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Poll: Are you participating in PSLF?

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  • Poll: Are you participating in PSLF?

    Did WCI ever decide to permit polls on the forum?

    I think it would be interesting to poll the WCI investor community with the following:

    - Are you pursuing PSLF?

    - Roughly how much do you plan on having forgiven?

    - Roughly what year will you apply for forgiveness?

    It would be interesting to quantify the potential loan burden to be forgiven and the number of people pursing this program. Has anyone seen any numbers published anywhere in that regard?

    [Editor's Note: Yes, polls are permitted, but I haven't spent the cash on allowing you all to set them up yet so you just have to PM me if you really want one. Here are the requested polls. I'll put one on the front page as well to get more participation.]

    [poll id="57"]

    [poll id="58"]

  • #2




    Did WCI ever decide to permit polls on the forum?

    I think it would be interesting to poll the WCI investor community with the following:

    – Are you pursuing PSLF?

    – Roughly how much do you plan on having forgiven?

    – Roughly what year will you apply for forgiveness?

    It would be interesting to quantify the potential loan burden to be forgiven and the number of people pursing this program. Has anyone seen any numbers published anywhere in that regard?
    Click to expand...


    I would also like to hear from those who decided against pursuing PSLF, when they graduated medical school, how long their residency is, and what their loan burden is.

     

    For me:  I decided against it, I graduated med school in 2012, my residency/fellowship will be 6 years total, and my current loan burden is 330k.

    Comment


    • #3
      Im not. Went private, wasnt around at beginning (graduated 2006) of res/fel which would have been 7 years so I probably would have considered it then. Too much paperwork, uncertainty, etc...Loan total was 496k.

      Comment


      • #4
        Still in residency.  Just refinanced with LC from IRB/PSLF.  Decided that paying $400/month in residency was not worth it since I want to be private practice once I'm done.  Will be interesting to see if people are getting $400k forgiven in a few years when people hit 10 years.

        Comment


        • #5
          I'm not, but wife is. Should end up having around $100k forgiven. Haven't seen potential numbers, and couldn't even guess. I've heard the rumblings of capping it but I think they'll have trouble making that retroactive.

          Comment


          • #6
            Decided against it. Graduated in 2012 with ~100k federal debt. Residency + fellowship will be 5 years, and I should have it completely paid off within 2 years of fellowship completion. I have been accepted for refinance by DRB but am still awaiting the paperwork to complete the transfer of funds to their company.

            Despite the plan to go into academics, it did not seem worth it for me since the potential amount to be forgiven was so low and I could save myself a lot of money on interest by refinancing and paying off quickly.

            Comment


            • #7
              I would agree with WCI's loan repayment algorithm for the most part, although I would point out a couple of things that I initially overlooked:

              1)  When considering PSLF and private refinancing with rapid amortization - doing the calculations for yourself, it is important to remember there is a major difference in the fund containing "difference in REPAYE and money I would have put down on the loans" and the fund containing "now I have my loans paid off I can start saving."  If hedging your risk with the first option above (that PSLF will get revoked by congress and you will get stuck paying them off yourself), it is probably smart to maintain a large degree of liquidity (i.e. money market account), which means returns will be very low; otherwise your tax burden could be substantial.  If you have your loans paid off early, you can start building positions in your taxable and tax-advantaged accounts, then take advantage of compounding returns.  When considering this and looking at a span of 10 years repayment, the case for PSLF becomes weaker.

              2)  Prospectively, there might not be an "absolute best move" for everyone.  The PSLF program is, in my opinion, very similar to emerging market government bonds: political volatility in emerging markets means higher credit risk.  In much the same manner, congress may decide in the next two years to simply cancel/reduce the amount forgivable, which is essentially credit risk.  When considering your portfolio components, it is important to not forget this particular risk.

              Overall, these discussions tend to seek an answer to a very basic question: What does the crystal ball show?  I think everyone can agree that no one can, with absolute certainty, predict what will happen.  But Benjamin Graham would say that is irrelevant - each individual should instead seek to choose the amount of risk they are willing to take.  Run the numbers for yourself - if you have a high tolerance for risk, waiting for the PSLF might be for you.  If you have a low tolerance for risk, you may be much happier going ahead and knocking your loans out quickly.  Remember, sleepless nights are not value-less!!

              Comment


              • #8
                I decided against PSLF even though I would currently qualify and would be half way there.

                Why? Because its EM, and I am young and have no idea where I will be working in 2-3 years.

                It's a gamble. Had I been paying only the minimum along the way the interest would be gaining steam at 6.8%. Add the risk of capping the forgiveness in the 50K range after the public outcry in 2017, and that is one big risk to take.

                I would rather payoff the loans aggressively after refinancing at a fixed lower rate 4.5% in my case and control my finances and future decisions and not the other way around.

                 

                Comment


                • #9
                  Could have stayed in it but decided to pay it off instead.

                  They gone.

                  Comment


                  • #10
                    Interesting poll results from above thus far with about 40% of 114 respondents pursuing forgiveness. Not a single person has responded that they expect forgiveness in the possible first wave, from 2017-2019.

                    Comment


                    • #11
                      I graduated in 2010 from medical school with 205,000 in loans despite state undergrad and state medical school. I am currently a fellow. I have paid off 50,000 and have a current balance of 155,000. I have refinanced with DRB at 3.5% fixed with 5 year payoff. I expect to pay off within 2 years of finishing fellowship.

                      I would likely have qualified for PSLF but have opted to pay it off myself ASAP. I have many concerns about PSLF. My biggest issue is that I feel that the program is being abused/overused and that some individuals fail to take responsibility for their loans. This feeling is counter-balanced by my stronger feelings about the government and private loan companies preying on students. I do not think it is fair for the federal government to be charging 6.8 interest on loans for students trying to further their career opportunities. Overall, I am indifferent to those pursuing PSLF but I chose to not pursue that route.

                      Comment


                      • #12




                        I graduated in 2010 from medical school with 205,000 in loans despite state undergrad and state medical school. I am currently a fellow. I have paid off 50,000 and have a current balance of 155,000. I have refinanced with DRB at 3.5% fixed with 5 year payoff. I expect to pay off within 2 years of finishing fellowship.

                        I would likely have qualified for PSLF but have opted to pay it off myself ASAP. I have many concerns about PSLF. My biggest issue is that I feel that the program is being abused/overused and that some individuals fail to take responsibility for their loans. This feeling is counter-balanced by my stronger feelings about the government and private loan companies preying on students. I do not think it is fair for the federal government to be charging 6.8 interest on loans for students trying to further their career opportunities. Overall, I am indifferent to those pursuing PSLF but I chose to not pursue that route.
                        Click to expand...


                        Those feelings should have nothing to do with your choice to use or not however. You should be indifferent to it, has little to do with you and wont alter your working or investment life to any noticeable degree whatsoever. Feelings and investing/finance are things that should be kept very separate as its highly likely to influence it in a negative way. You and everyone else have options available to them, no one is morally wrong to take whats legal and available, and if you dont like it we can always vote and support people that agree with us.

                        Comment


                        • #13


                          Those feelings should have nothing to do with your choice to use or not however. You should be indifferent to it, has little to do with you and wont alter your working or investment life to any noticeable degree whatsoever. Feelings and investing/finance are things that should be kept very separate as its highly likely to influence it in a negative way. You and everyone else have options available to them, no one is morally wrong to take whats legal and available, and if you dont like it we can always vote and support people that agree with us.
                          Click to expand...


                          Point well taken. I agree with you. I am able to separate emotions from investing. I don't know that I will ever agree with those that accumulate significant student debt, live like they have no student debt, and then have their loans forgiven in the end. We all know people like this and I don't believe that PSLF was intended for this. Just because I don't agree with their actions does not mean that I blame them for taking the PSLF because I recognize it is legal.

                          Comment


                          • #14
                            I also agree with this point. The decision should be based mainly on your risk tolerance. I think there is a 70% chance that PSLF is fine for the first couple of years and then will be capped at a certain amount after public outcry or some bubble bursting. By 2020-2025 I give it 50/50 for a full mega forgiveness. People would be stuck with a lot of accrued interest if that were the case. If all goes well certainly a great loophole for MDs just too risky for me.

                            Comment


                            • #15
                              Self-pay, although my field would be a good fit for somebody with a lot of qualifying debt.

                              Graduated in 2010 with somewhere around $30-35k. IIRC I did not even qualify for IBR (necessary for PSLF at the time) without a dramatic reduction in AGI. Grew up middle class and debt-averse and made decisions along the way consistent with that - public state undergrad with a full ride vs elsewhere, well-ranked state med school, lots of part time jobs along the way. If I had to do it again I would have done Roth 401k (in addition to the maxed Roth IRA) instead of throwing chunks of money at the loan, but obviously I'll turn out okay.

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