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Newly married while on REPAYE

Home Student Loan Management Newly married while on REPAYE

  • Avatar mustard90 
    Participant
    Status: Resident
    Posts: 1
    Joined: 04/24/2019
    Earnest refinancing bonus

    I’m currently finishing PGY-2 with ~$190,000 in debt from medical school. I last re-certified in November 2018. Monthly payments are currently based on my 1/2 year salary as a PGY-1 ($85/month). I’m assuming these will be set to jump at the end of the year when i re-certify using 2018 tax returns (which will show just my income; single).

     

    I recently got married in January 2019. My spouse just got a job and will be making about $50,000. She has no student loans. My PGY3 salary is ~$62,000.  I have about 4 years left of training (3 resident + 1 fellowship).

     

    I plan on aggresively paying off my loans as an attending (higher paying specialty). I’ve been trying to figure out what my best option is now that I’m married as far as repayment (REPAYE vs PAYE vs private), how to file taxes next year, etc. Any advice would be greatly appreciated! I’m hoping to keep my monthly payments somewhat low during residency, without SUBSTANTIALLY hurting myself down the road. Thanks!

    #209567 Reply
    ChadCFP ChadCFP 
    Participant
    Status: Financial Advisor, Website Sponsor, Small Business Owner
    Posts: 75
    Joined: 10/04/2017

    Hey mustard90,

    The problem with all income-driven repayment (IDR) plans when your end goal is aggressive pay and not PSLF is that with each payment you have unpaid interest accruing, and at some point, you have to bite the bullet and pay back all the accrued interest.

    At this juncture, your goal should be to at least cover the interest due on a month to month basis (or as close as possible). If I assume a 7% rate on $190k, your monthly interest is close to $1,100/month. This would require you to make higher payments which in turn could lead to a “paid ahead” status and your payments will likely not qualify for the 120 PSLF count. However, if PSLF is not your goal that should be fine. But you need to know that because you would start to burn down the bridges behind you.

    While your post provided some details, there is a lot more that needs to go into the decision making process. It may be a good idea to get at least a one-time student loan analysis completed, here are a few resources for student loan advice from the White Coat Investor. 

    Chad Chubb, CFP ® | WealthKeel LLC
    https://wealthkeel.com/wci | Gen X & Gen Y Physicians

    #214769 Reply

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