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Any benefit to forgo 6 mo grace if REPAYE and not planning to PSLF?

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  • Any benefit to forgo 6 mo grace if REPAYE and not planning to PSLF?

    It is evident the benefit of forgoing 6 month grace period when doing repaye for PSLF (more payments towards PSLF), but is there any benefit to forgoing the 6 month grace if I am NOT planning to use PSLF?


  • #2
    I'm a graduating M4 who is in the same boat and asked the question on a different thread, and here is the answer I got.

    Originally posted by East coast View Post
    Sorry I didn't see this earlier to respond as I usually like to respond to all the student loan questions I can, but I suspect that there were no responses because this one's pretty self solving.
    If you go on grace period - not required to make payments, but interest grows at 100%.
    Consolidate and enter REPAYE immediately - not required to make payments (assuming no income, entering residency, yada yada), but interest grows at 50%.
    Capitalizing interesting, subsidized loans and other things may effect the math, so feel free to pull out the Excel to solve for your own scenario, but it seems like an easy answer to me.
    It seems like for those using REPAYE for the low effective interest rate during residency and not going for PSLF (planning to refinance privately as attendings), you should still consolidate as soon as possible and forgo the grace period. If I'm understanding correctly, not only will this save you 50% of the interest but if you filed your taxes for 2019 with an income of zero, your monthly payments for all of intern year under REPAYE would be $0 anyways, so you essentially retain the benefit of the grace period.

    I've linked that thread if you want the original discussion, which also deals with the earliest possible moment to consolidate and enroll in REPAYE.
    What is the earliest possible moment you can enroll in REPAYE so as to start accumulating $0 payments towards PSLF as early as possible? I'm an MS4 who will be graduating in May