your grace period and enter repayment right away.

Thanks for the info!

I'm a little confused on the new 10-year clock. I thought if I consolidated all my loans in residency and continued to repay all my loans from undergrad + grad + med school, the clock isn't reset but starts with my oldest loan/one with the higher repayment count?

 

[KnightDoc]

Thanks for the info!

I'm a little confused on the new 10-year clock. I thought if I consolidated all my loans in residency and continued to repay all my loans from undergrad + grad + med school, the clock isn't reset but starts with my oldest loan/one with the higher repayment count?

Nope. It's exactly the opposite. If this weren't the case, everyone, not just med students, could add high principal loans onto low principal ones and have them forgiven in a relatively short period of time.

I made qualifying PSLF payments on my Direct Loans and then consolidated those loans. Do the payments I made before consolidation still count toward PSLF?
No. If you make qualifying PSLF payments on a Direct Loan and then consolidate that loan, you’ll lose credit for the PSLF payments. You’ll need to start over and make 120 qualifying payments on the new Direct Consolidation Loan. For this reason, if you’ve made qualifying PSLF payments on your Direct Loans and you’re thinking of consolidating those loans into a Direct Consolidation Loan along with loans you received under other federal student loan programs, you should leave your Direct Loans out of the consolidation and consolidate only your loans from other federal student loan programs.

 

[_TheStruggl3_]

Nope. It's exactly the opposite. If this weren't the case, everyone, not just med students, could add high principal loans onto low principal ones and have them forgiven in a relatively short period of time.

I made qualifying PSLF payments on my Direct Loans and then consolidated those loans. Do the payments I made before consolidation still count toward PSLF?
No. If you make qualifying PSLF payments on a Direct Loan and then consolidate that loan, you’ll lose credit for the PSLF payments. You’ll need to start over and make 120 qualifying payments on the new Direct Consolidation Loan. For this reason, if you’ve made qualifying PSLF payments on your Direct Loans and you’re thinking of consolidating those loans into a Direct Consolidation Loan along with loans you received under other federal student loan programs, you should leave your Direct Loans out of the consolidation and consolidate only your loans from other federal student loan programs.

Thank you for the clarification!

I realize the information you have is correct, but there is a PSLF Limited Waiver that will expire before I can benefit from it. If someone were in my position (non-trad with multiple years of prior qualifying repayments) but is currently in residency, they could consolidate and might get all their loans forgiven with this PSLF Limited Waiver and not have the clock reset: https://studentaid.gov/announcements-events/pslf-limited-waiver

I knew it seemed too good to be true! Maybe this info can benefit some resident out there though haha.

 

[KnightDoc]

Thank you for the clarification!

I realize the information you have is correct, but there is a PSLF Limited Waiver that will expire before I can benefit from it. If someone were in my position (non-trad with multiple years of prior qualifying repayments) but is currently in residency, they could consolidate and might get all their loans forgiven with this PSLF Limited Waiver and not have the clock reset: https://studentaid.gov/announcements-events/pslf-limited-waiver

I knew it seemed too good to be true! Maybe this info can benefit some resident out there though haha.

Yup, definitely looks too good to be true, and is apparently a way to make up for the fact that they were notorious for screwing people out of forgiveness in the past. As it is, it definitely looks like a sweet deal, but, it also looks like it will only work for someone who has made their 120th payment by 10/31/22, which limits is usefulness for people in situations like yours, since you'd not only need to be in residency, but be in a position to be making your 120th payment in this narrow window from last October to next. Maybe they'll extend it past October.

OTOH, I actually think it's more likely that they make changes that make people like us (high income) ineligible in the future, after they start getting the bill for all of the loans they are going to be forgiving in the next few years as they stop screwing people over as they did in the past. My understanding is that eligibility is determined not when you take the loan out, but when you enter repayment. I.e., we will have no idea what forms of forgiveness, if any, we might be eligible for until 2026.