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[Presidential Candidates] vs Re-finance vs PSLF

Home Student Loan Management [Presidential Candidates] vs Re-finance vs PSLF

  • The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
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    Joined: 05/13/2011

    I’m unclear entirely how PSLF works, but is there a way to hedge your bets. Ie refinance part of your student loan. If you have 500k in student loan, refinance say 250k in private loan, then keep the other 250k in PSLF assuming you might be able to get that forgiven someday. Just curious of the possibilities. Only under the most unique scenario would it make sense since it would drastically increase monthly payment and you’d probably pay off your student loan before it got forgiven.

    Also as a side note. I would definitely refinance the whole thing and give up on PSLF. A bird in hand is worth 2 in a bush. Id take the savings now over any type of bet that puts faith in student loan reform assisting the 200k earning doctors.

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    PSLF is current law, not some campaign promise floated by a third tier candidate.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #244204 Reply
    Avatar StarTrekDoc 
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    Status: Physician
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    Joined: 01/15/2017

    Don’t let tail wag the dog.  Plus you have a baby in the oven — and that has the potential to change things A LOT.   You have to factor in those intangibles (commute, time with expanding family, and each job happiness) and weigh into the financials.

    For Primary Care –  public vs private is not so much a differential so the math is a lot closer with PSLF on your terms and current interest rates.  In specialty care; the gap is much wider and changes are with 4 years left, you probably can crush out the debt with more certainty — run the numbers and factor in those intangibles.

    I have several colleagues in the same boat as you, but in Primary Care, they are holding the course and double checking with admin yearly to get their confirmation letters and being diligent on ALL the crazy PSLF rules (and there are a lot!).

    One definite advice: don’t count on campaign promises.

    #244205 Reply
    Liked by Jack_Sparrow
    Avatar Nysoz 
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    Status: Physician
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    Joined: 10/23/2017
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    How many people do you know who knew about PSLF in 2009? Keep in mind WCI was launched in 2011 (and nobody was reading it for years after that) and most doctors who know about PSLF learned about it here. There is a PSLF doctor FB group which was polled and there was almost nobody in there who would be eligible before 2021-2022 or so.

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    I was in medical school during this time and remember one of the mandatory student loan lectures we had to go to mentioned it. Not sure if other schools did the same. To be fair, no one really knew what it meant so not many people (if any) understood the importance/implications of it at that time.

    #244222 Reply
    Avatar drmka26 
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    Status: Physician
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    Joined: 09/11/2018

    The president has the authority with the education secretary to write off the student debt. No congress bill/approval needed.

    Hard to keep politics out of it; Sanders and Warren both are for this. We gamble every day with stocks, investments, real estate etc. Its not crazy (IMO) to gamble on either of these politicians winning and wiping out student debt.

    #244244 Reply
    Avatar Peds 
    Moderator
    Status: Physician
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    Joined: 01/08/2016

    Wait you think the market is like gambling?……

    #244259 Reply
    Liked by Hank
    MPMD MPMD 
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    Joined: 05/01/2017

    The president has the authority with the education secretary to write off the student debt. No congress bill/approval needed.

     

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    Is that true?

     

    #244262 Reply
    Avatar StarTrekDoc 
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    Status: Physician
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    ‘Power of the purse string’ is Congress — but that may not be completely true as seen this year —-  SO, perhaps the Dept of Education could take $$$ earmarked for some other program and reassign it to all student loans in xxx program; eg PSLF –  and wipe it all out.   They do have 600+ million in TEPSLF already tagged and simply just give it out via Executive Order.

    #244342 Reply
    Avatar nephron 
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    I have no idea if it is true, but I do know that Elizabeth Warrens plan phases out high income earners so that most physicians will not be effected by whatever she decides to do.  I don’t know if there will be some way to sneak in and claim some degree of loan forgiveness while you are a resident, but I doubt it will effect anyone in medical school or residency right now.   That’s the problem with the candidates, they make pie in the sky promises to get elected not realizing, or maybe realizing and not caring, that some people are actually listening and maybe making financial decisions based on them.  Why not borrow an extra thousand or two dollars to go on vacation during your spring break if there is some chance that it will be “forgiven”.   Maybe it will, but my sense of the politics of it all is that once people who have already paid off their loans, decreased their borrowing, budgeted, didn’t go to school because it was too expensive, etc get wind that the people who have not are getting their loans forgiven, there will be such a backlash that it will never pass/be implemented.   It just seems inherently unfair.   When articles pop up in my facebook feed about how people need to have their loans forgiven, there are are usually a bunch of comments from people who realize how unfair it would be.   I suspect that these people would get louder if anything ever got implemented.  At least with pslf, there is some argument of societal benefit/payment for those getting their loans forgiven. Who knows though, certainly not anything that I would think anyone should plan ahead for.  I would just refinance and assume that you will be responsible for the loans that you took out.

    #244347 Reply
    MPMD MPMD 
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    That’s the problem with the candidates, they make pie in the sky promises to get elected not realizing, or maybe realizing and not caring, that some people are actually listening and maybe making financial decisions based on them.  Why not borrow an extra thousand or two dollars to go on vacation during your spring break if there is some chance that it will be “forgiven”.

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    I think you would be hard pressed to prove that is happening frequently outside of the minds of people hostile to these kinds of policy ideas.

    For every person doing this I’m going to guess there are 50-100 people working hard and genuinely struggling.

    Literally every resident I’ve spoken to about student loans is worried and trying to figure out the best plan. I have never met one who is playing the long con to soak the Dept of Ed for their Euro vacation. I supposed maybe I’m being naive but I really doubt it.

    #244353 Reply
    Avatar nephron 
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    Status: Physician
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    That’s the problem with the candidates, they make pie in the sky promises to get elected not realizing, or maybe realizing and not caring, that some people are actually listening and maybe making financial decisions based on them.  Why not borrow an extra thousand or two dollars to go on vacation during your spring break if there is some chance that it will be “forgiven”.

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    I think you would be hard pressed to prove that is happening frequently outside of the minds of people hostile to these kinds of policy ideas.

    For every person doing this I’m going to guess there are 50-100 people working hard and genuinely struggling.

    Literally every resident I’ve spoken to about student loans is worried and trying to figure out the best plan. I have never met one who is playing the long con to soak the Dept of Ed for their Euro vacation. I supposed maybe I’m being naive but I really doubt it.

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    If you go to any college spring break site- cancun, Florida, wherever these people are going these days- and survey how many of them have some amount in student loans, I would wager that a majority of those students have some amount in student loans.   Maybe their parents put their spring break on their credit cards, but the way that i see it, any amount that they are spending there is an amount that they could have borrowed less from the government.  If those students who decided to go to Disney while borrowing money for their education get their student loans forgiven while their roommates who stayed home to work a second job do not, I would anticipate push back from the roommates who budgeted and paid off their loans in a more timely manner.   That’s the problem with student loans, you can always choose to borrow more to make ends meet while in school, or you can choose to borrow less if you choose to spend less.    At least that’s how it was way back when I was in school.

    #244364 Reply
    Avatar drmka26 
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    Status: Physician
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    It’s “not fair,” if student debt is forgiven? Of course it isn’t, especially in this crowd who advises about being frugal and responsible and pay it off before buying a house, car etc. Great advise, don’t get me wrong, but what in politics (AND in life in general) is anything fair ?
    How is it fair that Apple, Google, Microsoft, Trump etc etc make millions (?billions) and don’t pay any net taxes while we pay ~40% as physicians ?

    And really? You’re going to demonize students for taking a vacation for spring break? Some of you have forgotten the stresses of undergrad/premed and medical school. This is why there is such a high rate of burnout, depression and suicides among physicians.

    #244380 Reply
    Avatar jacoavlu 
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    Status: Physician, Small Business Owner
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    Joined: 03/01/2018

    Lately all these PSLF threads devolve to the same debate.

    Seems like the OP got the opinions they were looking for

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #244387 Reply

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