Approach for those weary of PSLF survival

[Igor4sugry]

PSLF is awsome, especially for those with tons of loans. There are many on this forum who are concerned of survival of PSLF program. That is a valid concern; although the government already spends millions:

http://www.usatoday.com/story/news/...gress-federal-employee-student-loans/2434323/
"By 2010, more than 11,000 workers in 36 federal agencies had received loan payments totaling $85.7 million. That number dropped to $71.8 million in 2011."

So you see how much money federal government is already paying for this.
By the time docs start taking advantage of PSLF it may add 5-7million to that cost (I'm purely guessing), and who do you think will notice the difference between 71million and 77million (government spends millions on many types of programs)? I think it will stay.

The plan to stay in PSLF is to:
[1] Get a job that qualifies for PSLF.
[2] Stay in IBR and make extra payments such that you are at least in 10yr repayment plan.
[3] Once you are close to your PSLF forgiveness period (say within 1 year); just stop paying extra until you hit PSLF date.
[4] This will still allow you to save a substantial amount and repay loans before 10yrs.

*Some will say its a hassle to make extra payments on top of IBR; well I think it is worth it if you can save at least 80k just by doing some careful accounting.

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[freaker]

.

The plan to stay in PSLF is to:
[1] Get a job that qualifies for PSLF.
[2] Stay in IBR and make extra payments such that you are at least in 10yr repayment plan.
[3] Once you are close to your PSLF forgiveness period (say within 1 year); just stop paying extra until you hit PSLF date.
[4] This will still allow you to save a substantial amount and repay loans before 10yrs.

*Some will say its a hassle to make extra payments on top of IBR; well I think it is worth it if you can save at least 80k just by doing some careful accounting.

I think an even better strategy would be to pay the minimum payments and invest the other payments you would make in a CD, municipal bond fund, or I-bonds, particularly if you're in a program with a 5+ year residency/fellowship program. If PSLF is around for you and vaporizes your loans, you've just built a nice nest egg of savings and had your loans paid off as was initially promised.

If it's a bait and switch and there is no PSLF, you just dump your savings against your loans. Granted, with this method you stand to lose a few percentage points (e.g. CDs and I-bonds are paying just under 2% v. 5-6.8% student loans), but in my estimation, it beats the 100% loss you'd take by paying anymore into your student loans than you are required to while you're waiting for PSLF.

 

[jakeislove]

May be there in 10 years but it still looks like indentured servitude.

The 7 year payoff in underserved areas was/is still a better deal and patients are more likely to end up with doctors who want to be in their community.