- Joined
- May 26, 2007
- Messages
- 7,527
- Reaction score
- 4,515
Anyone else want to join me in filling out an applicatoin to the Navy?
The income-sensitive repayment plan will be a good, good thing for veterinary students, and for the country -- we need meat inspectors and food animal vets, and anyone coming out of school with $150-250K in debt cannot currently afford to do these jobs. The one thing I'm unclear on is that the forgiven debt is taxed as income in the 25th year. My predicted amount forgiven is over $200K (ah, interest), so I'm going to be expected to pay 30-ish% of that to the government, in one go? I must be interpreting this wrong... Anyway, I'm sorry about the residency deferment option being effectively eliminated. That really sucks.
The income-sensitive repayment plan will be a good, good thing for veterinary students, and for the country -- we need meat inspectors and food animal vets, and anyone coming out of school with $150-250K in debt cannot currently afford to do these jobs. The one thing I'm unclear on is that the forgiven debt is taxed as income in the 25th year. My predicted amount forgiven is over $200K (ah, interest), so I'm going to be expected to pay 30-ish% of that to the government, in one go? I must be interpreting this wrong... Anyway, I'm sorry about the residency deferment option being effectively eliminated. That really sucks.
Working with your lender, I know some of them offer it. Our lender offered it if we didn't get deferment and didn't want to do the forebearance. I'd suggest you ask your lender b/c I know 3 lenders that do offer this (non-direct lenders - direct offers you that option right off the bat).Do you know if the income-sensitive repayment plan is retroactive for those that have already graduated and consolidated their loans? Just curious, thanks.
They also said we could do the deferment for 3 years then forebearance for 3 years during fellowship but all the literature I'm seeing about fellowship makes its sound that its only residency that's eligible.
You're right, the debt forgiveness is a net good for lots of people. One situation I know about personally is law school debt. Lots of students borrow $100+K, which forces them to do the big law firm thing. If the loans were made a little less burdensome, it might encourage more lawyers to do public interest work, something that lots of them really want to do.
The deferment that is "no longer available". This was the process when I was putting my husbands loans in deferment.What deferment are you referring to?
Again, though, if you make any kind of professional salary (even as a farm animal vet or public interest lawyer), it doesn't seem as if your monthly payments would be low enough to even get to the 25 years. If you're in a two income-earner household, which most people will be for the majority of the 25 years, the ICR formula would have your loans paid off in ten years or less (assuming you could handle the ridiculous monthly payments that the formula spits out in that circumstance). IMO the income-contingent repayment plan SOUNDS good, but will be useless for most people in reality.
Maybe, but I see lots of circumstances when income-sensitive repayment would be of significant benefit for people. For instance, those first years out of school, when a lot of people are still single. Also, if God forbid, you get divorced or widowed. And for gays and lesbians. Or for people who just don't want to get married. If the calculator is right, my monthly payments under the program start at $800, which is significantly less than the amount I was planning on.
Although, I am concerned about my loans that are in grace till Dec.
No, this went into effect Oct 2007. You can no longer get deferment under the 20/220 rule.I think those should still qualify for deferment for one year beginning Dec 2007, since this legislation does not go into effect until July 2008. Is that correct?
So I have been doing a little calculating and it seems there is maybe a better option than this new repayment program. So the mandatory medical residency forbearance and the economic hardship forbearance are still in play. (You make no payments, but interest continues to accrue on all your loans including your subsidized staffords, however with the repayment program no interest would build up on your subsidized staffords) Anyway with approximately 32,000 in subsidized loans at an interest rate of anywhere from 4-6.8% depending on when you took them out, you could enter forbearance and just pay the interest on the subsidized loans and it would be less per year than this 350 per month payment plan.
Worst case scenario: 32,000 at 6.8% = 2,176 in interest per year.
Payment plan 350 x 12 months - 4,200 per year.
So at the end of the year you paid $2,000 less and still don't have any interes capitalizing on your subsidized. I didn't factor in the unsubsidized since the juice is running on those even under the old economic hardship deferrment.
Am I totally off on this one?
So I have been doing a little calculating and it seems there is maybe a better option than this new repayment program. So the mandatory medical residency forbearance and the economic hardship forbearance are still in play. (You make no payments, but interest continues to accrue on all your loans including your subsidized staffords, however with the repayment program no interest would build up on your subsidized staffords) Anyway with approximately 32,000 in subsidized loans at an interest rate of anywhere from 4-6.8% depending on when you took them out, you could enter forbearance and just pay the interest on the subsidized loans and it would be less per year than this 350 per month payment plan.
Worst case scenario: 32,000 at 6.8% = 2,176 in interest per year.
Payment plan 350 x 12 months - 4,200 per year.
So at the end of the year you paid $2,000 less and still don't have any interes capitalizing on your subsidized. I didn't factor in the unsubsidized since the juice is running on those even under the old economic hardship deferrment.
Am I totally off on this one?
So I have been doing a little calculating and it seems there is maybe a better option than this new repayment program. So the mandatory medical residency forbearance and the economic hardship forbearance are still in play. (You make no payments, but interest continues to accrue on all your loans including your subsidized staffords, however with the repayment program no interest would build up on your subsidized staffords) Anyway with approximately 32,000 in subsidized loans at an interest rate of anywhere from 4-6.8% depending on when you took them out, you could enter forbearance and just pay the interest on the subsidized loans and it would be less per year than this 350 per month payment plan.
Worst case scenario: 32,000 at 6.8% = 2,176 in interest per year.
Payment plan 350 x 12 months - 4,200 per year.
So at the end of the year you paid $2,000 less and still don't have any interes capitalizing on your subsidized. I didn't factor in the unsubsidized since the juice is running on those even under the old economic hardship deferrment.
Am I totally off on this one?
But the problem is that most of us have a lot more than 32,000 when the unsubs are considered. Thus, paying the interest will become a higher dollar figure then the 350/month income sensitive plan when you add in all of the loans, right?
But the problem is that most of us have a lot more than 32,000 when the unsubs are considered. Thus, paying the interest will become a higher dollar figure then the 350/month income sensitive plan when you add in all of the loans, right?
Hello everyone,
I wanted to be in touch with you to provide an update from the Washington Advocacy Staff on the issue of the 20/220 hardship eligibility criterion changes.
Our AMA issued a letter yesterday regarding this issue to Secretary of Education Margaret Spellings, asking for consideration on the issue of the 20/220 eligibility criterion. Our AMA provided two recommendations in that letter: (1) extending of the "20/220 pathway" of the economic hardship deferment until the new income-based loan repayment program takes effect in July 2009; and (2) allowing current participants in the economic hardship deferment to finish out their remaining years of eligibility.
After our AMA advocacy efforts by staff and our resident/fellow and student sections, our Advocacy Staff has now received verbal assurance from the Department of Education that the 20/220 rule will be maintained until a negotiated rulemaking process, which involves a series of meetings with stakeholders, occurs next year. The earliest that such a rulemaking process is scheduled to finish would be November 1, 2008. This means that for fourth-year medical students and current residents, the 20/220 hardship deferment eligibility rule would be in place when they typically apply for deferment next year. The Department of Education is supposed to make an official statement on this in the coming week.
This week's issue of eVoice, when released, will provide an update on the economic hardship deferment issue and will continue to urge AMA members to contact their legislators.
Our AMA is continuing to advocate for students and residents on this issue, pursuing further communication with the Department of Education as well as legislative advocacy through such means as the Higher Education Act (HEA) reauthorization process. We will continue to update the sections regarding this issue as it progresses. Please feel free to contact me with any questions or concerns you may have, and thank you for all of your efforts on this issue!
Contact your reps!!!
Here's a sample letter
Here's a sample calling script (good luck with that, we just got answering machines).
Use this page on the AMA site to find your representatives.
More info on Info on Student Debt and How this affects you?
Is that link in the post there? If not can you post that link? I've been looking for that.thanks for posting this, the AMA site now includes an easy form letter as I was asking about previously to contact our representatives.
don't forget to send the link out to your classmates!
I received this email from my current lender;
I spoke with a friend at DOE yesterday and today this was released;
This change is effective immediately.
Economic Hardship Deferment Qualification #6 20/220 Debt-to-income Ratio Calculation
ED says in the communication that qualification #6 on the deferment form (the 20/220 debt-to-income ratio calculation) is still a valid option indefinitely; even though that specific calculation was eliminated from the Higher Education Act in the text of the CCRAA bill. ED is going to hold a series of meetings with industry participants in the forthcoming year (called Negotiated Rulemaking) to discuss possible changes to the debt-to-income ratio calculation.
According to the communication, the earliest we will see new language on this topic is November 1, 2008, with an effective date of July 1, 2009.
The Loanster financial Group, LLC.
See my post above:I spoke with my lender (AES) today because I hadn't heard anything about my deferrment application and was told it was "on hold". Why on hold? Because the DOE has not released the new formula for calculating the debt/income ratio to qualify under #6. So lenders can't calculate if we qualifiy or not because there's no formula. Until that formula becomes available all accounts are in some sort of limbo-land. I was told I have 2 options once my loans go into repayment on November 15 (and I'm not hopeful they'll have it figured out by then):
1) Temporary forebearance. If my deferrment is approved, the government will backpay all accrued interest. If not, then it's just forebearance.
2) Go into repayment. If my deferrment gets approved, then the payments I've made will not count towards my bonus of 18 payments in-a-row leading to lower interest rates, because I will not have technically been in repayment since my deferment will be backdated. If not, then well, now I'm in repayment.
If nothing else will be released until November 2008, that seems like a long time to be uncertain about how this will all turn out.
After our AMA advocacy efforts by staff and our resident/fellow and student sections, our Advocacy Staff has now received verbal assurance from the Department of Education that the 20/220 rule will be maintained until a negotiated rulemaking process, which involves a series of meetings with stakeholders, occurs next year. The earliest that such a rulemaking process is scheduled to finish would be November 1, 2008. This means that for fourth-year medical students and current residents, the 20/220 hardship deferment eligibility rule would be in place when they typically apply for deferment next year. The Department of Education is supposed to make an official statement on this in the coming week.
Anyway with approximately 32,000 in subsidized loans at an interest rate of anywhere from 4-6.8% depending on when you took them out, you could enter forbearance and just pay the interest on the subsidized loans and it would be less per year than this 350 per month payment plan.
ama mss email received 11/1/07 at 12pm said:As this issue progresses in DC, I wanted to take a moment to give you another important update with some positive news regarding the 20/220 hardship eligibility criterion changes from the Washington Advocacy Staff.
Following our AMAs advocacy efforts by staff and the tremendous efforts by our medical student and resident/fellow sections, the 20/220 pathway will continue through at least fall 2008.
The final rule, published today by the Department of Education, keeps the 20/220 pathway intact. Through this rule, the Department of Education specifically revised sections of Title 34 of the Code of Federal Regulations in a manner which does not alter the language regarding the 20/220 pathway, but incorporates some of the other changes issued in the College Cost Reduction and Access Act. Thus, the current 20/220 pathway to economic hardship deferment remains in place, until a negotiated rule-making process can occur which will not be completed until fall of 2008.
This development means that fourth year medical students and current residents will continue to be eligible for hardship deferment under the 20/220 pathway over the next year, and it also allows time over the coming year to pursue long-term legislative solutions to this problem.
This issue will be highlighted again in eVoice this week, when our AMA President Ron M. Davis, MD, will be discussing the economic hardship deferment in his weekly column.
Throughout this process, our AMA has and will continue to advocate for students and residents on this issue and we will continue to update the MSS as the issue moves forward. Please keep in mind that this is a temporary fix, and that you can make your voice heard by working with your MSS Governing Council and by contacting your legislators through our capwiz websites action alert. Thank you again for all of your hard work on the issue of hardship deferment! Please contact me with any questions you may have.
I don't stand why this thread isn't more popular.
Is it me, or is this not a HUGE deal when it comes to finance?
Me neither. Its not just here, its med students in general. When I bring this up with my classmates, most just shrug it off and don't really care, and I'm not sure why. I don't want to have 15% of my salary confiscated in residency, period. I think med students live in their own financial bubble of security when it comes to talking about money. It's annoying and it's going to hurt us in the end with other issues as well.
I've posted in every med school forum, if people would start discussion and keep it up in their respective forums that would help.Can't we at least get this issue or thread stickied in one of the forums? I don't know why it already isn't. It would at least raise some awareness, and it shouldn't hurt anyone's political interests.
I just wanted to throw in my 2 cents. first, I just want to underline that it isn;t a straight 15% of residency income. It's %15 above the %150 poverty level. Now, taking an average resident salary, it caps out to about $350 a month. NOw, that isn't small, but it's not the end of the world. I'm more offended by the concept. I feel like so much money is spent on a myriad o f other crap by our government, and then they come after their country's medical community b/c they can't manage their money? That makes my blood boil.
Dear MSS,
You've read the latest updates on 20/220, and we want to remind you that your voice IS making a difference.
YOUR Voice is Being Heard on Capitol Hill!
Over the past few weeks we've seen several legislators in the House and Senate propose bills to permanently reinstate the 20/220 rule. Why the rush to reinstate? Medical students and residents in the AMA have been emailing, writing, and calling Congress, making this issue a legislative priority. In October 2007, we generated a total of 2041 messages (Email: 1885 and Printed: 156) and in November 2007, a total of 873 messages (Email: 795 and Printed: 78)---that's almost 3000 communications to our elected officials in TWO months!!!! Congress has also received hundreds of phone calls on 20/220 which are not reflected in these figures.
So, what can we do next?
(1) Visit the COLA website which features *NEW* educational resources on 20/220 (www.ama-assn.org/go/cola)
(2) Host a teach-in on 20/220 at your chapter (using COLA powerpoints and issue briefs: www.ama-assn.org/go/cola)
(3) Be clear about your "ask:"
Ask for the reinstatement of the 20/220 pathway to economic hardship deferment, which allows 67% of entering residents to defer huge student loan debts for 3 years while completing residency training. Ask your elected leaders to support Senate bill S.2303 (introduced by Senators Burr and Isakson) and House bill H.R. 4344 (introduced by Reps. Walberg, Boustany, McKeon, Ehlers, Price, Kline and Lucas).
(4) Keep calling and emailing your Congressional leaders (remember, we are making an impact!):
CAPWIZ (it takes less than 2 minutes!)!
http://capwiz.com/ama/issues/alert/?alertid=10524271&type=co
CALL!
1-800-833-6354
We are already making a huge difference.....we can't afford to be silent now.....so please keep those emails and phone calls coming!
As always, please don't hesitate to contact your COLA (Committee on Legislation and Advocacy) if we can be of help to you in any way.
Thanks again for all your efforts......and Happy Holidays!!
With warm wishes,
Maya (on behalf of COLA)