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Loan payback as part of job offer— private loans ok?

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  • Loan payback as part of job offer— private loans ok?

    this may be a dumb question and I’m assuming the answer is yes but I have very modest student loans that would be completely paid for by the student loan payoff incentive many of the job offers I am looking at cover (I realize this is just a loan that goes away).

     

    my question is— my loans are currently federal at 6.8%. I would like to refinance them private to get a lower rate and improve cash flow for the last 2yrs of residency. These student loan payoff offers as part of new contracts aren’t specific to federal loans usually are they?

     

    thanks for any insight

  • #2
    Ive never heard anything like that, its simply an incentive, they likely wouldnt care who the servicer is.

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    • #3
      After I finished residency I had loan repayment from my employer and through the state as it was an underserved area. I did have some private loans but mostly they were federal. This was not a issue at all and I don't think they even asked but its been a few years so no sure. It worked out well for us and was nice to have someone else pay the bill so I could focus on savings.

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      • #4
        Is there a tax incentive to employer to do this versus just give more cash as part of sign on bonus?

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        • #5
          No tax incentive that I'm aware of. To your employer, they have decided on a total compensation number. However those buckets are filled (salary, sign-on bonus, student loan pay-back, etc.) are largely irrelevant to them.

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          • #6




            No tax incentive that I’m aware of. To your employer, they have decided on a total compensation number. However those buckets are filled (salary, sign-on bonus, student loan pay-back, etc.) are largely irrelevant to them.
            Click to expand...


            This is incorrect.  Hospital systems have a separate funding bucket/program from either the state or federal government for student loan repayment.  Thus, it's easier to get different "buckets," especially student loan repayment.

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            • #7
              I also got a loan repayment incentive when I signed my contract. They just cut me a check for $75,000. I used part of it on loan repayment and the majority on a down payment for my current house. I am still paying off student loans by the way. 3.5 years out of fellowship and will have loans completely paid off in the next 1.5 months.

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              • #8
                Definitely have the hospital pay your student loans directly so you don't have to pay any tax on them giving you a check directly.

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                • #9




                  Definitely have the hospital pay your student loans directly so you don’t have to pay any tax on them giving you a check directly.
                  Click to expand...


                  It's taxable either way. You will either get a 1099 or have it added to your W2.

                  H.R. 795, the Student Loan Assistance Act, was introduced in 2017 to allow employers to pay up to $6k/yr with a lifetime cap of $50k tax-free to employees but it hasn't gone anywhere.
                  Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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