Soon to be new attending - Job search considerations re: PSLF vs private practice

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lacrosse87

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Hi all,

I'm in my last year of fellowship in an outpatient-focused consultant specialty of IM, and should be starting the first attending job search right now about. Trying to figure out my next moves and figured I'd throw it out to the masses aka you lovely people. Apologize in advance for stream of conscious writing

I enjoy the outpatient setting much more than inpatient, and quite honestly don't really want to have to step foot into a hospital ever again (although I will miss my cafeteria meal allowance, but I digress). Also like the idea of autonomy, being able to set my clinic hours and see as many or little patients as I'd like depending on my stage of life. Want to hustle to pay off those loans? No need to moonlight elsewhere, I can just double down on my practice and work some extended hours (assuming the patients come)! That flexibility is very appealing, not to mention running the practice according to vision. Of course, realistically speaking, would likely need to look at multiple provider practices d/t start up costs, etc etc etc, but that's fine, especially w ability to bounce tough cases off each other built in to having partners.

In any case, one thing that's holding me back is the whole PSLF thing. Student loan-wise, I have more than most of ya'll. Chunk of both private from expensive full-sticker price undergrad, and with federal from med school in an expensive city, with the latter being over double the former.

PSLF-wise, to be employed seems to make a lot of sense financially. Only 5 more years of being employed and a the large monkey of federal student loans is off my back. Doing this, would also be incentivized to shelter as many clams away as possible (max 403b, 457, traditional roth). Also have a wife who could qualify as a real estate professional from tax perspective, which as long as we had documentation in order, would allow for the deduction of rental losses from joint tax returns (one could theoretically perform a cost-segregation analysis, and take advantage of bonus depreciation which is set to phase out over the next few years), and theoretically have even more money that could be forgiven at the end of the extra 5 years of PSLF. And then once you leave the 5-year employed position, 457 money can be taken out (albeit taxed as income), but allows for a nice influx of capital that is not age-penalized that was essentially sheltered from PSLF income calculations.

Howeverrr, I then think about the fact that, at the end of those 5 years at an employed position, living on hospital chicken nuggets, will I really want to leave? There's momentum, or lack-thereof which I fear may make me stagnate in an employed position, not practicing how I feel in my gut I truly want to practice. Also, if I was to transition, I'd be out 5 years of having my patient panel, or practice buy-in. Meanwhile, starting private practice now may bring home less in the short term (after accounting for paying full tax-bill, and less incentive to max retirement strategies as opposed to just paying the loans sooner), I do wonder if mid-late stage career if I'd overcome this initial loss due to the general yearly increased productivity in private, ie keeping what I earn as opposed to feeding the hospital admins off my labor, incentivizing me to bust my butt and work longer.

Then I can't help but think, is there some way to get the best of both worlds? Get a low-key employed position (PSLF requires 30 hrs per week), with the rest of the week (including weekends) somehow being spent in a private practice clinic that I'm working to buy partnership in? While hours in private practice would be less, at least the panel's being created, and I can start the buy-in process. Of course, not sure realistically how feasible any of that is. Finding two jobs that would be cool with that would be tough.

Any thoughts? Thinking too much? Prob
Any other last year fellows or last year residents trying to figure this -ish out? What are all of you guys doing?
Am I the only crazy person that hasn't spoken to any recruiters? Have the idea that I may have more bargaining chips on the table if whoever I'm negotiating with doesn't need to pay the recruiter fees too. Good idea / best idea / worst idea ever?
Only spoke to one employed job btw so far, and they said all bonuses are canceled d/t COVID. Is that the trend everywhere? Was that recruiter yanking my chain? What are all of you guys hearing??

Tldr; a last year fellow regurgitating scattered thoughts re job search. Nothing that interesting, recommend an alternative thread

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1. Do not count on PSLF. As you've seen if you've done even a little bit of Googling, virtually nobody (right now anyway) who should qualify is getting it.
2. You can be "academic employed" and still hustle and make mad cash if you like. Our academic community group is about to switch our comp plan from a good base + weak bonus structure to weak base + strong bonus structure. I just ran the numbers for myself the other day and I stand to make a little more than $100K more/year under the new structure than the old, which will put me in that storied $500K range

I'm 2y out from PSLF with this job, and I'll apply for it, but I'm not banking on it. I wouldn't have taken this job solely because of the PSLF option. It wasn't even a consideration.
 
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1. Do not count on PSLF. As you've seen if you've done even a little bit of Googling, virtually nobody (right now anyway) who should qualify is getting it.
2. You can be "academic employed" and still hustle and make mad cash if you like. Our academic community group is about to switch our comp plan from a good base + weak bonus structure to weak base + strong bonus structure. I just ran the numbers for myself the other day and I stand to make a little more than $100K more/year under the new structure than the old, which will put me in that storied $500K range

I'm 2y out from PSLF with this job, and I'll apply for it, but I'm not banking on it. I wouldn't have taken this job solely because of the PSLF option. It wasn't even a consideration.

Regarding your first point; that is not entirely factual. A main reason for this is two fold. 1) see below on direct loans. This was a huge deal and bc of the complexity of consolidation and having an approved idr plan, combined with... 2) there was a complete lack of good information back in 2007 and even we’ll into early 2010’s regarding this program. An Infinitesimally small proportion of med students who borrowed in 2007, 2008 and 2009 would’ve been actually up for forgiveness by now for these reasons. Many physician financial advisors who are very knowledgeable on this subject suspect 2020-2023 will seen exponential growth in forgiveness.

Don’t mistake the above for asking people to rely on the program. Not at all. Just want to make sure everyone has the facts bc there were some very scary articles that came out last year that didn’t tell the whole story

In the end we agree that you definitely shouldn’t take a job ONLY for it’s possible PSLF benefits. The whole picture should be weighed.

Edit: This is also helpful website and gives other explanations for why borrowers were denied or didn’t qualify.

 

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Regarding your first point; that is not entirely factual. A main reason for this is two fold. 1) see below on direct loans. This was a huge deal and bc of the complexity of consolidation and having an approved idr plan, combined with... 2) there was a complete lack of good information back in 2007 and even we’ll into early 2010’s regarding this program. An Infinitesimally small proportion of med students who borrowed in 2007, 2008 and 2009 would’ve been actually up for forgiveness by now for these reasons. Many physician financial advisors who are very knowledgeable on this subject suspect 2020-2023 will seen exponential growth in forgiveness.

Don’t mistake the above for asking people to rely on the program. Not at all. Just want to make sure everyone has the facts bc there were some very scary articles that came out last year that didn’t tell the whole story

In the end we agree that you definitely shouldn’t take a job ONLY for it’s possible PSLF benefits. The whole picture should be weighed.

Edit: This is also helpful website and gives other explanations for why borrowers were denied or didn’t qualify.


If the dems take over, I am sure they will implement a salary cap to forgiveness. They have already talked about loan forgiveness in the era of COVID and basically have been floating numbers of salary >200/250k will preclude you from forgiveness.

That being said, I think there will be reform in PSLF. Things that are already being tethered with forgiveness are working in rural areas. I wouldn't be surprised that they restrict forgiveness to certain physicians like PMD's.
 
If the dems take over, I am sure they will implement a salary cap to forgiveness. They have already talked about loan forgiveness in the era of COVID and basically have been floating numbers of salary >200/250k will preclude you from forgiveness.

That being said, I think there will be reform in PSLF. Things that are already being tethered with forgiveness are working in rural areas. I wouldn't be surprised that they restrict forgiveness to certain physicians like PMD's.

First of all, any changes to PSLF will not apply to borrowers already enrolled in a payment plan. Is this 100% fact? No, but legally with the mpns already in place it’s dubious to suggest people already in the program will be penalized. New borrowers? Sure I agree there.

Second, not to make this a political discussion (though you clearly already did) DeVos and trump administration has been pushing to end the program. So no matter what the dems push for it’ll be better than ending it outright. Obama also wanted to cap forgiveness at 57k which obviously didn’t happen. Please refrain from absolutisms as it pertains to legislative changes to this program, no matter from which party. For whatever reason from is unveiling in 2007, the PSLF program has been stubbornly unscathed though each party has sought to make changes

I’m sure there are better articles but here’s one

 
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First of all, any changes to PSLF will not apply to borrowers already enrolled in a payment plan. Is this 100% fact? No, but legally with the mpns already in place it’s dubious to suggest people already in the program will be penalized. New borrowers? Sure I agree there.

Second, not to make this a political discussion (though you clearly already did) DeVos and trump administration has been pushing to end the program. So no matter what the dems push for it’ll be better than ending it outright. Obama also wanted to cap forgiveness at 57k which obviously didn’t happen. Please refrain from absolutisms as it pertains to legislative changes to this program, no matter from which party. For whatever reason from is unveiling in 2007, the PSLF program has been stubbornly unscathed though each party has sought to make changes

I’m sure there are better articles but here’s one

Sensitive topic for you?

My bottom line remains the same. Don't take a job banking on PSLF. If you get it. Great. If you don't, don't be surprised.

There's nothing absolute in what I said. There's nothing political in what I said. I only made a political statement because student loan debt is a massive debate, is a very fluid conversation, and will largely be influenced by who is in office and who controls the house/senate. It is a government run program, is it not? Bernie was talking about erasing all student loan debt... (oh how I would love this). Do I think PSLF will go away? No. Do I think PSLF will change in its promises? Yes.

I am not going to get PSLF working in a for profit organization. Remind me the process. You make 120 approved payments and you can send in your "Certification" paperwork every now and then along the way. After 120 approved payments, you then apply for PSLF. There's nothing that locks you into or guarantees you PSLF prior to this. The cast of doubt I have is, you go through the app process with 120 approved payments and they deny you forgiveness. Correct me if I am wrong?
 
PSLF should be completely ignored in your job calculus unless you can apply for it this year. Paying the minimum on your loans to maximize your PSLF bonus while accruing 6.8% interest (7x what a bond fund is currently giving you in returns) is an expensive gamble. If you arent gambling on individual stock picks or bitcoin or whatever why are you doing it on PSLF?
 
PSLF should be completely ignored in your job calculus unless you can apply for it this year. Paying the minimum on your loans to maximize your PSLF bonus while accruing 6.8% interest (7x what a bond fund is currently giving you in returns) is an expensive gamble. If you arent gambling on individual stock picks or bitcoin or whatever why are you doing it on PSLF?

This is terrible advice (the bottom half). It’s true you shouldn’t base your decision on PSLF alone though.

Borrowers who have 250,300,400k in loans especially if in a decently high earning field it’s absolutely worth going for. There are a lot of scenarios in which you can make a lot of money AND qualify for PSLF and it’s well worth the risk. Not for everyone though

I HIGHLY recommend this website for anyone interested in PSLF or other physician financial matters

 
Well doing the math you are gambling x years (straight out of IM this is 7) of Y dollars of extra loan balance eating almost 7% interest on that in hopes that you get the entire thing written off. I dont know what your investor policy statement says but mine doesnt mention intentionally carrying high interest debt that has an unclear chance of being written off when I could, instead, pay down that high interest debt. This is particularly true in our record low interest rate environment when a similar investment with money that could be used to pay that debt earns so much less.

For reference every 10k per year in a CD at 1.1% vs paying 40k of debt off at 6.8% costs $570 annually in extra interest (im ignoring taxes but this number would be higher depending on your tax bracket if the CD is in a taxable account). If your debt is something ridiculous like 500k (arguably the biggest targets for PSLF and the people most likely to be using this to guide their job hunt) and you could afford to pay an extra 40k per year but instead dont because of PSLF over the next 7 years, that is the same as 'gambling' 64k over the next 7 years in interest costs in hopes that PSLF goes through.
 
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Well doing the math you are gambling x years (straight out of IM this is 7) of Y dollars of extra loan balance eating almost 7% interest on that in hopes that you get the entire thing written off. I dont know what your investor policy statement says but mine doesnt mention intentionally carrying high interest debt that has an unclear chance of being written off when I could, instead, pay down that high interest debt. This is particularly true in our record low interest rate environment when a similar investment with money that could be used to pay that debt ears so much less.

One of the reasons I said not for everyone is because of this huge factor. The absolute least amount of time you can be in training is 3 years essentially. You chose this amount of time arbitrarily yet this is not the reality for most Including the OP, so less than helpful. The average and median is probably 5 or 6 years of training. So if you’re really talking only about peds/IM/EM(some programs)/fam med alone without fellowships the calculus is less In favor of PSLF especially if the borrower is not interested in academics. For those in surgical or medical sub specialties, in which your training length is 5 years or more the calculus starts to shift in favor of PSLF given the general low ability to make large payments for many on a resident/fellow salary.

Your points about high interest debt are well taken. But at the end of the day I do have high risk investments and I do willingly take the risk of making lower payments to attempt to qualify for PSLF, as many others do. One size doesn’t fit all.

For those that spend 5-6-7 or more years in training it could actually be a minimal gamble to try for PSLF. I’d be happy to provide an example if you disagree
 
One of the reasons I said not for everyone is because of this huge factor. The absolute least amount of time you can be in training is 3 years essentially. You chose this amount of time arbitrarily yet this is not the reality for most Including the OP, so less than helpful. The average and median is probably 5 or 6 years of training. So if you’re really talking only about peds/IM/EM(some programs)/fam med alone without fellowships the calculus is less In favor of PSLF especially if the borrower is not interested in academics. For those in surgical or medical sub specialties, in which your training length is 5 years or more the calculus starts to shift in favor of PSLF given the general low ability to make large payments for many on a resident/fellow salary.

Your points about high interest debt are well taken. But at the end of the day I do have high risk investments and I do willingly take the risk of making lower payments to attempt to qualify for PSLF, as many others do. One size doesn’t fit all.

For those that spend 5-6-7 or more years in training it could actually be a minimal gamble to try for PSLF. I’d be happy to provide an example if you disagree

The math is the same. It boils down to a guaranteed 6.8% return which is about the averaged historical annual stock market return. I am a boglehead so telling me I should put money in Bitcoin or a particular hot stock so I can get 700% is the same as me telling you to go out and use your investment money to play blackjack. You might win for a while and come out ahead but play long enough and eventually everyone loses. I'll take a guaranteed 6.8% return without hesitation.
 
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