Hi, I wanted to know if any residents out there had any insights on the following. Is it true that certain residents would not qualify for Public Service Loan Forgiveness under IBR because they work for for profit hospitals such as Drexel residents working at Hahnemann University Hospital?
Student Loan Forgiveness
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I have a limited knowledge on this topic, but my school just gave us a presentation on finances and they said in order to obtain Public Services Loan Forgiveness, you need to have made 120 monthly payment of your loan while working for an NON-profit organization. I believe working at any hospital as a resident is considered working at non-profit organization. Whether or not Hahnemann Hospital is for-profit or not only comes to play after you become an attending. I'm not 100% sure though.
Also, the 120 monthly payment of the loan does not have to be consecutive payments. Therefore you can make payments during residency, leave to go to a private hospital, then go back to non-profit organization. Only the payments made during residency and non-profit organization will count toward the 120 payments.
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Well in the research that I've done on the matter, Drexel residents are considered to be empoyed by Hahnemann University Hospital(which is a for profit hospital). I'm just trying to figure all this out for my GF who's going through the match. Its too late to worry about it now I suppose until we find out but based on my research, I do not believe residents at Drexel are elibigle to participate and the 3-5 or more years they spend there would not count as part of the ten years. I could be wrong but I wanted to see if anyone else had any concrete information.
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Qualifying employment is any employment with a federal, state, or local government agency, entity, or organization or a non-profit organization that has been designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC). The type or nature of employment with the organization does not matter for PSLF purposes. Additionally, the type of services that these public service organizations provide does not matter for PSLF purposes.
A private non-profit employer that is not a tax-exempt organization under Section 501(c)(3) of the IRC may be a qualifying public service organization if it provides certain specified public services. These services include emergency management, military service, public safety, or law enforcement services; public health services; public education or public library services; school library and other school-based services; public interest law services; early childhood education; public service for individuals with disabilities and the elderly. The organization must not be a labor union or a partisan political organization.
http://www.studentaid.ed.gov/repay-...harts/public-service#what-kinds-of-employment
I saw that earlier as well. There are one or two other sources that appear slightly more vague on what qualifies. I agree with you that they are probably not eligible. I'd still like to hear from a Drexel resident if anyone out there is one for the end all be all on the matter.
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You're not going to find that answer because no one has applied for PSLF yet (first eligible applicants come up in 2017). Any resident at Drexel who answers this question is going to be guessing. The only way a for-profit institution qualifies is if they provide "public health services". My guess is, knowing how government works, the word "public" is going to be the Achille's heel for people at private hospitals - if it weren't, why was it included? Aren't health services, you know, health services?
In January of last year, congress approved and released the Public Service Loan Forgiveness Certification Form. I was basically wondering if anyone at Drexel had submitted such a form and received any kind of response? It would seem if you submitted the form, you would at least get some kind of indication as to whether you'd done the proper thing or not(actually, it doesn't seem that way, but it seems that it should seem that way).
How can I keep track of my eligibility?
Because it will take at least 10 years for you to make the 120 qualifying payments necessary to receive PSLF, we have created a form that you should submit to us and a process that you should follow so that we can assist you in tracking your periods of qualifying employment and your qualifying payments.
The form allows you to get your employer's certification of employment while you are still employed at that organization or shortly after leaving. The process allows you to receive confirmation of qualifying employment and your Direct Loan payment eligibility. You may also submit the form less frequently than annually to cover more than one year's employment or for more than one employer.
While use of this form and process is not required, if you want us to keep track of your progress toward meeting the PSLF eligibility requirements, you should follow the steps below. If you do not periodically submit the form, you will still be required to submit a form for each employer that you want considered for PSLF at the time that you apply for forgiveness.
Step 1 — Complete, with your employer's certification, the Employment Certification for Public Service Loan Forgiveness form (PSLF Employment Certification) annually or whenever you change jobs.
Step 2 — Submit the completed form to FedLoan Servicing, the PSLF servicer, following the instructions on the form.
Step 3 — FedLoan Servicing will review your PSLF Employment Certification form, ensure that it is complete, and, based on the information provided by your employer, determine whether your employment is qualifying employment for the PSLF Program.
Step 4 — If the form you submit is incomplete or your employment does not qualify, FedLoan Servicing will notify you and you will have an opportunity to provide additional information.
Step 5 — If FedLoan Servicing cannot determine whether your employment qualifies, you may be asked to provide additional information or documentation to help establish whether you were employed by a qualifying public service organization. This documentation may include an IRS Form W-2, pay stubs, or other documents from your employer that substantiate your employment at the organization or documentation supporting your employer's eligibility as a public service organization.
Step 6 — If your employment qualifies and some or all of your federally held loans are not serviced by FedLoan Servicing, those loans will be transferred to FedLoan Servicing so you will have a single loan servicer for all of your federally held loans. After your loans are transferred, earlier payments made to other servicers will be evaluated to see whether they are qualifying PSLF payments.
Step 7 — FedLoan Servicing will notify you whether your employment qualifies, and, if so, how many payments during the certification period were qualifying payments, the total number of qualifying payments you have made, and how many payments you must still make before you can qualify for PSLF.
Same Source you cited earlier.
Because it will take at least 10 years for you to make the 120 qualifying payments necessary to receive PSLF, we have created a form that you should submit to us and a process that you should follow so that we can assist you in tracking your periods of qualifying employment and your qualifying payments.
The form allows you to get your employer's certification of employment while you are still employed at that organization or shortly after leaving. The process allows you to receive confirmation of qualifying employment and your Direct Loan payment eligibility. You may also submit the form less frequently than annually to cover more than one year's employment or for more than one employer.
While use of this form and process is not required, if you want us to keep track of your progress toward meeting the PSLF eligibility requirements, you should follow the steps below. If you do not periodically submit the form, you will still be required to submit a form for each employer that you want considered for PSLF at the time that you apply for forgiveness.
Step 1 — Complete, with your employer's certification, the Employment Certification for Public Service Loan Forgiveness form (PSLF Employment Certification) annually or whenever you change jobs.
Step 2 — Submit the completed form to FedLoan Servicing, the PSLF servicer, following the instructions on the form.
Step 3 — FedLoan Servicing will review your PSLF Employment Certification form, ensure that it is complete, and, based on the information provided by your employer, determine whether your employment is qualifying employment for the PSLF Program.
Step 4 — If the form you submit is incomplete or your employment does not qualify, FedLoan Servicing will notify you and you will have an opportunity to provide additional information.
Step 5 — If FedLoan Servicing cannot determine whether your employment qualifies, you may be asked to provide additional information or documentation to help establish whether you were employed by a qualifying public service organization. This documentation may include an IRS Form W-2, pay stubs, or other documents from your employer that substantiate your employment at the organization or documentation supporting your employer's eligibility as a public service organization.
Step 6 — If your employment qualifies and some or all of your federally held loans are not serviced by FedLoan Servicing, those loans will be transferred to FedLoan Servicing so you will have a single loan servicer for all of your federally held loans. After your loans are transferred, earlier payments made to other servicers will be evaluated to see whether they are qualifying PSLF payments.
Step 7 — FedLoan Servicing will notify you whether your employment qualifies, and, if so, how many payments during the certification period were qualifying payments, the total number of qualifying payments you have made, and how many payments you must still make before you can qualify for PSLF.
Same Source you cited earlier.
PS: Putting fluoride in water is a public health service. Going in schools and teaching kids how to properly bush their teeth or put on a condom. Public Health in this sense I believe is like one would learn about in a Master of Public Heatlh degree program. Not clinical medicine.
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I think you're right.
Where did you read in any of this that a "for profit" entity would qualify under any circumstances what whatsoever? Just curious
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Eh, it's the government. Who knows what they mean by "public health service."
But, the odds are incredibly against the government keeping PSLF. It wasn't too long ago (80's, I believe) we could discharge student debt in bankruptcy. Then the public got wind, through the media, of physicians and lawyers getting their large student debt burdgens being discharged by declaring bankruptcy. So the gov't responded to public outrage and made it almost impossible to discharge student loan debt.
There's a fair chance Congress won't change the terms of PSLF before the first group of eligible residents apply for loan forgiveness, but you can be sure when the public hears about a neurosurgeon who made miminal payments (because of IBR or PAYE) on his/her students loans during 9 years of residnecy & fellowship and then only one year of "real payments" then getting ~$300,000 or so forgiven on the taxpayers dime, tax-free, well, the government is going to change that policy.
Our country is broke, and forgiving all that debt just isn't smart. In fact it makes the student loan crisis worse by encouraging students to borrow more than they should in the hopes that if they just go into IBR and make minimal payments, they can get most of their debt forgiven. So there's now even less incentive to control the cost of tuition and encourage responsible borrowing.
Unfortunately PSLF is not a contract we enter into--weapply after the ten years is over. I will finish residency in 2017, when the first cohort will be elibile for loan forgiveness, but I'm going to bank on the fact I will need to pay off my loans myself. If PSLF is still around that would be wonderful, but I think we should all be planning as if there is no such thing as loan forgiveness. What there is, however, is loan forgiveness through some specific employers, and that's written into your contract. That's promised money, and that's something you can depend on.
Personally, I will be paying off my loans as quick as possible. Our interest rates are ridiculous, and if we count on those forgiveness programs and they dissappear we will be in really bad shape. I'm not willing to take that gamble. just
But, the odds are incredibly against the government keeping PSLF. It wasn't too long ago (80's, I believe) we could discharge student debt in bankruptcy. Then the public got wind, through the media, of physicians and lawyers getting their large student debt burdgens being discharged by declaring bankruptcy. So the gov't responded to public outrage and made it almost impossible to discharge student loan debt.
There's a fair chance Congress won't change the terms of PSLF before the first group of eligible residents apply for loan forgiveness, but you can be sure when the public hears about a neurosurgeon who made miminal payments (because of IBR or PAYE) on his/her students loans during 9 years of residnecy & fellowship and then only one year of "real payments" then getting ~$300,000 or so forgiven on the taxpayers dime, tax-free, well, the government is going to change that policy.
Our country is broke, and forgiving all that debt just isn't smart. In fact it makes the student loan crisis worse by encouraging students to borrow more than they should in the hopes that if they just go into IBR and make minimal payments, they can get most of their debt forgiven. So there's now even less incentive to control the cost of tuition and encourage responsible borrowing.
Unfortunately PSLF is not a contract we enter into--weapply after the ten years is over. I will finish residency in 2017, when the first cohort will be elibile for loan forgiveness, but I'm going to bank on the fact I will need to pay off my loans myself. If PSLF is still around that would be wonderful, but I think we should all be planning as if there is no such thing as loan forgiveness. What there is, however, is loan forgiveness through some specific employers, and that's written into your contract. That's promised money, and that's something you can depend on.
Personally, I will be paying off my loans as quick as possible. Our interest rates are ridiculous, and if we count on those forgiveness programs and they dissappear we will be in really bad shape. I'm not willing to take that gamble. just
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Sorry, I meant non-501c3, not "for profit".
I agree with everything said. It doens't really matter what public service or public health service means or is interpreted to mean. It says that only PRIVATE NOT FOR PROFIT would that criteria be applicable. Hahnemann is FOR PROFIT PRIVATE. So therefore I guess absolutely no one there would be eligible? I don't mind the idea of paying off loans that are owed. I've nearly paid mine off but the idea of my GF matching there and not having hers forgiven while some neurosurgeon's is forgiven and she makes full payments for 6 or 7 years after residency while he only makes payments for 1 year is a little upsetting. I'm sure the first group will slide though but unfortunately, she will be much further behind the 8 ball if her years at drexel don't count and she matches there.
I gotcha
Just seems all residents should be in the same boat since they all make the same salary roughly and salaries are all paid for my the Medicare program. Its not like we're reaping huge rewards from the for profit hospital we work for. If anything, we have to subsidize more of our benefits so they can maintain their profits.
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Well the whole fear of this going away for doctors is because it wasn't intended/designed for doctors. It's clearly a program designed to get people with massive college debt to become high-school teachers, etc.
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I agree. Unfortunately this will cause some residencies to be slighly less favorable among applicants who are counting on PSLF. A non-profit program (keep in mind many non-profit hospitals are not the ones responsible for attending salaries, so an attending at an academic hospital is often paid by a physicians foundation, but the residents usually paid by the academic center, which is usually non-profit) is going to have one more check mark on the "pro" side relative to a for-profit hospital.
However, one thing to consider is if the hospital is associated with a VA, county hospital, etc., some of the resident's salaries are paid by the VA, county hopsital, etc. So I don't know if it's necessailly a deal-killer if your residency is for-profit. It probably is, but there's a chance it's not. I really don't know how that would work.
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On drexels residency website, it clearly states that interns residents and fellows are employed by Hahnemann University Hospital and not Drexel University College of Medicine. DUCH is non profit(which isn't even true but listed as such), while HUH is for profit and owned by investors and quite profitable at that.
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Often... buy not always. We did get to the moon. And rebel against the British. So that's two things they did right! (Ok, only one, since we didn't technically have a government in 1776).
In all honesty I do believe the government can do some things right. A democracy isn't pretty or efficient, but it's the least worst form of government. If we could ensure a beneficent dictatorship that would be wonderful, but we know from history either that ruler gets corrupted, or everything falls to pieces with the transition of power (Case point: Emperor Nero).
But I guess that's getting off the topic of IBR/PSLF, lol...
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All that part is easy to figure out. The crappy part is that a resident at drexel doing the same job as a resident at Temple will not be 4 years advanced towards having their loans forgiven after making the same payment for 4 years. They run more risk of having the PSLF being closed by the time they would get ready to use it. Some people make career choices based on its availability. If I knew I could have it forgiven, I for one would be much more likely to go to a high needs area even if they pay was half as good. I wouldn't be able to take that gamble if I did my residency there though. Kicks the forgiveness possibility too many years down the road. Congress didn't intend for it to apply to residents but if it does then it should apply for all. Either all or none.
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Then don't go to Drexel if it's that big of an issue. Problem solved.
And if it makes you feel better, the odds of this still being an option 10y down the road are pretty low.
And you're basing your information on what with it not being around in ten years? The first people don't go through it until 2017. The forms have already been released for Certification of Employer Status so you can lock in the time that you worked where. My guess is as fiscally irresponsible as congress is, they'd have know problem grandfathering in the people that filled out one of these forms. As for not going there and it being that simple. Its not for me, its for my GF and she already sumbitted the match list. Had I been paying enough attention to all of this I'd have encourged her not to. Alas, we shall see what happens.
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Mostly just the massive clusterf**k that the federal government - on all levels - has become. It's just a Congressional Act and can be very easily amended or just overturned (like the ability to defer loans in residency...which doesn't cost the gummint nearly as much as this will). In fact, I'd put money on physicians/dentists being removed from the program after the first year of payback when they realize how many $250K+ student loan bills they're having to pay.
I'm certainly pursuing it, but I'm not counting on it and I sure as hell wouldn't base my training/practice location solely on the possibility of getting PSLF. Given two otherwise equal positions it's an obvious choice, but that's almost never the case. Again, I think you're getting way too worked up about this unless your GF has more than half a mill in student loans.
But Touche. I take your points on the Clusterboink our Govt has become.But just an FYI, coming out of residency with a half a mill on a 250K salary if you paid the minimum under IBR and then discharge the balance at 16 years then you'll get about a 4-500K tax bill because the Govt would consider that million bucks they just forgave as income. That would be a bitter pill to swallow knowing someone who went to residency 5 miles away didn't have to pay it.
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The more I think about it, the less I fear amendment of this program. It would make for terrible PR, especially in light of the ever-expanding and problematic doctor shortage.
Student loans are at a comical high and doctors incomes are dramatically decreasing. Pulling the rug in that manner - basically destroying the last bastion for evasion of indentured servitude - would not play very well. Even though the public talks about rich doctors, the educated ones know that doctors aren't making it rain like they used to. They also know (from their own educational blunders) how exorbitant loans have gotten across the board. The common cry of the people will not be "**** the doctors", it'll be "**** the government". And even if they did exclude us by modifying terms, to not grandfather in the existing people making life decisions that rely on that promise, would be such a cherry red kick to the groin that I think they just couldn't pull it off.
I don't know the specific dollar amounts, but perhaps it's even true that those weird careers that this wasn't intended for (like doctors) aren't even a blip on the financial radar of the program. Most people aren't doctors or lawyers, even less, much less, are doctors or lawyers working for non-profits.
Student loans are at a comical high and doctors incomes are dramatically decreasing. Pulling the rug in that manner - basically destroying the last bastion for evasion of indentured servitude - would not play very well. Even though the public talks about rich doctors, the educated ones know that doctors aren't making it rain like they used to. They also know (from their own educational blunders) how exorbitant loans have gotten across the board. The common cry of the people will not be "**** the doctors", it'll be "**** the government". And even if they did exclude us by modifying terms, to not grandfather in the existing people making life decisions that rely on that promise, would be such a cherry red kick to the groin that I think they just couldn't pull it off.
I don't know the specific dollar amounts, but perhaps it's even true that those weird careers that this wasn't intended for (like doctors) aren't even a blip on the financial radar of the program. Most people aren't doctors or lawyers, even less, much less, are doctors or lawyers working for non-profits.
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This. The government will catch on to this quickly, I'm sure they probably have already.My strategy has been to play the PSLF game like it will happen but I have been investing any extra money I would have been putting toward loans into vangaurd total stock index. That way I am at least negating some of the interest (baring any dramatic drops in the market). When the time comes hopefully my loans are forgiven, if not I at least have a little nest egg to start paying them down.
Survivor DO
Once you get one of those forms certifying your employer then you are Golden. They know people out there are paying less than they could afford in residency just waiting on this thing letting all that interest compound. If they announced it was a sure deal then folks would do it even more. Same reason why on the standard PAYE or IBR they haven't said....hey we'll forgive the taxes. They want people to fear the possibility of the taxes now so they'll pay what they can. When it comes time for IBR to drop the hammer on some folks in 2019 you better believe some politicians will be clammering to forgive those taxes. If the Dems get their way with Imigration reform, we won't have the distinct pleasure of having anymore fiscal accountability to anything so its probably all roses as far as student loans go but they'll get it back in income taxes. Don't you worry. Republicans would only be slightly better mind you.
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I don't know if my thinking is right on this, but when you start your attending pay you wont be eligible for IBR anymore and would have to switch to the 10-year payment plan. For those of you in a 3 year residency this would mean having 7 years to make payments at the 10-year rate. Or something like that.
And before anyone disagrees and throws up Bush Tax cuts as causing the budget shortfalls...please look up the actual data. Federal Revenues went up afterwards. The problem is spending has increaseed 90 percent since 2001 and that 7 out of 17 trillion dollars in debt was amassed in the last 4 years. Bush wasn't so hot himself amassing 5 trillion but it was in 8 years at least. And yes what you really have to look at is Congress. Since 1980, a Dem controlled congress has Averaged 650 billion in deficits while Republicans a mere 450 billion. Slick Willy fought hard not to sign balanced budgets at all but after his party got whipped in Congress in 94 and lost power he was forced. He was then smart enough to get out in front of it and take credit for it. No one remembers the first two years now.
It's that you'd be capped at the ten year rate if you made enough money. If you some how make a billion bucks a year then you're still capped at the ten year rate. The interest doesn't compound the first 3 years though plus Uncle Sam pays the interest on subsidized portion for 3 years and you get by only paying a couple hundred a month at most with PAYE. Still comes out a pretty sweet deal if anyone has any sizable debt to discharge at the end and it will be tax free in this case.
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Many doctors will still be eligible for IBR. For those that aren't, just pay off your loans. You're probably making enough money to do it.
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IBR at that point will be equal to 10 year payment rates.
http://www.projectonstudentdebt.org/files/pub/IBR_forgiveness_ex.pdf
See example #6. In that example, the doc is in private practice.
http://www.projectonstudentdebt.org/files/pub/IBR_forgiveness_ex.pdf
See example #6. In that example, the doc is in private practice.
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Where's the dude with the 350k anchor and a 220k income.
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Only if that fellowship adds something substantial to your income. A lot of fellowships don't really raise income. Some reduce it.
If you're the guy w/ 220K in income and 320K in debts then it pays to do a fellowship because the fellowship along would save you from 220+K in principal and interest plus a bill on 4-500K dollar in phantom income in year 20 that is going to be taxed and leave you with a 200+K tax bill. PSLF is TAX FREE in year TEN. Thus you save TEN YEARS OF PAYMENTS + the TAX BILL.
For those who are math inclined, it saves you about 5 thousand dollars a month over the bulk of your working career plus any interest it could earn. I'd call that reason for a fellowship.
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I get the quasar-sized advantages of PSLF, but you'd be losing a year of 220k income for the benefit of 60k plus a smaller loan payment. The 220k would still be ahead (plus, since you've payed more to IBR, you'd have a smaller principle being taxed at the end of the XX years you're on the program - although this isn't a big deal). Plus the benefits an additional year of real life work experience under your belt. And this is only referring to year-long fellowships.
PSLF is good enough as it is without having to carve your specialty of medicine around it.
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Sure, you don't have to carve your residency around it, but it definitely provides an incentive to train longer, to the tune of about 25k/year in loan repayments that would have to start paying once you get that attending salary. That could prove to be all the difference to people on the borderline on whether or not to apply for a fellowship.
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My point is it's not financially prudent. The increase in loan payment in overshadowed by the increase in income.
No fellow is going to make as little as 220K a year. If you pay the minimum IBRor PAYE payment you won't pay down your principal one iota in 20 years or even cover the accrued interest for the guy graduating with 340K in student loans. Rather they'll balloon to about 800+K over the 20 years and then you'll get stuck paying 40 percent(maybe more-who knows what the top tax rate will be in 20 years) in income taxes all in one year. Plus you would be paying a minimum of 20K dollars a year in payments for years 10-20. I can assure you the math is NOT in your favor to earn an attending salary of 220K minus many taxes for one year versus a fellows salary of 60k for one year minus a lower rate of taxes. Warren Buffet couldn't get you those kinds of returns in 20 years. Not to mention, some fellows make double(hopefully me included very shortly).
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