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Student Loans and the 2020 Election

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  • Student Loans and the 2020 Election

    Hi WCIs, quick student loan question. I'm a newly minted attending physician about 1.5 years into practice. Current income is ~180k/year with small chance of increases up to maybe 220/year over the next couple of years. I also have ~150k in student loan debt at an average interest rate of 6.57%. I know I need to refinance the loans to lower my interest rate, but I've been hesitating a bit with the upcoming election. With one party seeming to make some sort of loan forgiveness a common talking point, I'm wondering what y'all think about waiting until the election to go ahead and refinance them. My concern is that if I refinance them now, and some sort of forgiveness program does materialize, I won't be eligible for it since I refinanced to a private institution. On the other hand, it seems like quite a while to wait for what's probably a pretty low chance of loan forgiveness actually happening and I'll be accruing interest at this rate in the meantime. Thoughts? Thanks in advance!

    **Please stay away from the politics part of the discussion for all of our sanity - we just survived family Thanksgiving!**

  • #2
    refinance

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    • #3
      I think the chances of loan forgiveness happening for you, even if the most staunch proponent of it is elected, is near zero. So I would refinance.

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      • #4
        You should have done this a year and a half ago......hurry up already.

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        • #5
          Originally posted by ARDSisbad View Post
          **Please stay away from the politics part of the discussion for all of our sanity - we just survived family Thanksgiving!**
          You should have done this during Thanksgiving. Get your rebate using the vendor list. Do it again later.

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          • #6
            The chances of loan forgiveness is not near zero.
            If you have kept up with politics, crazier things have recently happened. Ex: the tax break for the wealthy which is adding a crazy amount to our country's debt. I could go on...
            The common perception here and with almost everyone I talk to is, "congress would never pass such a thing." Congress is not needed to write off student debt: President, with the education secretary, has the authority to write off this debt. This could be a huge stimulus to the economy as people would inevitably spend that money on buying houses, cars etc.

            I'm putting my money in a CD with 2.25%. If, by this time next year, that certain politician does not win, take out money from your CD and make that huge lump sum payment towards the loans.

            Don't refinance yet.

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            • #7
              Originally posted by drmka26 View Post
              This could be a huge stimulus to the economy as people would inevitably spend that money on buying houses, cars etc.

              I'm putting my money in a CD with 2.25%. If, by this time next year, that certain politician does not win, take out money from your CD and make that huge lump sum payment towards the loans.

              Don't refinance yet.
              The money has already been spent. On school.

              On a $200K debt, your hedge will run $8.5K/year. How many years you gonna let that bet run?

              If you're not going to qualify for PSLF I think you should refinance early and often.
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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              • #8
                “The common perception here and with almost everyone I talk to is,” don’t mix political views with financial decisions. Make decisions on the cards you hold. It is gambling hoping you will be dealt a wild card in the future.

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                • #9
                  Refi now.

                  Kill the debt.

                  Don't depend on a political promise that will likely exclude people making more than 80k per year. If you cannot get PSLF now then just refinance and kill the debt.
                  I frankly would not be surprised if PSLF goes away for high income earning folks soon anyway.

                  The general public does not view docs with student loans as poor. High income = wealthy in most people's minds b/c they spend every dime they make.

                  Docs will always be viewed as rich, by politicians and the public because they don't seem to get how the huge opportunity cost + debt from student loans is a big deal for young docs.

                  They will never be able to look past the high income.

                  Debt = risk. I would kill it and move on with life.

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                  • #10
                    Originally posted by drmka26 View Post
                    The chances of loan forgiveness is not near zero.
                    If you have kept up with politics, crazier things have recently happened. Ex: the tax break for the wealthy which is adding a crazy amount to our country's debt. I could go on...
                    The common perception here and with almost everyone I talk to is, "congress would never pass such a thing." Congress is not needed to write off student debt: President, with the education secretary, has the authority to write off this debt. This could be a huge stimulus to the economy as people would inevitably spend that money on buying houses, cars etc.

                    I'm putting my money in a CD with 2.25%. If, by this time next year, that certain politician does not win, take out money from your CD and make that huge lump sum payment towards the loans.

                    Don't refinance yet.
                    Whatever you do, don't listen to this advice. This is market timing advice wrapped up into politics. You need to refinance tomorrow.

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                    • #11
                      Originally posted by drmka26 View Post
                      The chances of loan forgiveness is not near zero.
                      If you have kept up with politics, crazier things have recently happened. Ex: the tax break for the wealthy which is adding a crazy amount to our country's debt. I could go on...
                      Any possible loan forgiveness will likely be predicated on income, i.e. physicians will be excluded. I would actually bet you substantial real money on the OPs loans not being forgiven in the next 5 years, but that’s probably against forum rules.

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                      • ENT Doc
                        ENT Doc commented
                        Editing a comment
                        I’ll go in on that.

                    • #12
                      OP: Chiming in that, [sarcasm]unfortunately[/sarcasm] you make too much money. You will not, ever, get any loan forgiveness. You are not who (not political) "they" want to help.

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                      • #13
                        While I'm all for student loan forgiveness, I highly doubt it would actually be able to pass Congress (even with full D control), given the amount of purple state reps/senators always thinking about their upcoming elections. Also highly doubt they would even allow someone like Sanders to become the nominee (too much corporate influence in both parties).

                        Second, there are always phase-outs above a certain income. By the time it would actually be implemented, your income would likely be above the threshold anyways.

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                        • Tim
                          Tim commented
                          Editing a comment
                          Rumor has it that phase-outs/phase-in’s are most popular when the word billionaires is used. I can definitely bet on that.

                      • #14
                        You could refi, moonlight a little and have your loans like halved by the time the election even happens...

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                        • #15
                          Originally posted by Panscan View Post
                          You could refi, moonlight a little and have your loans like halved by the time the election even happens...
                          ...something, something.... working smart vs working hard

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