doing PSLF is not always the way to go.

[Igor4sugry]

I have been crunching some numbers once I finish residency to see what type of repayment strategy will work. It seems PSLF doesn't make sense when you have employer offered loan repayment.
I plan to graduate with 230k in student loans. I have to work for about 6.5 years to be eligible for PSLF.
There are jobs out there that give $20k/yr in repayment (x5yrs) and also $30k/yr in repayment (x5yrs).
I figure that with attending salary (~$200k) the IBR payment will be that of 10yr repayment term. If you then use the loan repayment money you will pay off loans quicker (in my case in about 5.5years), and end up paying less than if you did PSLF.
Any thoughts on this?

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[ph201516]

Hi, why do you have to work 6.5 years to be eligible for pslf?
Have you worked already for a tax exempt organization for 3.5 years?

 

[Information Underload]

I'm not sure how you figure that you'll have your loans paid off after 5.5 years. Even at 30k per year loan repayment ($2500 per month), that's not even covering the minimum payment on a 10-year loan repayment rate for 230k if your loans are at 6.8% interest ($2646 per month). Moreover, that's "just" 150k over 5-years--nowhere near 230K + interest. By my calculations, you've still got $122k left in principal on a 10-year repayment plan 5.5 years into repayment if your loans are at 6.8% interest.

Are you talking about making the $2646 per month payment on your own in addition to the $2500 per month paid by your employer? It's not necessary to do that to qualify for PSLF. You can simply have your employer pay you $2500 per month that you pay into your student loans and then you pay the difference to make your grand total of $2646 in total loan payment per month. You don't need to make $5146 ($2500 + 2646) in payments per month.

Keep in mind that the $2500 paid by your employer per month isn't $2500--it's that minus federal and state income tax, minus medicare tax, minus social security tax and minus other relevant taxes (e.g., city income taxes).

Also keep in mind that you technically aren't in the 10-year repayment plan until you are required to update your income. My current student loan payments are $458 per month as an attending until July, though I'm paying the $1k per month "given" to me by my employer (let's be real; this is part of your salary).

By my amortization calculator, you're set to have 95k in loans forgiven via PSLF 6.5 years into repayment if you're paying $2646 per month for the entire 6.5 year repayment period.

 

[Igor4sugry]

Hi, why do you have to work 6.5 years to be eligible for pslf?
Have you worked already for a tax exempt organization for 3.5 years?

4-year residency. But I don't get entire 4yrs counted towards PSLF because I did my direct loan consolidation after starting residency. I found this out when I sent paperwork to PSLF to verify how many months I had eligible. I highly recommend this for everyone. Actually about 1/3 of loans require for me to be 7yrs in a PSLF job post graduation.

 

[Igor4sugry]

Are you talking about making the $2646 per month payment on your own in addition to the $2500 per month paid by your employer? It's not necessary to do that to qualify for PSLF. You can simply have your employer pay you $2500 per month that you pay into your student loans and then you pay the difference to make your grand total of $2646 in total loan payment per month. You don't need to make $5146 ($2500 + 2646) in payments per month.

I see your point, that actually will allow to lower amount paid using own money even more.