PSLF Question

[spongebobdoc]

I’m going to be taking a lot of loans out, and the PLSF looks like a very attractive forgiveness program to me.
From my understanding: You need to pay the minimum of your loan for 10 years straight once a month. What do these minimums usually look like?For like a 300k loan coming out of med school, what’s the minimum payment on that? I’m asking this because I want to know if it’ll be worth it to carry this debt with me for years as an attending instead of just paying it off.

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[RangerBob]

There are online calculators that estimate your monthly payment based on what you earn. It's hard to give a ballpack since they came out with a new income based plan (SAVE), which is now 10% of your monthly income minus a poverty level adjustment, etc. So your payments in residency are very manageable, and as an attending go quite a bit up. If you (and your spouse) make enough, you may be better off on the standard 10-year repayment plan or just paying it all off early.

It's really all dependent on how much you owe, how much you make, and what your minimum monthly payment is.

I would not borrow loans with the expectation they'll get paid off. If they do that's great. But if they don't you're in a heap of trouble if you were relying on it (be mindful not all jobs are eligible for PSLF). Most who are going for PSLF are advised to put aside a big chunk of money into a savings account/investment account/etc in the event they change jobs or are no longer eligible for PSLF for any reason.

 

[spongebobdoc]

There are online calculators that estimate your monthly payment based on what you earn. It's hard to give a ballpack since they came out with a new income based plan (SAVE), which is now 10% of your monthly income minus a poverty level adjustment, etc. So your payments in residency are very manageable, and as an attending go quite a bit up. If you (and your spouse) make enough, you may be better off on the standard 10-year repayment plan or just paying it all off early.

It's really all dependent on how much you owe, how much you make, and what your minimum monthly payment is.

I would not borrow loans with the expectation they'll get paid off. If they do that's great. But if they don't you're in a heap of trouble if you were relying on it (be mindful not all jobs are eligible for PSLF). Most who are going for PSLF are advised to put aside a big chunk of money into a savings account/investment account/etc in the event they change jobs or are no longer eligible for PSLF for any reason.

I see. I will be attending medical school and from what I know it is eligible for the PSLF which is nice. I will try to definitely target eligible hospitals for my residency but see what I can do when the time comes. I definitely want to take out minimal loans, but it definitely seems like something i might want to do. Thank you!

 

[RangerBob]

I see. I will be attending medical school and from what I know it is eligible for the PSLF which is nice. I will try to definitely target eligible hospitals for my residency but see what I can do when the time comes. I definitely want to take out minimal loans, but it definitely seems like something i might want to do. Thank you!

Your choice of medical school doesn't impact PSLF since you can't make payments while you're in medical school. Nor are you employed by the school. You do have to borrow direct loans, which I think are your only options for federal graduate loans these days.

Most, but not all, residency programs are PSLF-eligible. Meaning that your employer is a non-profit/government agency. So that could be, UCSF or U Chicago for example. But be aware that many non-profit hospitals actually contract with for-profit physicians foundations/groups/etc, so it's not uncommon that a resident is eligible for PSLF while working at a particular site while their attending is not. However, some residency programs are at for-profit hospitals/systems, where the residents are not PSLF eligible.

There's lots of good info of PSLF (and finance in general) on the WhiteCoatInvestor blog, as well as Student Loan Planner.