New Attending - To PSLF or Not

[VTSAX_Storm]

Hello,

New attending here just recently started my first full time gig. I'm working on getting my financial "house" in order and the first big piece to figure out is a student loan strategy. I'm leaning towards aggressive payoff, especially considering the recent instability of the EM job market, but would love the opinion of the WCI hivemind. Here is my overall situation:

Income:
Mine: Base of 330K, up to 360K depending on bonus and overtime.
Fiancé: 65K
Emergency Fund: 15K
Retirement Accounts:
Roth from residency: $22K
Finance 401K: 22K
Student Loans:
Mine: Fed 205K @ 6%
Finance: Fed 30K @ 6%
COL: ~55K. Currently "living like a resident" (literally in the same apartment) and hope to do so for at least 2 more years.

My job is at a 501c3 so qualifies for PSLF and I've made 3 years of minimum payments during residency. Based on some crude calculators I found online, total estimated payment with PSLF would be 191K over 7 years. If I refi for a 3 year payoff @ 2%, I'd pay ~225K. So holding out for PSLF would save me 35K in the long run. In addition, I would have a lower monthly payment to try to meet my shorter term financial goals (save up 200K for downpayment/wedding/car) and perhaps be able to put some more money in the market. This would come at the cost of the mental burden of debt and being tied to this job (which seems pretty good so far but 7 years is a long time). Thanks in advance!

[Andrew StudentLoanAdvice]

Depends on if you're going to stick around at the qualifying jobs.

I plugged your numbers into my student loan calculator

PSLF on your income over 7 years aggregate payout is ~165k assuming you're enrolled in PAYE and file taxes MFS when you marry. Monthly payments average about $2k over 7 years.

Private Refi on a 3 year 2.25% aggregate payout is 212k. Monthly payments average about $5.9k

With PSLF you could save a couple thousand dollars a month to help pay for wedding/cars/max retirement accts/home down payment.

But then you need to stay at a qualifying employer for 7 years. Tough decision but some significant dollars to be saved unless you can get paid quite a bit more at a private practice EM job.

[Turf Doc]

Is that compensation roughly comparable to private offers? It doesn’t seem too low considering it qualifies for PSLF.

If you like the job you should definitely get your taxable income as low as possible through retirement contributions. Do you have access to a 403b or 457b as we? You’re a textbook case for the PSLF side fund so you don’t feel trapped in the job.

[VTSAX_Storm]

Turf Doc, pay is actually above market for the area for being employed and is rare being PSLF. The only way to increase income would be to go the private group / partner route and work 2-3 years at 220Kish before a big pay bump to ~400K. So far I like the job but it is pretty early on, I'll probably know more by January when I'll have to make a decision. I plan to fully contribute 19,500 to 403B to get match (no 457b/HSA/IRA options through job). Where does one keep this "side fund"? HYSA? Would I just park the difference between aggressive payment and PSLF in this account (I imagine around 5K per month)

[Turf Doc]

If it was me, considering leaving your job or not getting PSLF when you rightfully deserve it (not sure this has ever actually happened) does not mean you immediately need to cough up the entirety of your student loans, I would just invest it according to your asset allocation. If you actually needed to use it I would probably just stop taxable contributions and direct it toward the loans until they were gone.

[Otolith]

I would do things in the following order
1.Continue with PSLF
2. I would refinance partner student loans and file MFS until there is no benefit on monthly payment
3. Fund emergency fund
4. hammer out partners student loans (unless you get rate <3%)
5. Save 20% retirement
6. With whats left take 1/3 and put in a PSLF side fund and the other 2/3 save for your goals

That PSLF side fund will come in very handy if you contemplate leaving your job or loan forgiveness does not work.

[WorkforFIRE]

You seem like a good saver and have the right mindset of living like a resident. I was in a similar position. My suggestion is to stretch the living like a resident to 5 years. Trust me, you’ll be so thankful and your financial life will be on autopilot after that. 5 years will fly by.
pay off loans aggressively. Have your weddings whenever. Don’t buy a car unless it’s in cash and loans paid off. Save 20% for retirement (~65k). And most importantly, avoid lifestyle creep.

My 2 cents. Good luck