Public Service Loan Forgiveness

[alpinebrook]

What percentage of pathologists work for a non-profit organization? My understanding is that most hospitals are non-profit. However, many pathologists might "look" like they are working for a non-profit, but their services are actually contracted.

I'm asking because I'm really hoping that the Public Service Loan Forgiveness program is there for me in ten years -- about five of those years will be during residency (4 years residency + 1 year fellowship)... for the remaining five years, is there a pretty good chance I could be working for a non-profit?

For those of you who don't know about this program:

https://myfedloan.org/manage-accoun...rograms/public-service-loan-forgiveness.shtml

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[musom]

I am currently pursuing the PSLFP. I'm right at 5.5 years committed thus far. 4yrs of residency, 1 year of fellowship, and 1 year of practice. Remembering too, the first 6 months out of medical school is a non-qualified period, even if you make payments. I currently work for two institutions which qualify for PSLFP and plan to continue this relationship until my loans are (hopefully) forgiven. The plan has been active for 8 or 9 years now, so they gov't will start to forgive individuals soon. So we will see how this all pans out. My thoughts/hopes, even if they vaporize the PSLFP, all those individuals that have qualified previously would be grandfathered in. I hope and pray. Otherwise, I've thrown away hundreds of thousands away in interest and loss of potential income (being private versus employeed).

There was a significant benefit during training, as my monthly payments were based on my income, however now that my income has risen quite drastically, my monthly payments are maxed at the standard 10-year repayment plan cap. This will continue for another 4.5 years. That being said, it will still save me like 150k+ or something. Once "forgiven" that "income" is NOT taxable. A potential financial pitfall avoided.

Yes, most hospitals are non-for profit, especially all state-based institutions. That being said, as per my last conversation with the PSLFP people, even some "private" institutions may qualify. I think this has to do with them accepting such a large portion of government payors (medicare, medicaid) ? I dunno.

 

[icpshootyz]

Don't forget to consider potential pay differences in your calculations. For instance if you can land a private practice gig that pays significantly more than where you work now, then you might be better off just paying the loans instead of hoping they're forgiven. I was able to pay off a huge chunk of my loans in just my first two years out of fellowship, and now I'm just making minimum payments towards my remaining low-interest loans (both around 3%). Taking a $100K/year pay cut to save $200K in loans only works if you work there for exactly two years. But then again it would depend on what the pay difference was between various possible jobs.

 

[maji]

I always caution people wanting to do PSLF. It is a complete gamble. If you are with crap fed loans with interest rates over 7%, and you do 4 years of residency with 2 years of fellowship, only to get a great private practice job, then you have seriously hurt yourself when you could have refinanced at around 4%. In addition, there is lots of talk of the forgiveness being capped. Once the first payouts happen, the public may not be so happy with docs getting 200k payouts from the govt. If forgiveness gets capped at 60k, then you likely would have earned more in interest than if you had refinanced cheaper, making refinancing the better option. I think PSLF is not worth the risk, personally.

 

[HmanPath]

I always caution people wanting to do PSLF. It is a complete gamble. If you are with crap fed loans with interest rates over 7%, and you do 4 years of residency with 2 years of fellowship, only to get a great private practice job, then you have seriously hurt yourself when you could have refinanced at around 4%. In addition, there is lots of talk of the forgiveness being capped. Once the first payouts happen, the public may not be so happy with docs getting 200k payouts from the govt. If forgiveness gets capped at 60k, then you likely would have earned more in interest than if you had refinanced cheaper, making refinancing the better option. I think PSLF is not worth the risk, personally.

If they do cap the forgiveness at around 60k, then from what I have read it will most likely be for the people going forward, i.e. those that take out new loans from 2017 or whenever. It was being proposed that the cap would be tied into all income based repayments being made into one, the REPAYE. It sounds like the existing borrowers on track enrolled in one of the other, older income based payment plans would be "grandfathered" in to PSLF as it stands. The language is written into the MPN that we sign as borrowers, barring the requirements are met.

On the other hand, I do not have a crystal ball...or even an eight ball for that matter.

 

[maji]

Right. But hard to predict your own future. You could get an academic job for 160k out of training or you could get private for 220k and partnership options. I was recently offered a refinance with a private company for 4%, fed loans currently avg 7.7%..