Why doesn't everyone do IBR and PSLF

[jjbove08]

This is the MOST IMPORTANT POINT about PSLF and IBR. Thank you for bringing it up! I read every thread and no one comments on it.
1. Basically, the question is with a typical loan of 250k and IBR during a 4 year residency, does anyone know at what salary you would no longer qualify for IBR ( I'm assuming every attending salary e.g 150k + Doesn't qualify ).

2. Say you no longer qualify for IBR on your 5th year ( attending year), then like was said you would move to the 10 year standard repayment. Does the 10 year plan start right there (total expected payment time 14 years) Obviously after 4 years residency and 6 years after its forgiven with PSLF ( assuming eligibility) but I am trying yo figure out how huge the payment will be in attending years like it will be higher than if you did 10 year repayment from the start right ?

Thank you so much everyone !

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[Dan1804]

Am I correct in assuming that if I wanted to work in another country after residency, for like 6 or 12 months locum tenens, that payments made during that time would not count toward PSLF? Would I still be eligible when I got back?

The 120 payments do not have to be consecutive. Whether payments count depends on the the kind of organization you are working for and the number of hours you work. Foreign NGOs don't count. A US-based 501(c)(3) working abroad would, though, as long as you work 30+ hours per week.

 

[Green Grass]

This is the MOST IMPORTANT POINT about PSLF and IBR. Thank you for bringing it up! I read every thread and no one comments on it.
1. Basically, the question is with a typical loan of 250k and IBR during a 4 year residency, does anyone know at what salary you would no longer qualify for IBR ( I'm assuming every attending salary e.g 150k + Doesn't qualify ).

2. Say you no longer qualify for IBR on your 5th year ( attending year), then like was said you would move to the 10 year standard repayment. Does the 10 year plan start right there (total expected payment time 14 years) Obviously after 4 years residency and 6 years after its forgiven with PSLF ( assuming eligibility) but I am trying yo figure out how huge the payment will be in attending years like it will be higher than if you did 10 year repayment from the start right ?

Thank you so much everyone !

Your payments on IBR will never be higher than what they would be with the standard 10 year repayment schedule.

And no, if you still qualified for PSLF and did IBR, your loans would be gone after 10 years - not 14.

 

[jjbove08]

Your payments on IBR will never be higher than what they would be with the standard 10 year repayment schedule.

And no, if you still qualified for PSLF and did IBR, your loans would be gone after 10 years - not 14.

Thank you so much!
Do you know for a standard 250k loan, at what salary you would no longer qualify for IBR? Like can an attending ever qualify for IBR ha.
Thanks

 

[poohbear12345]

Thank you so much!
Do you know for a standard 250k loan, at what salary you would no longer qualify for IBR? Like can an attending ever qualify for IBR ha.
Thanks

(if you mean 250 upon graduation from medical school, assuming a 5 year residency (and interest+ capitlization) youd have to make 300,000 as an attending to no longer qualify for IBR.


An attending can definately qualify for IBR, and if you dont then you dont even have a problem. IBR can never by higher than your standard payment monthly repayment on a 10 year repayment plan. You can be on IBR in residency and the only need 5 more years to get the PSLF, you can also get PSLF on any repayment plan, ( I believe i you cab mix and match 5 years IBR 5 years standard plan, though this might not be true)

 

[ricardos]

how many of you think this program is going to be around in 10 years?

 

[Postictal Raiden]

how many of you think this program is going to be around in 10 years?

I do.

There must be some type of loan repayment assistance, or half of future doctors will go bankrupt.

After tonight's debate, it looks like Obama is winning, IBR will stay for another 4 years, at least.

 

[dpmd]

There must be some type of loan repayment assistance, or half of future doctors will go bankrupt.

Umm, no. Once fully trained and working I find it hard to believe a doctor would end up making less than 100K a year. At that income, as long as the person doesn't try to live beyond their means they would be able to make the payments on their student loan (particularly if they did an extended plan). The problem is people feel like they are entitled to a new house, new car, fancy clothes, nice vacations, the newest gadgets, etc and end up adding too much other debt. Now the person that racks up a few hundred thousand in student loans but ends up in a job paying under 50K is in a much worse position, but it is hard to imagine a scenario where better planning couldn't have avoided that (not borrowing so much money for a degree that doesn't have that much value would be the best plan).

 

[medicinesux]

You think the public is going to tolerate "greedy" rich doctors and lawyers having their student loans erased. Think again. The bean counters are already on it and released this report in just the past week:

http://chronicle.com/article/Obamas-...t-Plan/135144/

The report URGES policy makers to adopt several recommendations, such as limiting the scope of some of the new, more generous income-based repayment provisions and tightening the eligibility for loan forgiveness for high-income borrowers.

Loan Borrower Beware! I can easily see income caps being phased in down the road where if you make over a certain amount, like 100K a year, you no longer qualify or some other such nonsense.

 

[PCPsRFutr]

Hi there,

I am a 4th year med student right now and looking into the IBR program. I am only ranking non-profit programs and plan to do the PSLF 10 year deal.

I feel pretty comfortable with all the specifics regarding this program except the timeline as to when you actually sign up for the program and get written documentation from my lender saying my monthly payment is X amount of dollars.

Do you know anything about the physician loan mortgage programs? The reason I need a written statement saying my monthly payment is lower than what it would be if I didn't do the IBR program, is that in order to get approved for a 100% financing, no mortgage insurance, Dr/Resident loan, I need that documentation from my lender.

I would like to buy a home at the beginning of residency but that would mean I need to register/sign up for IBR and have documentation of my payment amount in June/July. I have heard people usually don't sign up for IBR until January of their intern year, which if that is the case then I wouldn't be able to buy a home until January.

Anyway, just thought I'd ask in case anyone has any advice! Thanks.

 

[gomizzou]

This is the MOST IMPORTANT POINT about PSLF and IBR. Thank you for bringing it up! I read every thread and no one comments on it.
1. Basically, the question is with a typical loan of 250k and IBR during a 4 year residency, does anyone know at what salary you would no longer qualify for IBR ( I'm assuming every attending salary e.g 150k + Doesn't qualify ).

2. Say you no longer qualify for IBR on your 5th year ( attending year), then like was said you would move to the 10 year standard repayment. Does the 10 year plan start right there (total expected payment time 14 years) Obviously after 4 years residency and 6 years after its forgiven with PSLF ( assuming eligibility) but I am trying yo figure out how huge the payment will be in attending years like it will be higher than if you did 10 year repayment from the start right ?

Thank you so much everyone !

1. You can play with the IBR calculator to get an idea of what may or may not qualify for IBR. Remember that if you are married and file jointly that the spouse's income is included in the calculation (as well as his/her federal student loans).

(Post edited for incorrect info)

 

[PCPsRFutr]

By the way, www.IBRinfo.org is a great website that has helpful info and an IBR loan calculator to help you determine if you will qualify or not.

 

[PCPsRFutr]

1. You can play with the IBR calculator to get an idea of what may or may not qualify for IBR. Remember that if you are married and file jointly that the spouse's income is included in the calculation (as well as his/her federal student loans).

2. The '10 year standard repayment plan' is re-calculated to subtract out the years of IBR you were in. So, if you are no longer eligible for IBR after 4 years of residency your loans payments would change to make the total amount be paid in full in 6 years (10 years from the date you enrolled into IBR). This was not clear to me initially.
See: http://www.ibrinfo.org/faq.vp.html#_What_if_I for their explanation.

If you initially show financial hardship and qualify for PSLF and IBR as a resident and make monthly payments through residency (ex. 4 years=42 payments, because any payments made in the 6 month grace period of residency will not count) then when you are making an attending's salary and no longer show 'financial hardship' you can continue in the PSLF program and finish the 78 payments (120-42) although the last 78 payments will not be based on your income. Refer to http://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness-common-questions.pdf for info and everything you need to know about IBR/PSLF.

 

[gomizzou]

If you initially show financial hardship and qualify for PSLF and IBR as a resident and make monthly payments through residency (ex. 4 years=42 payments, because any payments made in the 6 month grace period of residency will not count) then when you are making an attending's salary and no longer show 'financial hardship' you can continue in the PSLF program and finish the 78 payments (120-42) although the last 78 payments will not be based on your income. Refer to http://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness-common-questions.pdf for info and everything you need to know about IBR/PSLF.

Post edited: My friend who was transitioned from IBR to the standard repayment plan did not do so intentionally. Evidently many of the people that are working at Fed Loans Servicing do not understand all of the ramifications for doing so. Just make sure that you stay in the IBR repayment plan and you should be ok.

 

[sazerac]

2. The '10 year standard repayment plan' is re-calculated to subtract out the years of IBR you were in. So, if you are no longer eligible for IBR after 4 years of residency your loans payments would change to make the total amount be paid in full in 6 years (10 years from the date you enrolled into IBR). This was not clear to me initially.
See: http://www.ibrinfo.org/faq.vp.html#_What_if_I for their explanation.

Do you have a more authoritative source for your information? It sounds highly suspicious to me.

This document

http://studentaid.ed.gov/sites/default/files/income-based-repayment-common-questions.pdf

as published by the US Government directly contradicts you in Q15 / A15:

"Instead, you will be required to pay the amount you would have been required to pay under a 10-year Standard Repayment Plan based on the amount of your eligible loans that were outstanding when you began repaying under IBR. Your repayment period based on this recalculated amount may be more than 10 years."

So the US Government says that if your income rises such that the IBR monthly payment exceeds the monthly payment that would have existed all along if you had never entered IBR in the first place, then your monthly payments would drop to what the original monthly payment would have been back then. Or more simply, monthly payment = minimum of IBR and original monthly payment.

This makes a lot more sense than your version, which could easily stick a new attending with $100,000+ annual loan payments in order to pay off a $400,000 loan within the four remaining years.

 

[gurudoc]

Is it true that residents at for profit hopsitals such as the Drexel program(actually considered employees of Hahnemann University Hospital which is for profit) are not eligible to participate in Public Service Loan Forgiveness for the years that they are in residency at this hospital undergoing residency and fellowship?

 

[sazerac]

Is it true that residents at for profit hopsitals such as the Drexel program(actually considered employees of Hahnemann University Hospital which is for profit) are not eligible to participate in Public Service Loan Forgiveness for the years that they are in residency at this hospital undergoing residency and fellowship?

Since they are a for-profit employer, then any IBR / PAYE loan payments made would not count towards the 120 monthly IBR / PAYE payments necessary to participate in the tax-free 10-year public service loan forgiveness. Those loan payments would count towards the 300(240) monthly qualifying IBR(PAYE) payments necessary for the taxable 25(20)-year standard loan forgiveness though.

 

[gurudoc]

It sure would be helpful to the residents if Drexel University College of Medicine(a not for profit subsidiary of Drexel University) would some how pay the residents instead of Hahnemann University Hospital so as to put their residents on an even playing field with virtually all of the other residents of the US. I would have very much discouraged my GF from applying there had I know this. Oh well. Future folks, take heed.

 

[gurudoc]

http://hotair.com/archives/2012/02/15/good-news-obama-backs-exemptions-for-religious-organizations/

They're just going to find a way to rip it away from all of us anyway quite frankly.

 

[sazerac]

It sure would be helpful to the residents if Drexel University College of Medicine(a not for profit subsidiary of Drexel University) would some how pay the residents instead of Hahnemann University Hospital so as to put their residents on an even playing field with virtually all of the other residents of the US. I would have very much discouraged my GF from applying there had I know this. Oh well. Future folks, take heed.

It's only an uneven playing field if you assume public service loan forgiveness will still exist for highly paid professionals in 10 years time.

 

[gurudoc]

One exposes you to the certainty that you won't have forgiveness.
The other exposes you to the mere risk that you won't have forgiveness.

Would you rather certainly have testicular cancer or a mere risk of testicular cancer?

 

[DJspreadsheet]

Would you rather certainly have testicular cancer or a mere risk of testicular cancer?

It depends how my future children turn out.

 

[gurudoc]

You have to roll the dice first to see how they turn out

 

[Tritleb]

how many of you think this program is going to be around in 10 years?

Basically no chance. That being said, I can't afford any better options.

My advice:
Pay the IBR rates for now and curb a little bit of the interest you're accumulating during residency.

The worst case scenario is congress yanks physician PSLF in 3-4 years (before the first group becomes eligible in 2017), and you work till you're into your 60s paying back on an extended repayment plan. Your income will go down as "Value Based Care" slashes reimbursement across the board (don't kid yourselves, it's going to happen). You'll have a slightly above average, upper middle class lifestyle. Steady income with a decent place. No boat, no wine cellar, no lake house.

Best case scenario, you pay 4-5 years of 2-3k per month after graduating and have your loans forgiven at the end of 10 years (but don't bet on it).

The truth will probably end up somewhere in the middle,

 

[Gauss44]

CANNOT DO IBR WITH HIGH PRIVATE LOAN PAYMENTS

If no one's said it yet, IBR doesn't take private student loan payments into consideration when calculating your monthly payment. For example, if you have to pay $1000 a month on private student loans, IBR will not subtract that from your income. As a result, IBR will be too high to pay.

 

[flankton]

I started private practice. 2 years in I have built a loyal patient base, I work when I want to, and I earn between 60-82K per year. I currently pay $350 per month to IBR and have 200K loans. After 25 years of IBR my loans will be 400-500K and the gov will forgive them but I will be taxed on the forgiveness and owe gov 100K in taxes. So, I have decided to pay IBR for a few more years, until I have a big down payment on a house. Once I have the house mortgage squared away, I can then start paying my loans agressively. But I will always remain on IBR. Nothing about IBR says you cant pay agressively over and above IBR. I see no reason to not be on IBR.