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Figuring out student loan plan for this situation

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  • Figuring out student loan plan for this situation

    I know we should do something to minimize the interest we accrue, but I'm not quite sure what yet! I'd love any help on trying to navigate what the best options are for our situation.

    My husband is currently in year 2 of a 6 year training path (Rads) and we have $94k of Stafford loans. $16k are subsidized, but the rest are unsubsidized. Right now all are in forbearance.

    We put them in forbearance because I currently work and make a pretty decent income. I don't remember the details at the time, but I don't believe there were any options that offered a payment less than a mortgage. The plan was for me to stay at home at some point in the near future, and it made more sense to forbear and pay what we wanted to each month vs be tied to a fixed payment for X amount of time, especially as we were trying to establish a cushion for me to stay home.

    In the end, we didn't end up paying much, and I'm honestly not sure we will, especially when I quit. We are committed to continue "living like residents" when he does finish and paying it down quickly, though. In the meantime, I want to do what we can to keep the interest accrued as low as possible. And that is where I am getting stuck!

    This is likely the year I start staying home, though our 2016 total income will still be high (for a resident family) for a few reasons. Am I correct that our repayment options for 2017 will be based on our 2016 income? The other wildcard is moonlighting. My husband can begin in a few months and apparently some of the opportunities can be fairly lucrative in the later years of residency, but we have no idea how much he is really looking at and if they are payed on his W2 or a 1099.

    I'm fine with a monthly payment in the $200-300 range, but I really don't want to get in a situation where it is higher than that. We will have a good cushion, but we also have 3 small kids, sucky program health insurance, and a (reasonable) mortgage.  At the same time, I don't want $80k accruing at 6.8% for 4 years when there are other options out there. Should we look at refinance options before finishing residency? Are IBR or REPAYE going to give us any benefit before 2018? (based on income numbers)



  • #2
    You really didn't give us any income numbers to work with.  As far as IBR/REPAYE vs refinance with private it really matters what the long term plan is.  A 6 year residency with 4 more years of academic work will not take long to pay of the loans through the government.  At the same time, a private rads group and "living like a resident" will pay off 94K plus accrued interest very quickly.

    I personally have some sort of feeling that we should just pay the money back as fast as possible to benefit the rest of society but I can't blame anyone for handing the check back to the government.  At my house we are regretful we didn't latch onto IBR in a more efficient fashion.  We have too many not quite qualified payments to help us out in the long term and so the plan is just to pay everything we owe as fast as possible.


    • #3
      As far as income, we will probably bring home about $130k this year before I leave (I have a large stock award coming up this year that makes up a chunk of that). After that his salary is in the 60K range. Moonlighting will probably bring in $5-30k gross depending on the year, but it totally depends on what the moonlighting situation looks like at the time.

      He doesn't want to go academic and we were under the impression loan forgiveness was pretty rare for radiology in general. We weren't counting on that happening at all.


      • #4
        WCICON24 EarlyBird
        If there is no plan to go academic and you want to keep payments to a minimum, then I would talk to one of the companies to see about refinancing.  You would at least have less accrued interest.  At 94K and a middle range interest rate you'd probably be able to cover it with a portion of the moonlighting money.  It just depends on the budget for the household.  Maybe someone can comment on this but I believe you could make the minimum $100 dollar payment with DRB and then additional each year to keep the interest from accumulating.  It does not appear that the interest capitalizes which would give you the breathing room to decide how much to pay and when.