Reality of PSLF being beneficial to EM physician?

[hoosier]

My wife is an intern for Emergency Medicine.

We currently have about 200k in loans ( mostly at 6.8%). Our annual combined income is around 100k for the next 3 years. We have approximately 30,000 in an emergency fund.

It seems that most, if not all Emergency Departments are run by for profit private groups these days, which would make qualifying for PSLF as an attending nearly impossible.

Does anyone have any insights into this?  I don't want her to be tethered to a VA system or low paying 501c3 hospital and not get her fair market earnings out of residency just to stay in the PSLF program. She is currently on the PAYE repayment plan. We are struggling with the decision on how much we should be putting toward her loans.

 

Thank you for your insights!

[TotallyBroke]

EM trained here.  I was going to go PSLF route until I realized that where I wanted to live, that wasn't a viable option.

If you are unsure at all, I would recommend paying the minimal required towards student loans.  Any extra that you want to throw at the loans could go into a taxable investment account if you're aggressive or a savings account if you're more conservative.  Call that money "Student Loan Payoff" and let it sit there.  Then, when she does get a job you'll be sitting in a better situation.  Either, you will have a big chunk of money to pay down loans (which cost you a little extra in interest payments over the next 2 years), or you have money to use as a down payment for a house or an $80K wakeboat (JK... sort of).

[PhysicianOnFIRE]

After 7 years of PAYE as an attending, there may not be much student loans left to forgive, even if you are at a qualifying institution.

But that's not to say there are no jobs with decent pay that would qaulify. All of our ER docs are hospital employed by a 501c3 hospital, and pay is at or above mean for the specialty. Same with other larger hospitals in our system.

[DMFA]

Even if you're going to forego PSLF and refinance after residency, you're probably best off doing RePAYE now anyway instead of refinancing now.  That prevents too much interest from accruing and keeps the door open either way.

When residency is over, if the job she finds is PSLF-eligible, then you can still think about doing it, but keep in mind that your payment will be pretty high with RePAYE and you might even beat out the debt before the 120-payment mark; assuming your wife makes just under the EM average of $339,000, and you make $50,000 or so (just guessing, since you said you made $100,000 combined), you'd actually repay the debt before hitting 120 RePAYE payments.

Since that debt is not really all that high, and her income will be, then I have a feeling you'd be better off refinancing and eliminating the debt once residency is over.  You could do PAYE/PSLF which would save you $40,000 over the years, but lock you into being all of full-time, employed, and for a non-profit (which might not be the worst gig, but lessens your flexibility). Here's my work:

[jz]

I'll challenge your premise that most EM work is employment by for-profit private groups.   I don't have numbers on this, and it may be regional, but I see far more employment by nonprofits.  Does anyone have this data?

[The White Coat Investor]

hoosier wrote:

My wife is an intern for Emergency Medicine.

We currently have about 200k in loans ( mostly at 6.8%). Our annual combined income is around 100k for the next 3 years. We have approximately 30,000 in an emergency fund.

It seems that most, if not all Emergency Departments are run by for profit private groups these days, which would make qualifying for PSLF as an attending nearly impossible.

Does anyone have any insights into this?  I don’t want her to be tethered to a VA system or low paying 501c3 hospital and not get her fair market earnings out of residency just to stay in the PSLF program. She is currently on the PAYE repayment plan. We are struggling with the decision on how much we should be putting toward her loans.

 

Thank you for your insights!

Click to expand...

You basically need to work at the VA or stay on as faculty for this to work out. The fact that you have an income during residency is also going to reduce the amount you would get forgiven. But don't assume you will be paid less just because you work at a 501(c)3. That isn't true at all and is highly variable.

[EM_INDY]

Not sure where your wife is training but going off your username, I figure IU is a strong possibility. If you guys are planning to stay in Indianapolis after residency, the only 501c jobs eligible for PSLF would be joining the clinical faculty with the IU residency or working at the VA. All the other jobs in town are currently with private democratic groups. Feel free to contact me directly if you want to hear more about the various Indy area jobs. EM is a small world, most of us in Indy personally know at least a couple other Emergency Physicians at every other shop in town.

[hoosier]

Thanks so much for your response DMFA,

When you said we would be better off with REPAYE until we refinance, did you mean PAYE? Not sure if I'm missing  a more beneficial aspect of the subsidized interest on the REPAYE program? My plan right now is to be in the PAYE program until she finishes residency, then refinance. We don't want to be locked into full time employment at the VA.

 

I agree with EM_INDY in regards to the majority of jobs for EM graduates are most definitely with for-profit large or democratic groups. 3/3 Large academic 501c3 hospitals in our area  have privately run Emergency Departments. EM seems to be unique in this manner?

 

 

 

[hoosier]

hoosier wrote:

Thanks so much for your response DMFA,

When you said we would be better off with REPAYE until we refinance, did you mean PAYE? Not sure if I’m missing  a more beneficial aspect of the subsidized interest on the REPAYE program? My plan right now is to be in the PAYE program until she finishes residency, then refinance. We don’t want to be locked into full time employment at the VA.

 

I agree with EM_INDY in regards to the majority of jobs for EM graduates are most definitely with for-profit large or democratic groups. 3/3 Large academic 501c3 hospitals in our area  have privately run Emergency Departments. EM seems to be unique in this manner?

 

 

 

Click to expand...

Sorry to bring this back from the dead, but any insight  on "When you said we would be better off with REPAYE until we refinance, did you mean PAYE? Not sure if I’m missing  a more beneficial aspect of the subsidized interest on the REPAYE program? "

 

Thanks

[DMFA]

Because RePAYE, while it might have a slightly higher payment than PAYE, would still prevent half the unpaid interest from accruing. At $100k you should be able to afford that payment, and since you're likely on the hook for the debt anyway, might as well pay a little bit now and let the government subsidize the rest.

In order to get the lowest payment possible for PAYE, you'd have to file taxes separately, which often means more paid in taxes, negating some of the benefit. Plus, if you're not doing PSLF, you're still on the hook for all the unpaid interest anyway, which will start bearing interest of its own when you refinance or it capitalizes.

PSLF's future is not looking outstanding, and you can generally make way more money in EM as something other than an employee of a non-profit (not accounting for side-work), so RePAYE works for either situation: a bit more paid now, but limits overall amount paid on the loan thanks to the half unpaid interest subsidy and retains PSLF eligibility just in case she finds a full-time non-profit employed job she wants.

[Strider_91]

hoosier wrote:

My wife is an intern for Emergency Medicine.

We currently have about 200k in loans ( mostly at 6.8%). Our annual combined income is around 100k for the next 3 years. We have approximately 30,000 in an emergency fund.

It seems that most, if not all Emergency Departments are run by for profit private groups these days, which would make qualifying for PSLF as an attending nearly impossible.

Does anyone have any insights into this?  I don’t want her to be tethered to a VA system or low paying 501c3 hospital and not get her fair market earnings out of residency just to stay in the PSLF program. She is currently on the PAYE repayment plan. We are struggling with the decision on how much we should be putting toward her loans.

 

Thank you for your insights!

Click to expand...

Have you tried using the medscape REPAYE loan calculator? I did it with future earning possibilities before starting med school and it didn't look like an EM attending would get much forgiven at all with REPAYE. It is waaaaaaaaaaaay better for long training specialties.