So, I have a friend, who has 400K in student loans, it was 300K at the end of medical school, but increased to 400K because of 7.250% interest. This friend of mine has been enrolled in IBR, and has made 52 qualifying payments. But, she decided that she wanted to work her dream job, that sadly does not qualify for PSLF, and it is not extremely high paying. She is wondering if any of you have thought about this conundrum......Is there a job out there that does not require lots of time, but still qualifies. She's scheming to work a second job that qualifies that has low time demands. She knows about the '30 hr/week requirement.' So, does anybody have any thoughts about this issue. I told her to suck it up and just keep working at hospitals that qualify, but she says she loves her gig and doesn't want to leave it.
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- Thread starter pscyh2012
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6
666357
- No, it accrued to 400K bc she didn't pay anything on it in residency.
- This is not a conundrum, this is selfish and poor decision making.
- In all the investment and financial management books I've read, "scheming" has never been mentioned as a strategy for becoming debt-free.
- This is the USA. She has the right to make stupid decisions and you have the right to waste your time being co-dependent.
I left residency, opened my own private practice, paid 265K in school loans and outright bought two vehicles totaling 80K and put another 25K in savings- all of that within 30 months. A modest mortgage is now my only debt. I serve my community and there are three people who have health insurance and full-time jobs because of me. The best advice I could give to someone like your friend is to stop thinking of concepts like "employment" and "jobs" and recognize that your medical license is a commodity. Start thinking about how your license can allow you to generate revenue and focus on how to maximize both your earnings and write-offs and minimize overhead. Even if entrepreneurship isn't for her, by your account she has the opportunity to work in one or more jobs that better enable her to pay off her debt. Unfortunately, she's making a poor choice to take a low paying job with that amount of debt- and that's her choice.
If she pays the minimum payment on 400K, and pays back on the extended plan, she'll pay 375K+ in interest. Makes my stomach turn just thinking about it.
Even if you define a low paying job as 125-150K annually, she should still be able to pay her loans off at the regular plan which would cut her interest by over half, and she SHOULD be able to afford that unless she's living the lifestyle of a doctor. That's something I didn't mention- I didn't exactly live like a doctor during those first 30 months after residency. I wore the same clothes and finally bought new pants 7 years after residency started. I did buy new shirts over that time, but they were from Costco and cost 18 bucks per. I continued to live like a resident after I finished residency. She can also make the minimum payment up to 20 years and have the balance forgiven if I'm not mistaken (an incredibly poor choice).
Best advice? Get your head out of the clouds, quit this fantasy job, rejoin the real world, work your tail off, and get out of debt. She can be indulgent when such indulgences don't have decades-long consequences. I don't feel the least bit sorry for her. Her debt burden grew to such an extent by her own choice and it will continue to be a burden for many years to come because of continuing poor choices. I hope she understands the nature of these loans and how they can't be discharged in bankruptcy court and that if she continues to allow the interest to accrue then at some point she'll be unable to realistically pay them off.
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Maybe she can keep her ft pslf job and work her "dream job" part time in addition. Maybe she can find a way for her "dream job" to start paying better (i.e.: increasing receivables to be passed on to her as higher salary). Worst case she switches to the dream job when the loans are paid.
Contrary to previous poster, I certainly would suggest buying new pants when you graduate residency.
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Contrary to previous poster, I certainly would suggest buying new pants when you graduate residency.
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I'm honestly trying to figure out how a low-paying doc job doesn't qualify for PSLF.
M
MrWonderful
Can you elaborate on the structure of your practice that allowed you to aggressively pay down your loans? Seems incredible what you've done, and I'm just curious how you managed to get your practice up and churning so quickly. Are you insurance or private pay? High volume? Please share anything you are comfortable sharing. Young guys like myself appreciate this perspective!
D
deleted547631
In a little over five years she could have $400K+ forgiven while using IDR in a qualifying job. That's essentially a free house.
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How so?
D
deleted547631
She's already at 52 out of 120 qualifying payments for PSLF. Might as well go for the finish. 120th payment equals over 400 thousand forgiven, tax-free.
6
666357
Insurance, all the main carriers except medicaid. Once you're paneled the insurance companies send pts to you. During the first 6 months I moonlighted while building my clientele, then switched to fulltime outpt. I see ~ 18 pts a day. I dictate and have a staff member that transcribes my notes. I arrive at 9a and leave at 5p- like clockwork, BUT during the first 6 months there was a much larger time investment required given the learning curve but it was worth it. I don't take lunch, but sneak a sandwich in between pt visits. This is the volume that I'm comfortable with. More is too stressful, less is too stressful. Your mileage may vary.
I could squeeze a few more nickels still. I could stop taking Cigna or Tricare. They account for a small percentage of my patients and don't pay as well as other carriers. They'd be easily replaced with patients that have coverage from other plans. But no one else takes them in town and I like those patients, so I choose to continue treating them and staying paneled with those carriers.
Another thing I did around months 8-12 was run Saturday clinics twice a month where I saw no one but new patients, to whittle the wait-list down (My schedule is fully booked 3 months in advance). But at this point I can't manage that patient load and I only see enough new pts to offset those lost to attrition.
The first week I opened, I went by all the local PMD's offices, met with many of them, and sent letters with flyers to about 4 dozen other docs in the area. PMD's often prefer to refer psych pts when possible.
PM me and I can discuss this more in depth later.
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