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Is REPAYE or PAYE best for me?

Home Personal Finance and Budgeting Is REPAYE or PAYE best for me?

  • Avatar raddoc06 
    Participant
    Status: Resident
    Posts: 9
    Joined: 02/05/2019

    Current resident physician in year 4 of 6 of training. I recently got married on Jan 1st and my spouse makes low $70s and I made $77k last year. I owe $225,000 in student loans (no spousal loans) with unconsolidated interest rates 6.55% and 5.96% and am currently in PAYE. I have $17,000 in interest accrued currently. I am deciding whether to switch to REPAYE or refinance with Laurel Road (interest rate 5.17% fixed 7 years). What is the best option refinance vs REPAYE?

    #188388 Reply
    Avatar raddoc06 
    Participant
    Status: Resident
    Posts: 9
    Joined: 02/05/2019

    The question really is would it be better to refinance, REPAYE or stay in PAYE accounting for interest capitalization if I switch?

    #188405 Reply
    Avatar ID Doc 
    Participant
    Status: Physician
    Posts: 60
    Joined: 02/23/2017

    Are you going for PSLF? That’s a key question that will affect the answer. WCI just posted a great overview on this:¬†https://www.whitecoatinvestor.com/student-loan-management-when-both-spouses-work/

    Your scenario is likely most similar to “Doctor Married to an Engineer, Going for PSLF” or “Doctor Married to an Engineer, Not Going for PSLF” depending on your answer.

    If you want to run the numbers yourself, you can use the Federal Loan Repayment Estimator (https://studentloans.gov/myDirectLoan/repaymentEstimator.action), and you can use Turbotax to see the tax differences of Married Filing Separately vs Married Filing Jointly. This stuff can be confusing, though, so if you’re not confident after the above it’s worth paying a few hundred bucks to get student loan advice from someone who specializes in it (https://www.whitecoatinvestor.com/student-loan-advice/).

    #189172 Reply

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