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Hospital loan repayment stipend and PSLF clash

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  • Hospital loan repayment stipend and PSLF clash

    We have multiple clients being offered student loan repayment bonuses from potential employers.

    The deal typically looks like this... hospital XYZ offers $25k/yr toward your student loans if you sign on with them. It's typically setup as direct payment to the student loan lender. But is considered taxable income to the physician.

    Most the hospitals offering this type deal are 501c3. So their new physician hires are prime time PSLF candidates. But the stipend actually hurts them more than helps them (if paid directly to the lender in a lump sum).

    In my experience, some of the hospitals are willing to play ball and pay the stipend directly to the physician. And therefore preserve the PSLF benefits. But others are not. I'm dealing with one now that refuses to adjust their policy.

    Anybody have luck dealing with this situation?

  • #2
    WCICON24 EarlyBird
    I don't have an answer to your question unfortunately but I was just thinking of this same scenario today. In your experience, do these employers give specific reasons why they wouldn't be willing to pay the employee directly?

    Have you tried negotiating for alternative benefits other than just a cash payout? When I was thinking about this scenario, I thought it would make sense to ask for a better 403b match instead of the loan repayment money. It would boost retirement savings (which is where I'd be putting my extra money, gotta catch up after residency) plus doesn't affect your taxable income = doesn't increase your IBR payment.