I just wanted to note that under [FONT=arial, helvetica]the College Cost Reduction and Access Act of 2007, student loan debt is discharged after 10 years of employment in a "public service" occupation. I haven't dug too far into the specifics of this legislation, but there are several scenarios in which it could benefit psychiatrists.
If, for example, you completed both your residency and first 6 years of post-residency practice at a non-profit institution, you would certainly qualify for loan forgiveness. That means, if you used an income-based repayment (IBR) plan and made loan payments during residency, your loans would be forgiven 6 years after residency. IBR requires you to pay only 15% of your annual income that exceeds the poverty level ((Adjusted Gross Income - poverty level) * .15). Thus, someone earning $50,000 as a resident would only be required to repay about $325/month. The payment amount under IBR is capped at the amount you would pay under a standard 10-year repayment. So, when you take that post-residency position, you'd be paying no more than $3,000 on a $250k loan for the remaining 6 years until the loan is forgiven. If you run the numbers, you'd end up only repaying about $230k of the $250k loan over a 10-year period. If you calculate the amount of interest you would otherwise pay over these 10 years, there is the potential for savings of over $250k under this program. This is an unbelievable deal if you can take advantage of it. Just something to think about.
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