Public Service Loan Forgivenes, Non vs. For-Profits & EM

[Mechanic]

I am a student making the transition to PGY-1 in EM this June. There was a good talk at ACEP/EMRA by GL Advisor for the students in San Francisco where they really advocated for students to do the Income-Based Repayment (IBR), then apply for the Public Service Loan Forgiveness (PSLF) to have your loans forgiven after 10 years of consecutive monthly payments. This is contigent upon working for not-for-profit institutions like most hospitals. Now this seems very nice for those with a ton of debt as a large chunk of that debt may be forgiven, especially the longer the training. You may accrue interest, but after 10 years I imagine some will be forgiven 100-200K even.

However, it seems that physicians groups are growing and becoming a large segment of EP market. I was wondering what peoples takes are on how widespread, and where these physician groups are generally concentrated. I imagine that physician groups do not qualify for the not-for-profit status and I probably wouldn't qualify for PSLF, and therefore IBR makes less sense as one would accrue probably much more interest to be capitalized. Just weighing my options as I prepare to start paying off my huge student loan debt. Thanks for the input!

---

Members don't see this ad.

 

[sylvanthus]

Excellent question and I was wondering the same thing. Will definately keep an eye on this thread.

 

[Docuronium]

One of the best questions I've seen around here in a while and I'd love it if someone could give a good response to this.

 

[deleted109597]

The people that can give the best answers to this likely aren't on this forum.

 

[Cynic]

If I recall correctly, the stat I heard, though not sure from where, is that about 75-80% of emergency medicine physician are employed by groups (that by nature are not a 501c3) and thus aren't eligible for the PSLF program. I'm sure jobs can be found where emergency physicians work as employees of the hospital (which in some, if not most cases is a 501c3), but I don't think these constitute the majority. As to where these groups are concentrated, I'm not so sure.

Furthermore, you have to ask yourself the question, what is the pay difference between the two different positions? I would speculate that more competitive opportunities exist working for groups, though I have little evidence to support that on hand. Does it really make sense if you take a $50K/yr pay cut spread over 7 yrs? (10 yrs/120 payments - 3 years residency already counted towards the program). Even if you got, say, 200K worth of debt forgiven, you'd still have to have a salary difference of less than $28K ($200K/7 years) to consider it equivocal or even worthwhile.

IBR still makes sense, however, even if you rule out the PLSF program. It's the only way to make meaningful dents in your student loans during residency, and helps pay off some of the interest accruing, which can be beneficial to your bottom line.

And lest you forget....This is CONGRESS. The two groups that will take advantage of this with sizeable debts are lawyers and physicians...This loan forgiveness program was signed in in 2007, with no provision for grandfathering people in who make, say, 110 consecutive payments. Sure, they might sign something that grandfathers people in, but they are not under any obligation to. However, if they do away with the program, you're left with a loan balance that's bigger than it ordinarily would have been, paying a lot more in interest. Figure that in 2017 (the first year that loans will be forgiven for the people who enrolled as soon as the program started), the government will start to realize the cost of all this, and say, "Hey, we don't have any money, and voters don't really care much for lawyers and physicians..." If you think class warfare in the political arena is bad now, just wait...There's probably nothing the government would rather do than collect more interest than ordinarily would have been due, on the backs of the naive, trusting, "rich" physicians.

So here's what I plan to do: Use IBR to cut the amount of loans/interest down in residency within what I can reasonably afford. Apply for PSLF in residency, and if you find the perfect job after residency that meets PSLF criteria, so much the better. But don't choose employment solely because they'll get your loans forgiven. You may be able to pay them off yourself faster with the increased income you'd get from working for a group.

 

[SoCuteMD]

And lest you forget....This is CONGRESS. The two groups that will take advantage of this with sizeable debts are lawyers and physicians...This loan forgiveness program was signed in in 2007, with no provision for grandfathering people in who make, say, 110 consecutive payments. Sure, they might sign something that grandfathers people in, but they are not under any obligation to. However, if they do away with the program, you're left with a loan balance that's bigger than it ordinarily would have been, paying a lot more in interest. Figure that in 2017 (the first year that loans will be forgiven for the people who enrolled as soon as the program started), the government will start to realize the cost of all this, and say, "Hey, we don't have any money, and voters don't really care much for lawyers and physicians..." If you think class warfare in the political arena is bad now, just wait...There's probably nothing the government would rather do than collect more interest than ordinarily would have been due, on the backs of the naive, trusting, "rich" physicians.

So here's what I plan to do: Use IBR to cut the amount of loans/interest down in residency within what I can reasonably afford. Apply for PSLF in residency, and if you find the perfect job after residency that meets PSLF criteria, so much the better. But don't choose employment solely because they'll get your loans forgiven. You may be able to pay them off yourself faster with the increased income you'd get from working for a group.

While the bolded may be true, don't forget that Congress is actually made up of lawyers who are, supposedly, in public service.

Otherwise good post

 

[docB]

If I recall correctly, the stat I heard, though not sure from where, is that about 75-80% of emergency medicine physician are employed by groups (that by nature are not a 501c3) and thus aren't eligible for the PSLF program. I'm sure jobs can be found where emergency physicians work as employees of the hospital (which in some, if not most cases is a 501c3), but I don't think these constitute the majority.

This :thumb up:.

While the bolded may be true, don't forget that Congress is actually made up of lawyers who are, supposedly, in public service.

Otherwise good post

I don't think that members of Congress can be held out as selfless public servants who have forsaken the almighty dollar for the public good. Those guys do really well particularly after they leave office.

 

[MT Headed]

So here's what I plan to do: Use IBR to cut the amount of loans/interest down in residency within what I can reasonably afford. Apply for PSLF in residency, and if you find the perfect job after residency that meets PSLF criteria, so much the better. But don't choose employment solely because they'll get your loans forgiven. You may be able to pay them off yourself faster with the increased income you'd get from working for a group.

There is no PSLF to apply to when you are in residency. PSLF a benefit you apply for after you have done 10 years of public service and made all of the intervening IBR payments on time.

http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp#Q10

 

[Docuronium]

There is no PSLF to apply to when you are in residency. PSLF a benefit you apply for after you have done 10 years of public service and made all of the intervening IBR payments on time.

http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp#Q10

http://www.youtube.com/watch?v=UiSBc1F4bJs&feature=related

This video series seems to state that it does, and supposedly comes from the AAMC.

 

[gman33]

We had a lecture from AAMC.
They said you don't need to apply for anything.
Just do IBR and have 10 years public service.
You apply after all that is done.

My guess is congress will get rid of this once they start forgiving loans for rich docs.
I matched at a place that is for-profit, so I don't really care about this anymore.

 

[Dane07MD]

I've spoken with a couple of docs who DO work for 501c3 organizations (EM docs mind you) and they report that it is damn near impossible to find ANYONE who can give a straight answer on this topic and they are 99% certain it's impossible to get the government to forgive any kind of debt, especially for doctors and lawyers who are fully capable of forking over the dough to the government. I'd guess that maybe a few years worth of people will benefit from this, but as someone pointed out, this can't last long as the government realizes they are giving money to already wealthy docs.

As an aside, IBR really only makes a whole lot of sense for someone entering primary care, or perhaps EM. If you enter ortho, neurosurg, etc, the "income-based" rate will probably allow you to pay back your loans in 10 years anyhow. And let's not get started on the fact that if you're married and filing jointly with someone who makes any decent amount of money, because IBR counts the spouse income too. IBR/PSLF is in theory a sweet program for primary care unmarried individuals. Otherwise, seems like a lot of nonsense to go through that may in the end actually hurt you more than help you if the government reneges on this program.

 

[TeamZissou]

so here's what i plan to do: Use ibr to cut the amount of loans/interest down in residency within what i can reasonably afford. Apply for pslf in residency, and if you find the perfect job after residency that meets pslf criteria, so much the better. But don't choose employment solely because they'll get your loans forgiven. You may be able to pay them off yourself faster with the increased income you'd get from working for a group.

+1