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Residency loan repayment
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Try here!
http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp
It's less than 15% of salary because you get to subtract out 150% of poverty guidelines for your family size.
I think for a single person on an average salary the payments average $300/month.
http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp
It's less than 15% of salary because you get to subtract out 150% of poverty guidelines for your family size.
I think for a single person on an average salary the payments average $300/month.
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Thanks!! This is really useful. Looks like for the salary of $55,000, which is about average in my area, I'll be paying about $480 month, pretty crazy.
I keep hearing that some people are still able to defer. Is there any truth to this? Also, are there deductions made from monthly paycheck for health insurance premiums? Pretty ignorant about all this and trying to figure out if I can afford to live in some places on my rank list.
I keep hearing that some people are still able to defer. Is there any truth to this? Also, are there deductions made from monthly paycheck for health insurance premiums? Pretty ignorant about all this and trying to figure out if I can afford to live in some places on my rank list.
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If you don't mind interest accruing (and capitalizing if you don't pay it) the forbearance option still exists.
Yes, Health Insurance premiums are deducted from your paycheck as they are pre-tax deductions.
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Check the IRS rules but at salary a resident makes, you can deduct student loan interest against your tax liability and get money back. As an attending, you'll be making too much money to qualify for that deduction.
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Yes, some people who started residency this year have been able to defer with select lenders. However, since the new rules will already have been in effect for a year I doubt that anyone starting next year will be able to do it.
$480 a month isn't that terrible unless you were planning on paying $2K/month in rent or something like that.
$480 a month isn't that terrible unless you were planning on paying $2K/month in rent or something like that.
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55k? Really? Nice.
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Rent is like 1.5K for 1br.
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Jeeze with all the craziness of 4th year and interviews I had never heard this?! We can't defer our loans anymore for residency? I was planning on starting to pay it off but damn.
I guess it only makes sense to charge us up the you-know-what for school that it is only fair that we start paying it back our first paycheck in.
Such crap. Ok, I feel better now. Anyone have more info I can read up on this? What is the difference between deference and forebearance? I spelled that wrong...
I guess it only makes sense to charge us up the you-know-what for school that it is only fair that we start paying it back our first paycheck in.
Such crap. Ok, I feel better now. Anyone have more info I can read up on this? What is the difference between deference and forebearance? I spelled that wrong...
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I think the difference is that you don't accrue any interest when you defer in contrast to forebearance.
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In deferment the gov't continued to pay for the interest on the subsidized loans but the unsub. loans continued to accrue interest.
In forebearance the interest just keeps adding on to both types of loans.
In forebearance the interest just keeps adding on to both types of loans.
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I presume the 55K is before taxes and most likely the location is one with high cost of living given the $1.5K for a 1BR. That's pretty pricey but you should still be able to live decently if you keep other expenses down.
This is directly taken from the link provided above. So if you qualify for the Interest Based Repayment Plan (IBR), the interest could be paid on Subsidized loans by the gov't for 3yrs b/4 u take over. At least, that's my understanding.
"INTEREST PAYMENT BENEFIT - If your monthly IBR payment does not cover the monthly interest that accrues on the loans, the government will pay your unpaid interest on Subsidized Stafford Loans (either Direct Loan or FFEL) for up to three consecutive years from when you first enter IBR repayment. After three years, and for all the other types of loans, interest that accrues will be capitalized (added to the loan principal on which future interest is calculated) when the borrower no longer is eligible for an IBR repayment amount.)"
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In IBR the interest on subsidized loans could be partially covered by the government for the amount that isn't already covered by your payments is my understanding of that statement.
Given how small a portion subsidized loans are compared to your unsub loans, I'm not counting on the gov't chipping in at all.
Given how small a portion subsidized loans are compared to your unsub loans, I'm not counting on the gov't chipping in at all.
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My previous comment was incorrect...
LDS loans, which not everyone qualifies for, can still be deferred for ALL of residency, and 2 years of fellowship.
LDS loans, which not everyone qualifies for, can still be deferred for ALL of residency, and 2 years of fellowship.
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I thought this might be helpful.
From http://www.ibrinfo.org/faq.vp.html#_Will_forgiven_loan
Will forgiven loan amounts be taxed as income?
The U.S. Department of the Treasury determined that debt forgiven through PSLF is not considered taxable income under current law. That means that when you qualify for PSLF, you won't get slapped with a huge tax bill.
Unfortunately, the same good news doesn't extend to debt forgiven through IBR. In response, Congressman Sandy Levin (D-MI) is leading a bipartisan effort to ensure that borrowers who qualify for loan forgiveness through IBR (and Income Contingent Repayment) get the same treatment. Responsible borrowers with modest incomes shouldn't have to pay potentially crippling taxes on forgiven student loans. We are hopeful that this issue will be resolved before any borrowers qualify for forgiveness through IBR. We'll continue to work on this issue and keep you informed. Urge your representatives to support H.R. 2492. Learn more about the bill.
Will IBR and Public Service Loan Forgiveness remain available in the future, or could these programs be somehow taken away?
IBR and Public Service Loan Forgiveness were passed into law through the College Cost Reduction and Access Act of 2007, and any major changes to these programs would require new legislation to be passed by Congress and signed by the president. This is highly unlikely to occur in the foreseeable future, and we recommend that borrowers proceed with confidence.
Just to point out: the PSLF program is 10 years, and the forgiveness is not considered taxable income. The 25 year forgiveness, however, is currently considered taxable income. PSLF forgiveness is only available on Federal Direct Loans (which for those of us who haven't started school yet, it won't matter as they'll all be direct most likely). This does include consolidated Direct loans.
Who knows if it's worth it overall, but I'm sure some folks will benefit.
From http://www.ibrinfo.org/faq.vp.html#_Will_forgiven_loan
Will forgiven loan amounts be taxed as income?
The U.S. Department of the Treasury determined that debt forgiven through PSLF is not considered taxable income under current law. That means that when you qualify for PSLF, you won't get slapped with a huge tax bill.
Unfortunately, the same good news doesn't extend to debt forgiven through IBR. In response, Congressman Sandy Levin (D-MI) is leading a bipartisan effort to ensure that borrowers who qualify for loan forgiveness through IBR (and Income Contingent Repayment) get the same treatment. Responsible borrowers with modest incomes shouldn't have to pay potentially crippling taxes on forgiven student loans. We are hopeful that this issue will be resolved before any borrowers qualify for forgiveness through IBR. We'll continue to work on this issue and keep you informed. Urge your representatives to support H.R. 2492. Learn more about the bill.
Will IBR and Public Service Loan Forgiveness remain available in the future, or could these programs be somehow taken away?
IBR and Public Service Loan Forgiveness were passed into law through the College Cost Reduction and Access Act of 2007, and any major changes to these programs would require new legislation to be passed by Congress and signed by the president. This is highly unlikely to occur in the foreseeable future, and we recommend that borrowers proceed with confidence.
Just to point out: the PSLF program is 10 years, and the forgiveness is not considered taxable income. The 25 year forgiveness, however, is currently considered taxable income. PSLF forgiveness is only available on Federal Direct Loans (which for those of us who haven't started school yet, it won't matter as they'll all be direct most likely). This does include consolidated Direct loans.
Who knows if it's worth it overall, but I'm sure some folks will benefit.
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Under the income-contigent repayment plan I'm currently paying $650 per month, which doesn't even cover the total cost of my monthly interest payment.
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Income based repayment is a new, different program, that is actually less per month than ICR, and yes, neither cover the interest even... some people feel better paying atleast something instead of nothing...
Hi all, I would greatly appreciate any input, criticisms, comments or your personal experiences concerning the situation below. Please read through, taking special note of the bold items.
Quick run down: I'm a 4th year, graduate May, start Emergency Med residency in July, married (wife's salary max's around 32k), and a total student loan debt of approx. 270,000 (includes undergrad). Program allows lots of moonlighting, and lots of hours are available to work at the start of 2nd year (big reason I came here) at around 70 bucks an hour, then 80/hour 3rd year and over 100/hr as a 4th year. Undergrad was a business degree, bartended 30 hours a week through 1st two years of med school and currently during this last 6 months of 4th year. I don't come from a family with any money, so no input from them. My residency is in a low cost of living area, my salary sucks at around 40k first year, sum of assets are my used car and about 10k in checking account.
Goal: My wife and I want to buy our first home in the 200,000 range.
Problem: After learning much of the home buying process it seems we won't be able to afford what we want. This is attributed to unusually high property taxes in this area, the ABSOLUTELY RIDICULOUS IBR plan requiring immediate payment of loans, modest(relatively speaking)credit card debt, and our lack of cash and stable work history. All these "hidden" fees contribute to a crappy Debt/income ratio (the single greatest determining factor of you getting a mortgage)
Plan: Using a physican mortgage program with a 5/1 ARM loan thus gaining the lowest possible APR.
Outside the box idea: In order to defer Student loan payments of approximately 300 per month, which is a huge monthly count against our debt to income ratio, I would register for 6 credits of online courses at the community college near my current legal address and knock em out real easy in my free time. These cost only $100 per credit for "locals". Assuming I signed up for the summer semester now, I think that will keep all my Stafford, sub and un-sub, and grad plus loans at the "IN SCHOOL DEFERMENT" stage while our loan is being processed. I say that I think it would, even better without even needing to ask, apply, or beg for permission from the crooks er.. I mean Federal Student Loan Admin.
This would drop our Debt/Income ratio into an acceptable range allowing us to buy the house we want. Then after the summer and thereby the classes end, I would allow the Income based repayment to kick back in, and it won't matter cause we'll already have our house for a one time fee of $600! Factor in a 200,000 house payment including tax and insurance at the rates I mention is only around 1350.00 per month I think is pretty dooable on any residents salary. Once wife's job starts in late summer and moonlighting starts up within a year of closing I think we stand to come out on top without stretching ourselves too thin. Theoretically you could do this perpetually through residency if your monthly student loan payment is astronomical for whatever reason(or want to buy a big house like us), and inch you closer to a "normal" financial life by keeping your loans in an INTEREST FREE deferment state for around 1200-1800 per year depending on your local community college rates. As a bonus, the classes I plan to take are online real estate and business classes to refresh myself and prepare for my attending life when I have several start-up business ideas that I will take a run at once I get some nice ER attending cash flow.
So, am I bat s@#t crazy or just a crazy genius. YOU DECIDE!!! Thanks for any reply's or comments, hopefully this idea can help someone else.
Quick run down: I'm a 4th year, graduate May, start Emergency Med residency in July, married (wife's salary max's around 32k), and a total student loan debt of approx. 270,000 (includes undergrad). Program allows lots of moonlighting, and lots of hours are available to work at the start of 2nd year (big reason I came here) at around 70 bucks an hour, then 80/hour 3rd year and over 100/hr as a 4th year. Undergrad was a business degree, bartended 30 hours a week through 1st two years of med school and currently during this last 6 months of 4th year. I don't come from a family with any money, so no input from them. My residency is in a low cost of living area, my salary sucks at around 40k first year, sum of assets are my used car and about 10k in checking account.
Goal: My wife and I want to buy our first home in the 200,000 range.
Problem: After learning much of the home buying process it seems we won't be able to afford what we want. This is attributed to unusually high property taxes in this area, the ABSOLUTELY RIDICULOUS IBR plan requiring immediate payment of loans, modest(relatively speaking)credit card debt, and our lack of cash and stable work history. All these "hidden" fees contribute to a crappy Debt/income ratio (the single greatest determining factor of you getting a mortgage)
Plan: Using a physican mortgage program with a 5/1 ARM loan thus gaining the lowest possible APR.
Outside the box idea: In order to defer Student loan payments of approximately 300 per month, which is a huge monthly count against our debt to income ratio, I would register for 6 credits of online courses at the community college near my current legal address and knock em out real easy in my free time. These cost only $100 per credit for "locals". Assuming I signed up for the summer semester now, I think that will keep all my Stafford, sub and un-sub, and grad plus loans at the "IN SCHOOL DEFERMENT" stage while our loan is being processed. I say that I think it would, even better without even needing to ask, apply, or beg for permission from the crooks er.. I mean Federal Student Loan Admin.
This would drop our Debt/Income ratio into an acceptable range allowing us to buy the house we want. Then after the summer and thereby the classes end, I would allow the Income based repayment to kick back in, and it won't matter cause we'll already have our house for a one time fee of $600! Factor in a 200,000 house payment including tax and insurance at the rates I mention is only around 1350.00 per month I think is pretty dooable on any residents salary. Once wife's job starts in late summer and moonlighting starts up within a year of closing I think we stand to come out on top without stretching ourselves too thin. Theoretically you could do this perpetually through residency if your monthly student loan payment is astronomical for whatever reason(or want to buy a big house like us), and inch you closer to a "normal" financial life by keeping your loans in an INTEREST FREE deferment state for around 1200-1800 per year depending on your local community college rates. As a bonus, the classes I plan to take are online real estate and business classes to refresh myself and prepare for my attending life when I have several start-up business ideas that I will take a run at once I get some nice ER attending cash flow.
So, am I bat s@#t crazy or just a crazy genius. YOU DECIDE!!! Thanks for any reply's or comments, hopefully this idea can help someone else.
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to elite doc - i'm sorry but it doesn't really sound intelligent to spend money in order to avoid spending money... if you have that bad of a debt/income ratio maybe you should wait until you have paid off your credit card, or have some good savings for a down payment, before buying a house. it sucks not being able to buy when you want to, but you don't want to get over your head and the quicker you pay off your debts the better you will be. buying things we can't afford is how this whole country is now in the economic predicament its in. my advice - cut up the credit card, make more than your minimum payments as much as you can, eat some ramen noodles and save like a crazy person.
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Don't you have to be a "full time student" to qualify for in-school deferment? Thus, 6 hours over summer, I would assume would not qualify for this....just a thought...
To answer the last two posts:
1) I agree that spending more than you make is how problems begin but in my case I think your argument is moot. I'm VERY poor relative to my friends in med school with doctor, executive, and lawyer parents. I and my family would always be poor if I didn't take a gamble and assume the loans to enter medicine. The only way to make money is to spend money, medical school is a financial investment like any other.
You can certainly put me in the new majority of med students who would never have gone near this nightmare of headaches called medicine unless there was a large payday in the near future. The old days of house calls, holding hands and doing this work for "the love of it" are over my friends. Not just for me but for the hundreds of med students I've met over the last 2 years who's ONLY concern was what residency they would get to ensure they made enough money and could live in an area that provides for the standard of living they wanted. It's not about the work anymore, it's all a means to an end. Women med students who go into FP, Peds or OB usually have rich parents or a wealthy spouse. How many straight single guys have you met that want to enter any of those fields? None, why because there is no money in them. Every field of medicine becomes "just a job" after a while and medicine is the ultimate service industry, in the same family as restaurant work, retail sales and tourism, it's just the highest paying and has the best benefits of those. Don't fool yourself, as AC/DC said, "come on come on, kneel before the money!!"
Most people are on a fixed or extremely limited rate of salary appreciation but my salary will increase every year from now until the foreseeable future so why not invest based on that? I'm not talking about buying a 500k-1mil mansion, just a 200k house! Is that really too much to ask for or expect for the years of work I've put in? I'm sick and tired of sacrificing my standard of living based on a fear that the lazy, broke ass masses who want a free gov't health care handout will finally get what they want! Not trying to berate anyone here, and I do appreciate your points of view. I'm just a passionate, hard working thinker trying to get me and my family ahead of the rising poverty line.
2) From the Fed Student Loan website re: in school deferment
Eligibility Requirements
Maximum Time Limit: None
Requirements. You must be enrolled at an eligible school at least as a half-time student.
1) I agree that spending more than you make is how problems begin but in my case I think your argument is moot. I'm VERY poor relative to my friends in med school with doctor, executive, and lawyer parents. I and my family would always be poor if I didn't take a gamble and assume the loans to enter medicine. The only way to make money is to spend money, medical school is a financial investment like any other.
You can certainly put me in the new majority of med students who would never have gone near this nightmare of headaches called medicine unless there was a large payday in the near future. The old days of house calls, holding hands and doing this work for "the love of it" are over my friends. Not just for me but for the hundreds of med students I've met over the last 2 years who's ONLY concern was what residency they would get to ensure they made enough money and could live in an area that provides for the standard of living they wanted. It's not about the work anymore, it's all a means to an end. Women med students who go into FP, Peds or OB usually have rich parents or a wealthy spouse. How many straight single guys have you met that want to enter any of those fields? None, why because there is no money in them. Every field of medicine becomes "just a job" after a while and medicine is the ultimate service industry, in the same family as restaurant work, retail sales and tourism, it's just the highest paying and has the best benefits of those. Don't fool yourself, as AC/DC said, "come on come on, kneel before the money!!"
Most people are on a fixed or extremely limited rate of salary appreciation but my salary will increase every year from now until the foreseeable future so why not invest based on that? I'm not talking about buying a 500k-1mil mansion, just a 200k house! Is that really too much to ask for or expect for the years of work I've put in? I'm sick and tired of sacrificing my standard of living based on a fear that the lazy, broke ass masses who want a free gov't health care handout will finally get what they want! Not trying to berate anyone here, and I do appreciate your points of view. I'm just a passionate, hard working thinker trying to get me and my family ahead of the rising poverty line.
2) From the Fed Student Loan website re: in school deferment
Eligibility Requirements
Maximum Time Limit: None
Requirements. You must be enrolled at an eligible school at least as a half-time student.
- Complete, sign and date your form
- Include with your application the information described below:
- Certification Needed: Section 4 of your deferment form must be certified by an authorized school official such as your school's registrar.
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Just a reminder: don't forget to look into disability insurance (and coverage based on current vs. anticipated income). We all want to hope for the best, but should prepare for the worst.
Otherwise, I'm not well-versed enough in loan repayment options to have an opinion about your plan. Hope you find something that works for you.
Otherwise, I'm not well-versed enough in loan repayment options to have an opinion about your plan. Hope you find something that works for you.
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Hold on cowboy. Whether or not this idea of yours will work I have no clue, but it certainly is unique. Before you get all financially creative like this though, I think that you really need to consider whether or not buying is a good idea for you at this time. Start here (or pick one of the other 50-hojillion rent v. buy calculators on the intertron) and figure out whether you'll break even on this mythical $200K home in the period of time you'll be a resident. You may think you're going to stay there and practice after residency, but you have no idea at this point. And when you finish up and start having "a nice ER attending cash flow," are you going to want to keep living in that same $200K house? Probably not.
Just as an example, the default on that calculator compares a $200K mortgage (with 5% down) to rent of $1K/mo. At that point, you break even in year 4, which would be good for you. If your rent would be any higher than that, then buy away. If you could rent for $850/mo OTOH, your break even point is 10 years and renting is probably a much better idea.
Moral of the story is that, even if your plan would work (and again, I have no idea if it would), buying may not be the best idea for you at this time.
