SDN members see fewer ads and full resolution images. Join our non-profit community!

Student Loan Calculator showing different income driven repayment options

Discussion in 'Financial Aid' started by Student Loan Planner, Jan 9, 2017.

  1. SDN is made possible through member donations, sponsorships, and our volunteers. Learn about SDN's nonprofit mission.
  1. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    I've created a student loan repayment calculator that I think many of you will find useful. Just enter your information in the inputs tab and then check out the results on the 'Main page' tab. The file is 9MB which is above the allowed file size for SDN, so here's the link the download it for yourself: https://www.studentloanplanner.com/free-student-loan-calculator/. You might have to click the 'enable editing' yellow banner that might appear to be able to enter information.

    Delete the prefilled info and enter your own.

    This is what the input tab looks like below. Please let me know what you think about the spreadsheet. I appreciate any feedback. Mods if this isn't the right place to post this please let me know and I'll happily move it to whatever place it's supposed to be in.

    [​IMG]
     
    JerryMouse and Nguyen2017 like this.
  2. SDN Members don't see this ad. About the ads.
  3. ReneeM

    ReneeM

    57
    49
    May 25, 2016
    Is there a reason ICR isn't included in your calculator? I notice the AAMC Debt Manager excluded it in its calculations as well.
     
  4. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    I've never seen ICR come up as an attractive repayment option. There's no awesome interest or forgiveness benefits compared to IBR, PAYE, and REPAYE. If you are going to pay 20% of your income to your loans, you would refinance. ICR is like an appendix, I have no idea why it exists
     
    ReneeM likes this.
  5. 68PGunner

    68PGunner 5+ Year Member

    2,354
    1,914
    Sep 16, 2012
    Fantastic tool. Thank you.
     
  6. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    Thanks glad you like it. Feel free to spread it around
     
  7. rassulwest

    rassulwest

    86
    36
    Jan 20, 2017
    Thank you so much for the tool. I now just need to figure what all this loan stuff means....preparing for professional school is hard lol
     
  8. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    If you have any questions about the spreadsheet or what any of it means, please feel free to post it here and I'll do my best to respond. Hopefully a lot of people benefit from using it
     
  9. Manic324

    Manic324

    110
    65
    Apr 23, 2016
    Do you think REPAYE is the best option for those with 500k in debt at graduation? That's what Im getting from this- It seems unrealistic to be able to pay the standard or even extended monthly payments.
     
  10. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    It's between REPAYE and PAYE. The REPAYE option is good for keeping the balance lower and under control bc it has an interest subsidy. The downside is its a 25 year repayment term until forgiveness.

    PAYE is good for getting the debt resolved sooner, but it will always result in higher forgiven balances on which you'll pay tax compared to REPAYE bc PAYE has no interest subsidy. The upside is PAYE has a 20 year forgiveness term.

    Financially, PAYE seems to come out as having a lower cost when taking into account inflation and the future value of money, however it's a higher risk option. Also, PAYE is better suited to folks who never plan on being a practice owner. If you use REPAYE to keep the debt growing more slowly, then there's a more viable path available if you suddenly had a huge income from owning your own practice bc the debt would be smaller.

    So in short, long term corporate associate with >500k debt -> PAYE. Associate looking to own your own practice one day and possibly repaying the debt with a higher income -> REPAYE
     
    Nguyen2017 likes this.
  11. 68PGunner

    68PGunner 5+ Year Member

    2,354
    1,914
    Sep 16, 2012
    What is this interest subsidy difference between PAYE and repaye?
     
  12. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    Say you have $200,000 of debt and have a $50,000 resident salary. You have a 6% interest rate. The annual interest charge is $12,000. Under PAYE and REPAYE, your monthly payments would be the same. Say your yearly payment under each program is $2,000.

    With PAYE, you take $12,000 subtract $2,000 and have $10,000 leftover that gets added to the accrued interest amount. With REPAYE, they take $12k minus $2k and get $10,000, but then they divide that by 2. Only $5,000 therefore gets added to your accrued interest. However, PAYE has a 20 year forgiveness period and REPAYE has a 25 year forgiveness period. So there's benefits and drawbacks to each one
     
  13. Manic324

    Manic324

    110
    65
    Apr 23, 2016
    Do you foresee any of these programs going away? Are we basically guaranteed these programs for current loans borrowed (lets say if were in 2nd year now)?
     
  14. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    Definitely not guaranteed. Trump's plan is to replace both with a 12.5% income 15 year repayment option. That would be more generous than both REPAYE and PAYE. So I doubt the Congress would want to pass it. I modeled it in the spreadsheet though for people to look at it. We'll have to wait as student loans are pretty far down the priority list for them.
     
    Kwon likes this.
  15. rassulwest

    rassulwest

    86
    36
    Jan 20, 2017
    So if you were under PAY or REPAYE option. Could it be modified effectively changing the person current re-payment options? Also if you were on one of these option could you be grandfathered into Trumps new plan? Finally, are all these re-payment options available to every debt holder?
     
    Last edited: Jan 31, 2017
  16. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    Yes Trump could eliminate REPAYE and PAYE w a stroke of a pen. They're executive orders from Pres Obama. If they got rid of REPAYE and PAYE folks on it would probably be transitioned to the new option. PAYE is only available if you first borrowed after 2007 and REPAYE only if they're direct loans
     
  17. rassulwest

    rassulwest

    86
    36
    Jan 20, 2017
    How does marriage in reference to filing jointly and separately work in these loan forgiveness programs? i understand the basic of PAYE( possibly my best option beside trump hypothetical plan) using both incomes to determine how much will be paid. from your calculator is seem like in order to pay the least amount of debt a couple will need to file separately for 20-25 years of they marriage(loan duration time)? if they ever filed jointly during that time the payment plan could be drastically changed for the following year but could be reverted back to normal if they filed separate the next year, is that correct?
     
  18. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    That's correct but I almost never suggest clients to file separately. There are high tax consequences associated with doing this that often outweigh the lower loan payment
     
  19. rassulwest

    rassulwest

    86
    36
    Jan 20, 2017
    the difference of filing jointly and separately could increase the debt over 100k. what are the high tax consequences that make you suggest joint filing? Also, will filing jointly offer a greater ability to pay off an extra .5-1k a month toward student loans? it seems to me once a person file jointly on PAYE they would pay around 3k monthly compared to 2.3K monthly separately( this is based of your default planner and assuming they are saving monthly for the tax bomb). once a person is a the 3k mark monthly wouldn't they generally be better off on some type of 15 year payment plan?

    my view is limited but these income based repayment seem like a stall tactic used that will greatly benefit people who will some how make TONS in they occupation( not normal), get super lucky in investing, or people getting inheritance. Beside setting the money away every month im lost on how to best approach the upcoming tax bomb.
     
    Nguyen2017 likes this.
  20. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    That's what I help people with in consults. But the short answer is that filing separately costs you a lot of tax credits like for children and other things. Also it bumps you into a higher marginal bracket. So maybe before filing separate it was 30% after filing separate its 35%. If you and your spouse both made $200,000 combined then that's an extra $10,000 to taxes and you only saved $1,000 a month on loans so its a wash. Have to involve a CPA though to know for sure what the consequences are
     
  21. rassulwest

    rassulwest

    86
    36
    Jan 20, 2017
    thanks, to be sure i understand your example, you are saying that filing separately could cause me to spend a extra 10k in taxes but filing jointly would reduce taxes(lower than filing as single or married seperately?) but cost an extra 12K( 1k/month for a year) in debt that year? i see 2k saved filing separately here...but I know this is just an example and our situation may differ

    I will have to look more into the pros and cons for both. Im still pre-dent so I have plenty of time lol....But putting aside children and cost related to them. Would in general filing separately be more or equal to filing as a single person?
     
  22. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    Equal w/ separate and single in terms of student loan cost. Anybody who's thinking of doing separate needs to talk to a CPA
     
  23. rassulwest

    rassulwest

    86
    36
    Jan 20, 2017
    thanks student loans make marriage difficult lol
     
  24. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    Thanks to income driven repayment options, you're always economically better w your spouse than without
     
  25. lp12

    lp12 5+ Year Member

    61
    1
    Aug 30, 2011
    I'm planning/hoping on utilizing PSLF for forgiveness in 10 years. With my projected academia/non-profit income I would never exceed the Standard 10 year repayment plan amount and may not ever even exceed the monthly interest accruing on my $160k debt (ugh) by myself. I've been modeling a few situations to pick the right plan moving forward (just entered repayment).

    If I stay on the PAYE plan and then file taxes separately if I get married in 5 years (just to model how this would work) I'd pay ~$60k to the DOE over 10 years, and my loan amount would balloon to ~$200k.
    If I moved to the REPAYE plan and file taxes jointly with a hypothetical spouse at the same projected income the last 5 years I'd pay ~$110k to the DOE and have my remaining loan balance be ~$140k.

    Lots and lots of hypotheticals there but from your response above in this scenario it sounds like I'd just be shifting where I pay that extra $50k (DOE vs. IRS) due to the tax hits associated with filing separately, is that right?

    At this point it seems like just biting the bullet and committing to REPAYE despite any hypothetical spousal income may be my best option. Even though I'd likely pay more to the DOE in that time I could avoid the hassle/cost of filing separately and pay my loans down somewhat in case PSLF doesn't work out or becomes a tax bomb with changes to the forgiveness in the next 10 years. Am I missing some major component in that assessment?
     
  26. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    That's a fine approach I think. I really discourage people from filing separately bc you don't get any benefit from paying extra in taxes. Even if you in theory save a bit, there's not 100% certainty that PSLF / forgiveness won't change for the worse so might as well have a lower forgiven balance. Also you can switch from REPAYE to PAYE right before you get married, at least now
     
  27. YoungDoc25

    YoungDoc25

    801
    638
    Dec 21, 2015
    If you're looking at ~150k total in loans (undergrad + med school), is your best bet to just refinance to as low of a fixed rate as possible? Would loved to be debt free ASAP
     
  28. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    Kinda depends on things like family status spousal income, what specialty you're going into, etc. If it's a 5-7 year residency program you can use something like PAYE to cap your payments and still get some forgiven on PSLF. Certainly below 150k for a doc that's when just getting out of debt vs PSLF becomes a real question mark as to which one is better. We decided to refinance ours because it was going to be another 7.5 years until forgiveness for my fiancee (a few forbearances and loan consolidations along the way)
     
    YoungDoc25 likes this.
  29. YoungDoc25

    YoungDoc25

    801
    638
    Dec 21, 2015
    Somehow I just saw your response, but I appreciate the feedback! Wife should be making 60k+ as a nurse, but I hadn't thought about family status much. Throwing a kid or two in there definitely begins to stretch finances haha
     
  30. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    Weirdly, having lots of kids is actually encouraged under federal student loan rules, as they give you a deduction of 150% of the federal poverty line for your family size from your income before taking 10% to 15% of it and sending you the monthly student loan bill
     
  31. DaTruMD

    DaTruMD 7+ Year Member

    454
    75
    Jan 9, 2008
    This thread is so helpful. Thanks OP.
     
  32. DaTruMD

    DaTruMD 7+ Year Member

    454
    75
    Jan 9, 2008
    How often does the government make the interest subsidy payments if you are in the REPAYE program? Every month, every year, or...?
     
  33. sazerac

    sazerac rye sense of humor 5+ Year Member

    2,002
    2,094
    Feb 26, 2012
    Every month. It literally shows up as an extra contribution in some lenders' monthly statements.
     
    DaTruMD likes this.
  34. sergeantpepper

    sergeantpepper

    6
    0
    Aug 31, 2016
    Is it possible to enter our spouse's loans as well?
    I believe this would make a difference in the minimum payments correct?

     
  35. Student Loan Planner

    Student Loan Planner

    261
    503
    Dec 13, 2016
    If you enter in the total loan balance yours and spouses then that should work. Only issue would be if one was going for PSLF and one wasnt
     

Share This Page