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I graduated from medical school in May and am now a first year resident working on a plan for my student loans.
Current status of my Federal Loans is as such:
From Undergrad: $2.5k Direct Loans Subsidized at 4.5% Interest Rate; ~$27k Direct Loans Unsubsidized at 6.8% = Total of $29.5k. I graduated early from college and used the grace period on these loans already, so since June, I have already technically been making "payments" under the RePAYE plan, although since my income was $0 last year and I applied for RePAYE in May 2016 prior to starting residency, my monthly payments are currently $0.
From Med School: ~Four Stafford loans, all unsubsidized, totaling $126k with most interest rates 5.4-5.8%; $2k in Perkins Loans, in Grace Period until March 2017
I can consolidate the Direct Loans and the Perkins Loans into a Direct Consolidation Loan totaling ~157k at 5.875%.
My initial plan was to pay off the Perkins Loan this year before the first payment is due to avoid interest, but upon realizing that consolidation for it is an option, which would make it eligible for PSLF, I'm thinking it may be wiser to save that $2000 for my emergency fund or apply toward a Roth IRA.
Again, my grace period for my medical school loans ends in November, and for my undergrad loans, I am currently making $0 monthly payments under RePAYE that I assume qualify for the 120 payments needed for PSLF. Although, ten years down the road, one wonders if you can receive PSLF for two separate loan groups, one from undergrad and one from med school, six months apart (?). If I consolidate now, I realize that question would be moot since by switching to a Direct Consolidation Loan, I would be wiping out the two (2/120) $0 monthly payments I have made for my undergraduate Direct loans. By consolidating now, I would also wipe out the relatively small extra benefits of RePAYE toward the $2.5k subsidized loans that I have (government pays 100% of the interest accrued for first three years vs. only 50% of accrued interest for unsubsidized). Also, by consolidating now, would I immediately have to begin making non-zero monthly payments based on my new residency income? I applied for RePAYE in May before my residency job had started and basing my income on my Federal tax return from 2015 (income was $0), hence my current payments are $0.
In summary:
(1) In my specific situation, should I pay off the Perkins Loan this year, or should I consolidate, and if I should consolidate, when should I do it, considering the loans that are currently in grace period? (may be informed by answers to questions 2, 3, and 4...)
(2) Can you receive PSLF for two separate loan groups given that without consolidating, I'll have made 120 monthly payments for my undergrad loans before I have made 120 monthly payments for my medical school loans?
(3) By consolidating now, would I immediately have to begin making non-zero monthly payments based on my new residency income?
(4) Since I am already on RePAYE for my undergrad loans, will I have to resubmit my income information in November when the grace period for my medical school loans expires and thus begin having to make real monthly payments (~$300) then anyway? Or will my $0 monthly payment persist for a year until May 2017? My undergraduate and medical school Federal Loans are with the same service provider.
Confused yet? I am, too... Thoughts? Let me know if I can provide more detail that would help with advice.
Current status of my Federal Loans is as such:
From Undergrad: $2.5k Direct Loans Subsidized at 4.5% Interest Rate; ~$27k Direct Loans Unsubsidized at 6.8% = Total of $29.5k. I graduated early from college and used the grace period on these loans already, so since June, I have already technically been making "payments" under the RePAYE plan, although since my income was $0 last year and I applied for RePAYE in May 2016 prior to starting residency, my monthly payments are currently $0.
From Med School: ~Four Stafford loans, all unsubsidized, totaling $126k with most interest rates 5.4-5.8%; $2k in Perkins Loans, in Grace Period until March 2017
I can consolidate the Direct Loans and the Perkins Loans into a Direct Consolidation Loan totaling ~157k at 5.875%.
My initial plan was to pay off the Perkins Loan this year before the first payment is due to avoid interest, but upon realizing that consolidation for it is an option, which would make it eligible for PSLF, I'm thinking it may be wiser to save that $2000 for my emergency fund or apply toward a Roth IRA.
Again, my grace period for my medical school loans ends in November, and for my undergrad loans, I am currently making $0 monthly payments under RePAYE that I assume qualify for the 120 payments needed for PSLF. Although, ten years down the road, one wonders if you can receive PSLF for two separate loan groups, one from undergrad and one from med school, six months apart (?). If I consolidate now, I realize that question would be moot since by switching to a Direct Consolidation Loan, I would be wiping out the two (2/120) $0 monthly payments I have made for my undergraduate Direct loans. By consolidating now, I would also wipe out the relatively small extra benefits of RePAYE toward the $2.5k subsidized loans that I have (government pays 100% of the interest accrued for first three years vs. only 50% of accrued interest for unsubsidized). Also, by consolidating now, would I immediately have to begin making non-zero monthly payments based on my new residency income? I applied for RePAYE in May before my residency job had started and basing my income on my Federal tax return from 2015 (income was $0), hence my current payments are $0.
In summary:
(1) In my specific situation, should I pay off the Perkins Loan this year, or should I consolidate, and if I should consolidate, when should I do it, considering the loans that are currently in grace period? (may be informed by answers to questions 2, 3, and 4...)
(2) Can you receive PSLF for two separate loan groups given that without consolidating, I'll have made 120 monthly payments for my undergrad loans before I have made 120 monthly payments for my medical school loans?
(3) By consolidating now, would I immediately have to begin making non-zero monthly payments based on my new residency income?
(4) Since I am already on RePAYE for my undergrad loans, will I have to resubmit my income information in November when the grace period for my medical school loans expires and thus begin having to make real monthly payments (~$300) then anyway? Or will my $0 monthly payment persist for a year until May 2017? My undergraduate and medical school Federal Loans are with the same service provider.
Confused yet? I am, too... Thoughts? Let me know if I can provide more detail that would help with advice.
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