By Dr. James M. Dahle, WCI Founder
If your career goals entail working for a qualifying employer (military, VA, academia, CHC, direct employment by a non-profit hospital) and you made a significant number of IDR payments during your training, PSLF is pretty much a no-brainer for anyone with a large number of student loans.
However, if you are only considering working for a qualifying employer due to the possibility of PSLF, then you need to compare the salaries. If the after-tax salary from the non-qualifying job is GREATER than the after-tax salary from the qualifying job PLUS the amount of potential forgiveness under PSLF divided by the number of years you must work at that job to get PSLF, THEN you should simply go work at the for-profit job, refinance your loans, and pay them off in 2-5 years by living like a resident. If that is not the case and you don't mind working for a qualifying employer, then you should take the qualifying job. Many times, the salary at a non-profit isn't even less than that at a for-profit job (though most of the time, it is).
Should You Go for PSLF as an Attending?
As a general rule, the real secret to having a ton of money forgiven via Public Service Loan Forgiveness (PSLF) is to make a ton of tiny Income-Driven Repayment payments during a long residency/fellowship training period. At the median physician income ($275,000) and the median physician debt load ($200,000), it is probably still good advice to not go for PSLF if you made the mistake of deferring your student loans during residency.
However, if you actually run the numbers, you will see that at the higher debt to income ratios, that advice does not hold at all. I went through the trouble of actually running the numbers a few years ago, and after a couple of hours with a spreadsheet, I think I am now in a position to provide some better direction for those of you who deferred in training.
The bottom line is that every doctor needs to run this calculation for themselves. There are a lot of variables, so there will always be at least a little bit of guesswork. There is also the risk that the programs (IDR forgiveness and PSLF) will be modified (which is what happened in October 2021 when the Department of Education said any payments you made in the past via the FFEL program will count toward PSLF if AND ONLY IF you consolidate your loans by Halloween 2022). The programs could also be means-tested or eliminated without grandfathering provisions.
Otherwise, here are the general rules for IDR forgiveness and PSLF:
- If you can qualify for PSLF by working at a 501(c)(3), you should go for it.
- If you have a large student loan burden (debt-to-income (DTI) ratio of 1.5+) and you are not an incredibly highly paid specialist, you should give very serious consideration (i.e. make some careful calculations using reasonable assumptions) to making PAYE payments for 20 years (or even REPAYE payments for 25 years). But realize that you are swapping lower loan payments for a high tax bill balloon payment, so be sure to include that in your calculations. If your DTI ratio is terrible (2.5+), then you should definitely look into IDR forgiveness.
If you are relatively average (or better) in loan burden and salary, then refinance your loans upon residency graduation and live like a resident until they're gone.
PSLF for Doctors Who Deferred in Residency
What should docs who deferred their student loans in residency do? Should they go for PSLF, or should they refinance and get busy paying them off? Well, if they're working for a qualifying employer, have a moderate DTI ratio (1X+), and run the numbers carefully, they will likely find that they should still go for PSLF.
Before we get into the spreadsheet, let's talk about the assumptions that went into it.
- The X-axis is Direct Student Loan Amount upon entering into the program. If the loans aren't DIRECT federal student loans, they don't qualify for PSLF. You might as well refinance those medical school loans and get busy paying them.
- The Y-axis is your adjusted gross income. That's line 7 on the new 1040. It is NOT your gross salary or your total income. What deductions live between your gross income and your adjusted gross income? The main ones for docs are retirement account contributions, HSA contributions, and health insurance premiums. So maxing those things out can reduce your adjusted gross income, reduce your required IDR payments, and increase the amount forgiven via PSLF.
- In my example, I used an average student loan interest rate of 7%. I also assumed the doctor's income remained steady over the 10-year period. I used a married couple with two kids (i.e. a family of 4). If you don't like my assumptions, use your own.
- I used REPAYE as my IDR. It is the most common program used because of the interest rate subsidy it provides. However, it has a big disadvantage compared to IBR and PAYE—the payments aren't capped at the 10-year standard repayment amount. So at a low DTI ratio, you could pay less and get more forgiven if you enroll in PAYE instead. PAYE often results in a larger amount forgiven, but that is simply because there is no interest rate subsidy which really doesn't matter for those who actually get PSLF.
- The usual caveats for PSLF apply: it exists at the whims of Congress. In the past, both political parties have made proposals to limit it enough that it would become useless for most docs, but those currently in the program would likely be grandfathered in to any changes. You should also keep careful records of your annual employer certifications and every single qualifying payment, and you should build a PSLF Side Fund just in case.
- The IDR programs have their own forgiveness feature that does not require full-time or nonprofit work. However, that forgiveness is taxable and requires 20-25 years of payments, making it much less attractive except at high DTI ratios (1.5-2.5+).
- Remember how your monthly payments are calculated under REPAYE. You subtract 150% of the poverty line in your area from your adjusted gross income and divide by 12. If that payment does not cover all of the interest that accrued that month ($1,000/month for a 6% $200,000 loan), then half of the remaining interest is forgiven each month.
Let's start at the extremes. Starting in the upper left corner, we see someone with an AGI of $25,000 and a student loan burden of $25,000. After 10 years of payments, that person would have $34,000 left on their loans. That means they weren't even covering the interest on their payments, and despite the REPAYE subsidy, the loans still grew by $9,000 over those ten years.
Moving to the upper right corner, we see someone with an income of $25,000 and a loan burden of $600,000. Did I mention we're talking about extremes here? This person will make tiny little payments for a decade (actually the payments will all be $0) and then have $810,000 forgiven tax-free. Pretty nice benefit for working for a non-profit. It basically quadrupled your income.
In the lower left corner, we see someone with an income of $600,000 and a debt of $25,000. This debt will be paid off long before 10 years under REPAYE and in exactly 10 years in PAYE and IBR, so there will be nothing left to forgive.
The final extreme, the lower right corner, is where things get interesting. This is a doctor with an income of $600,000 and a debt burden of $600,000. If you run the numbers, this doctor will pay $4,693/month for 10 years, a total of $559,000 and THEN have the remaining $401,000 forgiven. Not too bad for a DTI that isn't even particularly high (1X).
Color Codes
As you move around the chart, you will see that I have color-coded it into four colors.
Dark Blue
You will see that no forgiveness is possible. If you are in this area, you might as well refinance and get a better interest rate to help you pay off your loans faster.
Grey
In the grey area, it is technically possible for you to receive forgiveness, but I don't think it's worth the hassle. You're still going to pay off most of your loans and the amount you're going to have forgiven is less than 1/4 of your annual salary. For example, consider someone with an AGI of $300,000 and a loan burden of $200,000. You could technically get $65,000 forgiven. But that's really only $6,500 per year, about 2% of your income. And you already paid $258,000 toward your loans! You could probably pay less interest overall by just refinancing, lowering your interest rate by a couple of points, and paying that loan off quickly. I don't think that's enough money to be worth the pain of dealing with Fedloans for 10 years, keeping track of all your payments and certifications, and trying to get the government to do what it agreed to do.
Light Blue
The light blue area is where PSLF is a no-brainer. These folks are going to have MORE forgiven than they borrowed. It doesn't matter so much if they're in PAYE or REPAYE, file MFJ or MFS, or contribute to Roth or tax-deferred accounts. Getting this PSLF is a critical part of their financial plan. Consider a pediatrician making $150,000 with $600,000 in student loans. This doc makes payments of $943 a month for 10 years, a total of $109,000, and then has $755,000 forgiven. Basically, PSLF wiped out 5/6ths of her $600,000 loan.
Light Green
The light green zone is an area where people also probably want to go for PSLF, although their payments will cover more than their interest and they won't receive any REPAYE subsidy. Using all the tricks (PAYE + MFS and maxing out tax-deferred accounts) to get that AGI down can really make a difference here in how much is left to be forgiven.
What surprised me when I ran these numbers was that this light green zone lives in the 1X debt-to-income ratio. For some reason, I thought when I had run the numbers in the past that it lived at a much higher DTI ratio. Consider a doc who makes $300,000 and owes $300,000. This doctor will make payments of $2,193 for a total of $259,000 and then have $229,000 forgiven. That's like getting a raise of $23,000 a year, about 10% after taxes.
I chopped the chart down a bit to demonstrate the range of typical physician incomes ($150,000-$400,000) and debt burdens ($100,000-$400,000). Again, you can click on it to make it bigger.
As you can see, the biggest swath is in the light green zone. There are lots of doctors who, despite making a terrible error by deferring their student loans during residency, should still go for PSLF if they want to work at a 501(c)(3).
Bottom line? From now on, I'm going to have to say you should run the numbers when it comes to deciding if you should go for PSLF or not. If you need help running the numbers, contact Andrew at StudentLoanAdvice.com. However, if you're in the dark blue or grey zone, check out the rates and cashback you can get by refinancing through the links in this chart:
† Bonus includes cash rebates and value of free course. Borrowers who refinance more than $60,000 in student loans using the WCI links will be enrolled in The White Coat Investor’s flagship course, Fire Your Financial Advisor for free ($799 value). Borrowers will still receive the amazing cash rebates that WCI has negotiated with each lender. Offer valid for loan applications submitted from May 1, 2021 through March 15, 2024. Free course must be claimed within 90 days of loan disbursement. To claim free course enrollment, visit https://www.whitecoatinvestor.com/RefiBonus.
Student Loan Refinancing Disclosures
What do you think? Did you defer in residency? Are you going for PSLF? Where do you find yourself on the chart above? Comment below!
[This updated post was originally published in 2019.]
We had a combined student loan burden of 260k. We paid it off before our family income ever broke 200k. Almost exactly 2 years out of residency. Because of this we did not save enough for retirement during those years.
If I could fire up the flux capacitor and go back and change things I now see that I should have put more towards retirement and let the loans linger another few months to a year. I could not imagine dragging them out for 10 years.
You did a great job with the numbers but I think the behavioral aspect is equally important. The way I did it does not make sense by the numbers but I set myself up at a more reasonable lifestyle because I was dealing with the loans.
However that is hard to show on a chart.
Keep up the good work!
This is a great analysis. I had run several excel numbers based on my personal loan burden and anticipated salary, and PSLF looks pretty darn good with a 1.3 DTI ratio, especially given that I started getting PSLF qualifying payments in June 2016 when I started intern orientation.
After graduating a 3 year program with 37 qualifying payments and looking at an academic primary care level salary… the numbers make too much sense to bail out now.
Nothing is guaranteed including PSLF – would not seek a position you otherwise wouldn’t simply to satisfy PSLF.
Taking a pay cut or lower paying job for hopes of a government handout – not the winning strategy I operate under
JustSayin
200k in loans – finished residency in 2009- deferred
Navient shenanigans put me in plan that wasn’t PSLF worthy
Would have been in first wave of qualifying for PSLF
Ended up consolidating with SoFi – thanks WCI for link- a few years back to save 0.75% (now under 3% for 5 year plan)
Current administration isn’t favorable to lawsuits on PSLF is what I’m told – doubt will be awarded class status
Paid minimum and invested heavily in real estate in Boston
Wish I would have spent less time worrying throughout the years – its been a great ride
JustSayin
I’m struggling with the decision to refinance or not. I’m in my 4th and final year of anesthesia residency, and am applying for a pain fellowship. Will have approximately $260,000 of loans eligible for PSLF by the time I’ve graduated. I’ve been on the REPAYE plan for the past 4 years and if I complete fellowship will have completed 5 years of eligible payments. I’ve been wanting to keep the option open for PSLF but I’m realizing that unless I want to do academic medicine, there won’t be many options for PSLF since most anesthesia and pain groups are not hospital employed / 501c3. Live in an expensive city and am struggling to make the REPAY eligible payments for non-working spouse and child. Temped to do So-Fi to make the $100 a month payments until I’m out of training. Curious for some opinions here…
My first attending job is paying off 90% of my slightly
below average (~200k) med school loans over a few years.
The national loan repayment programs usually only give you 25k or so a year but I found a great program that forgives much more than that a year.
My income is roughly average for primary care.
I can actually also refinance my loans too and I can get the remaining 10% forgiven if I serve a few more years.
Refinancing takes away government protections although it’s not a huge worry for most of us assuming tolerable debt levels. I’m in a desirable part of the US too. Rent is pricey but whereas my friends are staying in the city center for 3k a month I’m living on about half that in a quiet safe suburb.
What program are you in?
Did my comment get stuck in moderation? I posted 10 hours ago and it isn’t showing up.
Sorry, I was in the middle of a rapid in the Salmon River rather than huddled over my computer refreshing the spam and trash comment folders. 🙂
I think I’ve approved all of your comments now, if not, let me know. If you’re on the WCI Forum, there is a setting I can apply where your comments will never be held for moderation.
Super helpful post. I just shared it with our VP of our department who had never even heard of PSLF. I am employed at a large academic orthopaedic department (501c3) with ~65 surgical sub specialists many of whom are the right age to qualify for PSLF. I am the only who appears to be trying to achieve loan forgiveness, as I am one of sixty-five who is recertifying annually…. which is a remarkable piece of data. This seems to support your conclusion that the utility of PSLF phases out above $400k.
That said, I am currently in my second year of practice with an AGI quite a bit higher than $400k with about $260k of federal loans principle and interest and the math still works to keep going on PAYE. As a fresh PGY8 – I have made ~80 qualifying payments with ~40 remaining. I took bad advice to let my grace period go as long as possible before starting repayment as an intern and lost a few qualifying payments between residency and fellowship, fellowship and practice. Regardless, due to the system which is calculates payments based on your previous years taxes and an incomplete first year of attending earnings I am not looking at full freight payments until mid PGY8 or even PGY9 when I will revert to the 10 year repayment rate. I am of course hedging a bit as the program may evaporate, but due to a low debt to income ratio and a low cost of living city (not accidental) I was able to max my PSLF side fund equal to loan balance (cash / taxable equity funds) and max retirement in ~ 1 year. Based on this experience and the math, my little brother who is currently an EM PGY2 on REPAYE is planning on switching to PAYE immediately prior to graduation.
I’m also struggling with the decision to refinance or not. I’m a PGY-4 and in my first year as a child and adolescent psychiatry fellow (fast-tracked). I started my PSLF qualifying payments immediately when I started intern year and will have 60 qualifying payments through the PAYE plan when I finish fellowship. I will have approximately $300,000 of loans eligible for PSLF by the time I finish training. My spouse makes about $150k.
I’ve also been wanting to keep the option open for PSLF but struggle with a lower-paying academic/county/VA/501c3 job that pays around $200-250k in my area versus higher-paying group practices offering salaries of $300-350k. From the charts above, it looks as though the difference in income is in the orange area, bordering on the yellow area. However, the assumption above is going through residency without having made any qualifying PSLF payments, which doesn’t apply to me.
My question is: If I’ve already made 5 years of qualifying payments by the time I finish training, should I go for the lower-paying, PSLF-qualifying job or should I go for the higher-paying private group practice option if the job satisfaction from both are likely equal?
Thanks!
For a $100K difference and only $300K in eligible loans, I’d take the higher paying job, live like a resident, and pay them off unless I really wanted to be an academic. Over 5 years, you make $500K more (maybe $350K more after tax) and get perhaps $200-250K worth of forgiveness. Plus after the loans are gone it’s all gravy. But if you want to be an academic….then of course get the PSLF.
Hi!
Same situation (child psych, fast track, 5 years of payments) but spouse does not work and have ~500k in loans and potential to earn 350k-500k in private practice. Def don’t want to be an academic. Does the higher debt make a difference? Should I refinance sooner if PSLF is less attractive? What about a combo 501c3 + private practice on the side?
Thanks
If you’ll get PSLF, you should go for PSLF. That means working full time for a 501(c)3 no matter what you do on the side.
$500K is a ton of loans, but it’s still very doable when you’re making $300K+. Throw $150K a year at them and they’re gone in 4 years.
This is a great analysis, however it kind of falls apart for those of us that have locked in IBR at a low (resident) income and plan to recertify all the way through to 10 years to keep on the IBR plan and cap at the 10y standard repayment. Is there any kind of table you can build for IBR using this same logic?
Ryan,
Why not enroll into PAYE instead of IBR? You’ll have lower payments while in residency and maximize your forgiveness. When you become attending you’ll likely run into the payment cap if your income is level or greater than your debt. But your payment will be capped at the 10yr standard payment even as your income increases.
Andrew StudentLoanAdvice
Uhhh…falls apart? That’s like saying “Your advice for residents falls apart because I’m a 65 year old retiring attending.” It just doesn’t apply in your situation.
Can I write an article and make a table for those who want to go for IBR forgiveness at 20 years? Sure. Have I done it yet? No, not yet. But I’ll put it on the to-do list. In the meantime, if you’re in this situation, I’d suggest contacting Andrew at StudentLoanAdvice.com for help running the numbers.
I never thought I’d do PSLF, but always kept it as an option. Figured I’d always do a PP job. Now I’m looking at, and about to accept a job that is employed by a 501c3 hospital. The pay is ~$650K W2 and my student loans are $405K. By the time I finish training (going back to fellowship next year) I will have completed 6 years-worth of miniscule payments equaling a total of a couple thousand dollars.
So I’ll have 1 more year of low payments during that first attending year and then 3 years at the 10 year standard plan. And should hit 120 payments at that point. It’s totally wild to me that this is even possible.
Enjoy it! Remember back to this every time you think the feds are giving out money that people don’t deserve. Sometimes that person might be you! It’s just hard to design these types of programs perfectly, so if you meet criteria, I don’t think you should feel guilty taking advantage.
I’m glad that I pay taxes for doctors to rack up a ton of debt, paid for at taxpayer expense- just to FIRE at 45 and cut their wives hair.
This is dystopian.
A life without work is immoral.
Interesting view on morality.
Bear in mind the one who cuts his wife’s hair paid off his own loans though. Not the same people.
Fair point, but the medical system- including medical school and doctors’ salaries are subsidized by society.
Society invests in training doctors. I see something fundamentally wrong with doctors leaving the profession at an early age to flip homes, become amateur hair stylists, etc.
I don’t think you owe society a thing for your medical school if you paid $40-70K in tuition a year for it. If you believe that there is significant subsidization at that price, I have a bridge to sell you. Those doctors who (like me) owed a legitimate debt to society for medically school definitely paid it.
Residency salaries mostly come from Medicare dollars, but again, it’s about $15 an hour. So if you really feel you owe society for that, go ahead and work until you’re 95 to pay it back. I don’t really believe anyone should have to do that.
Nobody should have to do a job they don’t want to do if they choose to do something else.
That said, I think medicine is wonderful and I’m still practicing despite the liability and the fact that I do not need the money at all. In fact, I’m likely losing money by practicing instead of doing something else that pays more. But that’s the same for you too. But I’m doing it because I choose to and I wouldn’t like it nearly as much if there were a society doctor police out there forcing me to do it.
Does this graph take into account the 3-6 years of lower income residency/fellowship salaries? I would think that because payments are lower for these years that it would (very) significantly affect the model.
P.S. Thanks for doing such amazing work! I follow all of your posts and its the only reason I have (any) financial literacy.
You don’t need a graph if you did that. It always works out.
Thanks for this article. I’ve got 230K of loans, and an AGI of about 230K between me and my wife. Total income 280K. I just graduated residency a few months ago and got 35 small payments. I’d love to pay them off quickly, but it makes too much sense to play the PSLF game. The irony is that if Biden gave me 50K off my loans I’d pay them off quickly and I’d end up paying the Department of Ed more!
You don’t mention your employer, but if PSLF eligible, that’s the best way to go, at least mathematically speaking.
GT,
Agree with WCI, unless you have a very lucrative private practice job you could take.
Andrew Student Loan Advice
If you fall into one of the green/”probably worth it” zones, this chart isn’t accounting for someone who started making PSLF payments in residency. It also does not account for 2+ years of COVID forbearance counting towards PSLF. So if both these situations apply to you, and you fall into the “probably worth it” zone you actually probably fall closer to or into the “no brainer” zone.
Agreed. The chart was made before COVID for sure and it’s always a no brainer for those who made payments throughout residency.
Hi, would appreciate you advice! Psychiatry PGY4.
– I have $340 in federal unsubsidized loans.
– Soon to finish residency, will have made 4 years of PSLF payments.
– I’m looking at private practice jobs that make in the $300,000-350,000 range. Vs. $250,000-300,000 for PSLF-qualifying.
Currently, I’d prefer to take a private practice job, refinance, and pay off the loans aggressively, but I’m nervous this might be an unwise financial decision. Taking a PSLF-qualifying job would be something I’d consider if it was the appropriate thing to do financially. Would it be ok either way? Thank you.
$340? Why not just pay them off today? 🙂
Seriously though, with $340K in loans it seems very unlikely to me that you would come out ahead in private practice if you are willing to take a PSLF qualifying jobs. But run the numbers. How many years until you get PSLF, how much less does the PSLF qualifying job pay, and add in something for the intangibles.
Edward,
Did a quick run of the numbers.
Private Refinance
Refinance 5 years @ 4%
monthly payments = $6,262
total paid = $375,697
PSLF (6 years)
monthly payments (average) = $1,534
total paid = $110,413
You’ll pay an additional 265k in student loans if you end up refinancing and not pursuing PSLF. If we pull out the taxes to show you the actual earnings difference (assuming 40% tax rate) of $441k. This means if over your first 5 years as an attending you make 100k more p/yr at a private practice job, you’d be slightly better off than taking the non-profit gig and pursuing PSLF. Basically is a wash unless the private practice job pay is more similar or only like 0-50k difference than non-profit. I haven’t accounted for retirement savings but this is another consideration you’ll want to factor in.
Andrew SLA
Thank you!
Wow Andrew! That was a really helpful breakdown. I’m in a somewhat similar position as Edward but I’m married to a very high income earner. We lose money each year by filing our taxes separately so it has complicated my decision. Perhaps you could chime in with a suggestion?
– My loan burden is 300K @ 6% of direct unsubsidized loan
– In July 2023 I’ll graduate a 4 year residency having make PSLF qualifying payments the whole time.
– Looking at jobs ~220k at non profits vs ~300k private
– Wife just started an attending position making 440k yearly
– Starting this year we will max 403b, and a 457b.
– If I do pursue PSLF I’ll make all my retirement contributions as pre-tax. If I choose to refinance I’ll do roth.
Is it absurd to go for PSLF and keep filing taxes MFS? Is the higher taxes of MFS worth the PSLF? Any guidance is greatly appreciated!
JP,
Private Refinance
Refinance 5 years @ 4%
monthly payments = $5,525
total paid = $331,497
PSLF Six Years
PAYE MFJ
Monthly payments 2023 (based on 2022 income) = $866
Monthly payments 2024 (based on 2023 income)=$2,332
Monthly payments 2025-2028 = $3,331 (capped due to the standard 10 yr repayment plan)
Total paid = $198,242
PAYE MFS
Monthly payments 2023 (based on 2022 income) = $324
Monthly payments 2024 (based on 2023 income)=$349
Monthly payments 2025,2026,2027,2028=$811,$1274,$1365,$1412
Total paid = $66,422 (this doesn’t incorporate any MFS penalty tax)
For simplicity, I’m not going to factor in penalty tax for MFS. The difference is $265k (331k-66k) and if we pull out taxes of 40% is 442k of gross savings to do PSLF. The amount you’d need to make at a private practice to come out financially ahead over PSLF is $75k or more per year. This looks like a wash based on the difference in pay for PSLF vs PP. However, those lower payments in IDR would free up your ability to save lots of money in your retirement accounts.
Andrew SLA
Hi Andrew, I noticed your clean calculations and I was wondering if you show me if I am being silly considering private practice in my situation
– I have $274k in federal unsubsidized loans @ 5.7%
– Soon to finish fellowship in June 2023, will have made 6 years of PSLF payments
– I’m looking at private practice jobs that make in the $400,000-450,000 range (reportedly increasing to 550,000-650,000 year 3) vs. 330,000 for PSLF-qualifying VA job.
I always thought I’d take a private practice job, refinance, and pay off the loans aggressively, but it sounds like the numbers will favor PSLF job…just by how much? The VA gives 40k x 5 years (apparently tax free) for loan repayment, which (assuming 40% tax bracket, live in CA) is like making 385,000k at least for 5 years but then salary drops to 330k after that vs keeping the higher PP pay (with higher workload)
I appreciate the help!
You’ll make enough that I don’t think you have to optimize that particular decision.
Touche, you’re probably right.
I have learned so much from your website and books over the years (thank you!) that I like to optimize these decisions but it’s probably going to be a wash. Going to sit down and weigh over the intangible parts (Much higher workload with much higher pay/partnership vs. pension VA/50% workload/etc)
Private practice is better for you. You will make enough so that you’ll be paying the standard 10 year payment plan of about 3K per month (https://studentloanhero.com/calculators/student-loan-revised-pay-as-you-earn-calculator/ ) and you’ll never qualify for PSLF bc you will have paid it off before you receive forgiveness (because of the 40K x 5 years). So basically, just compare 385K to the private practice pay.
And actually, you might not even get that last year of 40K b/c it will be almost paid off.
Actually, I was slightly off earlier. Your payment would be closer to 2K at the VA. So you’d probably get all 5 years of that 40K, but you’d still pay it off before PSLF forgiveness. So I’d just compare 385K vs private practice pay.
I don’t think that’s a given that private practice is better for him. It depends on how much more private practice pays him. He is only 4 years away from PSLF and one of those will be using a fellow salary to calculate payments. So he’ll absolutely have something left to have forgiven. But whether that “bonus” is enough to make up for a presumably lower salary in a PSLF qualifying job depends on the numbers.
MN,
For someone in your situation it is probably the right answer to private refinance, but this is best determined by going through the analysis that we complete as part of a consult. We could get down to the nitty gritty details of PSLF vs refinancing.
Andrew SLA
Hi Andrew and All,
I am a current PGY3 who will be graduating from IM residency (no fellowship) and am juggling whether it would be reasonable to consider an academic (PSLF) qualifying position as a hospitalist.
-will have 340k student loans at 6% interest
-due to COVID, 3 years qualified without any payments made (high COL area in residency)
-PSLF academic hospitalist jobs at 250k salary vs. community hospitalists at 320k
-am going to get married, partner who makes approx 150k next year
When I run the numbers, it seems reasonable to take an academics hospitalist position with married file separately but I’m not sure. Would you happen to have any guidance for me or other factors I should take into consideration? Thank you
I’m not sure I agree. With a $70K difference in salary and 7 more years required for PSLF, 7x$70K = $490K > $340K. But if you really want to run the numbers right, book an appointment at https://www.studentloanadvice.com.