Student Loan Repayment Option for Academic Rad/Oncs

[AlphaBetaRatio]

Hey everyone,

A little while back someone on this forum posted that there's an option where if you are employed by an academic center then you can have the rest of your loans paid off after making payments for a certain number of years under a specified repayment plan.

I haven't crunched the numbers myself, but if you're making a normal academic salary, will this repayment options end up saving you a significant amount of cash?

Thanks!

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[rad0nc]

Hey everyone,

A little while back someone on this forum posted that there's an option where if you are employed by an academic center then you can have the rest of your loans paid off after making payments for a certain number of years under a specified repayment plan.

I haven't crunched the numbers myself, but if you're making a normal academic salary, will this repayment options end up saving you a significant amount of cash?

Thanks!

You have to work for 10 years in a sytem that satisfies the loan repayment requirements. I believe that residency will count for part of that time. I don't know a lot about academic salaries, but I think that it would be unlikely that your income based repayments would leave you with much to pay off after the 10 year mark unless you went to a private medical school and also had some undergrad/grad debt.

The scariest part of the whole deal is that it is not something you sign up for now and then get paid off when you finish. You apply for it after your 10 years are up. Given the way that our government will inevitably need to cut back, I find it highly unlikely that they will be paying off the debt of a bunch of physicians 10 years from now. Furthermore, I can just imagine the headlines in the paper if the media did a story on how the rich doctor got all of his loans forgiven. I would guess that this system will be gone by the time they have to pay anything, or at the very least there will be an income cap.

 

[deleted4401]

The 10 year repayment thing might not work for most radoncs. If you look up the government program, it allows for it if your income to debt ratio is a certain amount. At 200k a year (about the low end of most academic jobs), you wouldn't meet the requirements. But, it may be offered in some private or academic centers as a perk, though not as common in our field.

Oops. Looked it up. I guess there is not an income requirement as long as you work for the right type of organization. I must have misread it.

The only way to know if it adds up is to compare your interest rate with the expected growth in the market over the course of your repayment. If you know the second number, please PM me.

Simul

 

[AlphaBetaRatio]

Hey Simul,

My loans are all consolidated at 3.25%. My gut feeling tells me that after 10 years my loans will be completely paid off and the government would be paying about 10 cents.

 

[thesauce]

Here is my understanding:

Income based repayment (IBR): A plan that caps your payments at 15% (or 10%, depending on when your loan originated) of your income that is above 150% of the poverty line. If your IBR payments are more than your 10 year payoff payments, they default to the amount of your 10 year payoff plan.

Public service loan forgiveness (PSLF): Government forgives the remainder of the balance of your direct loans after 120 payments are made on time while working for a non-profit.

Direct loans: Loans directly through the department of education. This does not include any FFELP loans.

As a resident, your payments will generally be quite low under an IBR plan. During this time, you should make 60 payments. In most cases, you'll lose ground on your balance over that time.

At that point, you become an attending and your IBR plan will most likely default to the 10 year repayment plan. Continue to make the next 60 payments on time, during which time you'll pay off approximately half your loans and the rest will be forgiven...in theory.

 

[Aphtalyfe]

Here is my understanding:

Income based repayment (IBR): A plan that caps your payments at 15% (or 10%, depending on when your loan originated) of your income that is above 150% of the poverty line. If your IBR payments are more than your 10 year payoff payments, they default to the amount of your 10 year payoff plan.

Public service loan forgiveness (PSLF): Government forgives the remainder of the balance of your direct loans after 120 payments are made on time while working for a non-profit.

Direct loans: Loans directly through the department of education. This does not include any FFELP loans.

As a resident, your payments will generally be quite low under an IBR plan. During this time, you should make 60 payments. In most cases, you'll lose ground on your balance over that time.

At that point, you become an attending and your IBR plan will most likely default to the 10 year repayment plan. Continue to make the next 60 payments on time, during which time you'll pay off approximately half your loans and the rest will be forgiven...in theory.

This is my understanding as well.

Even if the "loophole" gets shored up within the next few years... IBR is still the best option for residents. Unless you have tons of extra cash during residency (what?) and can afford to be on a different payment plan.

 

[temujim]

ASCO supports a loan repayments program for oncologists practicing in underserved areas (defined by the govt). Up to $70K over 2 years:

http://www.conquercancerfoundation..../funding-opportunities/loan-repayment-program

 

[AlphaBetaRatio]

Awesome, thanks everyone! Honestly I think I'm just going to have to mail in nice big checks to our friends at Sallie Mae and I should have it paid off within 10 years hopefully!