Percentage of job offers you'd take that are pslf eligible?

[fasadon]

Starting residency and considering immediate direct consolidation loan to get in extra $0 pslf payments. Will lose my grace on Perkins and subsidized loans if so which will cost me $500 in interest if I choose to exit pslf after residency. Sure it's chump change, but that makes this question worth $500.

I'm $190k in debt and $112k in pslf eligible. Pslf will save me ~$50k in 2027 USD, which comes out to <$10k/yr. Considering this, I probably will be quick to jump ship for a higher pay more enjoyable position that's not 501c3 if that's what is available. Biden's "new repaye" plan will rid me of interest accruing likely from July 2024 - July 2028 considering it doesn't vastly change before implementation.

Only issue is, I am clueless on what % of jobs offers are pslf eligible. I think I like OP/consult mix with a later career return to academia and will pursue FI but not fully retire, but interest will probably change through residency and beyond.

Therefore, I'm curious of the odds I stick to a 30+ hr job(s) that is pslf eligible in 4-5 yrs across the spectrum in psychiatry when considering the Midwest, West Coast, or Carolinas. Thoughts from early career psychiatrists?

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[Mad Jack]

Starting residency and considering immediate direct consolidation loan to get in extra $0 pslf payments. Will lose my grace on Perkins and subsidized loans if so which will cost me $500 in interest if I choose to exit pslf after residency. Sure it's chump change, but that makes this question worth $500.

I'm $190k in debt and $112k in pslf eligible. Pslf will save me ~$50k in 2027 USD, which comes out to <$10k/yr. Considering this, I probably will be quick to jump ship for a higher pay more enjoyable position that's not 501c3 if that's what is available. Biden's "new repaye" plan will rid me of interest accruing likely from July 2024 - July 2028 considering it doesn't vastly change before implementation.

Only issue is, I am clueless on what % of jobs offers are pslf eligible. I think I like OP/consult mix with a later career return to academia and will pursue FI but not fully retire, but interest will probably change through residency and beyond.

Therefore, I'm curious of the odds I stick to a 30+ hr job(s) that is pslf eligible in 4-5 yrs across the spectrum in psychiatry when considering the Midwest, West Coast, or Carolinas. Thoughts from early career psychiatrists?

I can only tell you how I approached this, however I have far more debt (over 400k, all of which is PSLF eligible). I did a fellowship, and made payments under REPAYE while in residency and fellowship. New REPAYE under Biden will likely be scrapped, so I wouldn't count on that, but even with the current REPAYE plan interest growth is halved if your payments do not cover your interest. Furthermore, so long as you're in REPAYE and do not change to another payment plan, your interest does not compound. Ultimately, the interest won't matter one way or another if you pursue PSLF, as the forgiveness is untaxed, so you just end up paying 10% of your income annually for 10 total years of payments (5 of which are post residency) and then all of your debt disappears. Compared with paying the debt off in after-tax money, this adds up to approximately a 120k benefit on a pretax basis per year, on top of my salary, which will be around 300k. When factoring in the remainder of my compensation package, so long as I stick with PSLF at the same institution I'll have a total compensation equivalent of around 480k with retirement contributions, disability insurance, etc. You need to calculate the pretax value of forgiveness (as you would pay tax on the total amount of your loans otherwise), subtract interim estimated payments from this pretax value, and then divide this amount by the number of remaining years needed for PSLF to determine the financial benefit it provides to any potential nonprofit pay package. You then can compare this with the private options out there and determine whether it is worth it to you, in particular. As you're just starting residency, much can change between now and graduation, so your calculus may change as time goes on. This isn't financial advice or anything, just how I looked at things to determine how they would work best for me.

 

[comp1]

I don't think you'll find a concrete answer to this, but it's a lot. 25% of all jobs in the US are public service, but I expect it's a lot higher for jobs specific to medicine. Long term, just make sure you lack interest in specific types of jobs that wouldn't be eligible. This is most notably private practice, but also including for profit group practices and anything involving contract work/1099's (as a full time job). The contract work thing is rough as I definitely see a lot of psychiatrists doing that as essentially their full time job. However, given its rocky road, the PSLF is not the be all end all of loan forgiveness. Many for profit companies offer similar options. The VA and other federal agencies offer both PSLF and the less restrictive EDRP together at the same time.

 

[fasadon]

New REPAYE under Biden will likely be scrapped, so I wouldn't count on that

I think it'll be modified, but other executive orders for IDR have been under the radar unlike the loan forgiveness that has escalated all the way to the Supreme Court. Not counting on it, but betting it's a ~75% chance.

but even with the current REPAYE plan interest growth is halved if your payments do not cover your interest. Furthermore, so long as you're in REPAYE and do not change to another payment plan, your interest does not compound.

Wasn't aware of these current benefits of repaye, awesome! The half interest means my question is only worth $250. So I'll just consolidate immediately because of what comp1 said of probability likely >25%.

When factoring in the remainder of my compensation package, so long as I stick with PSLF at the same institution I'll have a total compensation equivalent of around 480k with retirement contributions, disability insurance, etc. You need to calculate the pretax value of forgiveness (as you would pay tax on the total amount of your loans otherwise)

Forgot to calculate it as a pretax value, good catch! Under new repaye I'd pay ~70k of my exiting residency loans of ~113k through pslf assuming a salary of 300k (I have calculated using AGI given my estimated top line deductions). Assuming a 31% avg. tax on that salary, the 43k saved is 43/(1-0.31)= 62k. If new repaye is scrapped I'd probably save less than half that.

I don't think you'll find a concrete answer to this, but it's a lot. 25% of all jobs in the US are public service, but I expect it's a lot higher for jobs specific to medicine

You think higher than 25% specific to psychiatry (I think medicine is too general)?

Long term, just make sure you lack interest in specific types of jobs that wouldn't be eligible. This is most notably private practice, but also including for profit group practices and anything involving contract work/1099's (as a full time job). The contract work thing is rough as I definitely see a lot of psychiatrists doing that as essentially their full time job.

I might do PP/1099s but assume it would be hard to do right out of residency full time and might have a 30 hr primary job until I can fill my schedule as prefered elsewhere (probably working 50-60hrs my first 5-10 years then cutting back significantly). What do you mean by "contract work thing is rough"?

The VA and other federal agencies offer both PSLF and the less restrictive EDRP together at the same time.

Probably won't do a VA/gov position, but again, nothing ruled out.

 

[annoyedpsychiatrist]

Many jobs are PSLF eligible because 2/3 of hospitals are not for profit, and many hospital systems have outpatient psych +/- CL too. Also community psychiatry centers as well. Basically stick to a outpatient clinics that are part of a large not for profit system, thats why im currently doing. I have 4 years left of pslf...counting the days till freedom

 

[Merovinge]

The value of money is optionality. For someone who's total savings from PSLF is under 1/2 a year worked as an attending, I would likely ignore PSLF and just plan to use the repaye and pay off the loans. Your total burden is under 1x annual salary, if you live like a resident for 3 years out of training you will easily be able to eradicate your loans and not have to worry about your job selection. That said, a huge chunk of work is PSLF eligible, but it's a long commitment in comparison to how long it will take for you to just repay the loan.
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If you had 250k repayable or something north of that, I think it's a different story and I would certainly consider PSLF.

 

[fasadon]

Thanks everyone! I appreciate the responses and have decided what's best for my satisfaction. No need to waste any more time on what ifs