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PSLF or IDR (with separate spouse income)

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  • PSLF or IDR (with separate spouse income)

    Starting as an intern in July, curious what the general thoughts are about this. My wife makes about $80,000 per year so we can afford to pay more than minimum payments. I have approx $180,000 in student debt. Planning on 3 year Peds and 3 year fellowship.
    Specifically, I listened to WCI Podcast 138, took lots of good info and notes from it.

    Looking for advice on the following strategies:
    - Try PSLF, make the 120 monthly minimum payments, remain at 501c3, etc. --BUT-- place the other thousands per month we would spend on an IDR (paying above minimum payment) into a "PSLF Side Fund" in case I decide to stop PSLF, move from 501c3, forgiveness rates remain in the toilet, or if Congress wrecks it somehow.
    [Bottom line: I would not spend the money we have budgeted for loan repayment, anything above the required minimum payment would sit in a fund untouched]

    - Choose IBR or REPAYE (still deciding), file taxes separately from spouse, and pay off debt in <10 years by paying somewhere between $3-5,000 per month

    Genuinely conflicted here because it seems like PSLF forgives a lot more debt if you get approved. And with the side fund laying around in the case of denied forgiveness, the loss seems minimal. Not to mention a progressive administration could axe the tax bomb of the forgiveness, making PSLF more appealing. But IBR/REPAYE also allow for low monthly minimum payments, with the option to pay extra per month and get closer to washing our hands of the debt sooner than 10 years.

    Thanks in advance for your thoughts!

  • #2
    Do whatever plan allows you to pay the least during training and count towards PSLF. I know those low interest rates are tempting, but you never know what the future holds. I nearly refinanced my loans in residency bc I thought for sure I was going into a certain type of practice. However, a great opportunity arose which qualifies for PSLF. Glad I held off. And yes, I save in a PSLF Side Fund as well in case things don't pan out.


    • #3
      Unless things have changed, MFS is not beneficial for REPAYE. Spouse income will still count towards calculating monthly payment.

      And pslf is already tax free, i.e there is no tax bomb.

      Don't refi if there is any chance you'll go for pslf.