Announcement

Collapse
No announcement yet.

REPAY vs PAYE for anesthesia resident

Collapse
X
Collapse
First Prev Next Last
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • REPAY vs PAYE for anesthesia resident

    I am thinking about going for REPAYE, but I wanted to make sure this is the right move. I’m starting anesthesia residency next year with about 230,000 in federal loans. I will likely be married by year 2 of residency. My plan is to live like a resident once I’m an attending and pay off those loans within 2-3 years - I am likely going into private practice, so no PSLF. My spouse is also a resident and I will be done with my residency before her. Does it make sense to go with REPAYE in order to get the interest subsidy over PAYE, given my financial plan/situation?

  • #2
    Try to get an idea of the job landscape where you hope to end up. Where I trained, the local anesthesia groups I was considering were all private groups contracted by the hospital, thus didnt qualify for the loan forgiveness programs. As such, I refinanced as an intern and saved 10's of thousands of dollars in interest over the course of residency and fellowship. Will have them paid off less than 2 years out of training, starting with more debt than you mentioned.

    Comment


    • #3
      REPAYE and PAYE are typically used for people going for PSLF. Since you're not, seems like it would make more sense to refinance to get a lower interest rate during those 2-3 yrs of payoff. The calculator in this article may help.
      Financial planning, investment management and CPA services for medical professionals | 270-247-6087

      Comment


      • #4
        REPAYE may be a PSLF eligible plan, but it often times is the mathematical best option for non-PSLF-ers as well during residency.

        Run the numbers and check out what refinance looks like, but it's possible/probable that REPAYE is the best option. Similarly unlikely that PAYE is relevant in this situation.

        In REPAYE, you're effective interest rate can be as low as (X-.25%)/2. We don't have enough info to figure that out, but assuming you have 6.08% rate, assuming MFJ at 100k AGI, it looks like you're payment would be $633 per month. that'd give you a subsidy of $266 per month which would drop the effective rate to about 4.7% (that can be lowered if your AGI is lower).

        Comment


        • #5
          It should be re-stated in case its missed: YOU WILL NOT QUALIFY FOR THESE IN PRIVATE PRACTICE.

          Comment


          • #6
            This Kitces article out today sounds promising, but I have no comment other than everything else that appears in his column is worthwhile and well-researched: Selecting Income-Driven Repayment (IDR) Plans To Manage Student Loan Obligations
            Financial planning, investment management and CPA services for medical professionals | 270-247-6087

            Comment


            • #7
              Hey everyone, thanks for the helpful responses on my previous post!

              Now that I have decided to go with REPAYE, how can I go about calculating the amount that I will owe on my loan after making the required payments for REPAYE during residency?

              Thanks for all your help!

              Comment


              • #8
                I moved your post back to your original as you had not yet responded and it's a continuation of your initial question.

                Comment


                • #9
                  Originally posted by Peds View Post
                  I moved your post back to your original as you had not yet responded and it's a continuation of your initial question.
                  Thank you!

                  Comment


                  • #10
                    I would suggest using the calculator jfox linked to and creating an excel. Then guesstimate- year 1 my AGI is X, year 2 our combined AGI is Y (assuming marriage), so on and so forth. Then you add subtract multiply and divide to come to the total amount left.

                    In my very simplified example above, you'd have 230000 + unpaid interest of 12768 (4 years of $266) = $242,768

                    Comment


                    • #11
                      You're planning on private practice, thus no loan forgiveness. Why would you not refinance at a lower rate? Not unusual to cut the interest nearly in half. Most programs have $100-200/mo payments during training. Maybe I'm missing something

                      Comment


                      • #12
                        Originally posted by 8arclay View Post
                        You're planning on private practice, thus no loan forgiveness. Why would you not refinance at a lower rate? Not unusual to cut the interest nearly in half. Most programs have $100-200/mo payments during training. Maybe I'm missing something
                        OP likely will have an effective interest rate year one of 3% ish and required payments of $0 by staying in REPAYE if they consolidate immediately after graduation and start payments right away. Then they should pretty easily continue to have effective rates in the 3-4% range after that. Do you know a private refinancer that has rates lower than that?

                        Comment


                        • #13
                          Forgot about the interest subsidy, makes sense. Im currently under 2% through SoFi, although its a 5 yr variable. Not sure thats worth switching to compared to REPAYE

                          Comment


                          • East coast
                            East coast commented
                            Editing a comment
                            I assume you are post training as well? A rate given to a resident vs a rate given to an attending with a contract in hand is worth hundreds of basis points. I’ve heard of 5+% being normal for residency refinancing, though I’m sure that can change due to a number of factors.

                          • 8arclay
                            8arclay commented
                            Editing a comment
                            Fair point. Yes, I'm early attending. I was at 4% fixed as resident/fellow, consistent with what you're saying

                        • #14
                          I developed this YouTube video analyzing REPAYE for medical students. Might be of interest to you.

                          https://www.youtube.com/watch?v=hB1V6ifG43c

                          Comment

                          Working...
                          X