Q1. I applied to DRB with my current income of $0 with current debt, I got denied. Should I have put my future PGY1 salary on my application?

A1. Yes, PGY 1 income.

Q2. Refinancing vs. Fed payment with PSLF? Since I am a single and have no desire to spend on unnecessary things during my residency training, currently, I don’t think I will need extra cash flow from refinancing/consolidating my loans. If I am left with only fed loan repayment options, you recommended RePAYE with PSLF, due to the fact gov. pays the interest subsidy.

A2. Yes, Repaye makes senses as long as you are not paying more than the monthly-accrued interest. Remember the interest subsidy is 50% of the difference between your monthly-accrued interest and your monthly Repaye payments. As your income grows, your mandatory Repaye payments will too grow, which will lead to a smaller absolute value of interest subsidy.

By the time you are able to make your Repaye payment greater than the monthly-accrued interest, there will no longer be any interest subsidy. So Repaye is truly designed for the high debt/income ratio folks (like us in PGYs’).

Q3. If I apply to PSLF with RePAYE, am I locked in myself to only applying to 501(c) job positions during my job hunting time?

A3. No, you apply to IDR and PSLF separately.

Residency counts towards the PSLF 120 payment requirement. When you finish training, you can choose any job you want. 

Although people who allow their debt to grow out of control tend to limit themselves to non-profit PSLF eligible jobs so that they can get their debt forgiven in 4.5 years (assuming they enrolled in PSLF right after the grace period, in mid PGY1). You also CAN choose the job you like the most even if it’s Not non-profit. At that point, you will know definitely that PSLF is not for you and you can refinance your loans ASAP to a much lower rate.

Q4. If my assumption is correct and if you can recommend just one of IDR options, would you still just recommend me to be on RePAYE without PSLF (since radiologists are mostly privately contracted) compared to others like IBR or PAYE plans?

A4. If you choose and IDR, definitely sign up for PSLF too, because that’s the only reason one will sign up for IDR rather than refinance. Signing up for PSLF doesn’t hurt you but can potentially get your debt forgiven if you fall in love with an academic or government job.

Q5. If my ultimate goal is to pay off loans within 8-10 yrs. starting this yr. as I will start internship in July, 2016 (6 yrs. being on one of IDR options and 2-4 yrs. paying off aggressively by switching to standard 10yrs repayment after I become an attending) for a current 228k loan, what is the most appropriate option for myself who is trying to pay off as quickly as I can without letting the interest building up for a long term?

A5. Great plan, you can definitely plan to pay off your loan within 2-4 years of finishing training. 

If that’s your plan, I really recommend refinancing now. Because that means you get the low interest locked in and can start aggressively paying your loan down during residency. Check out if your program offers moonlighting. some of my seniors make 90k/year with moonlighting, which means you can really pay the interest and pay some principle down each month, which put you in a much better position than letting your loan negatively amortize (balance grow larger and larger when you are paying just IDR (Repaye, Paye, IBR) minimums).
in the even that you are seriously paying down your debt, Repaye is Not good at all because it does NOT subsidize interest at all when you pay off the interest accrued each month. In other words, your interest rate will be 6.08% on all IDR including Repaye.
But DRB refi rate can probably get you 4.5-5.5 %. 

Q6. I do not want to pay the government more than I need to, but during my time in residency, I have no confidence to go with standard or graduated or extended graduated plans since my cost of living at Houston won’t be cheap (where my radiology training will be at next year).

A6. check for moonlighting opportunities in your program
-make projected income and budget to see how much you can realistically throw at your student loans
-you may be surprised, I threw $2000/mo. at my student loans during intern year at times.

Q7. Even if you are on one of the IDR plans, you can always pay more than your monthly payment to pay quicker, right?

A7. yes, but what sucks is the interest rate.

Q8. If I am willing to pay extra monthly on top of whichever one of the IDR plans requires me to pay during my next 6 yrs., isn’t IBR the best option for me during 6 yrs. where I can pay more monthly to get rid of interests hopefully during 6 yrs. compared to other PAYE or RePAYE?

A8. if you want to pay extra, the best plan is refi, because you will have a lower interest rate to start with. Potentially 4.5%… this rate does not change and is lower than fed rates by 1.5%. Whereas Repaye says it subsidize, but rate increases anytime you make a larger payment.

Q9. I will for sure also run for moonlight opportunity during my rads residency so I will likely use that into a loan payment as extra on top of monthly loan repayment trying to pay quicker.

A9. great if there’s extra income in rads, you are well set. 
If I were you, I’ll just refinance ASAP and get the lowest interest rate I can, and start paying down VERY aggressively.

Q10. Let’s say I am on one of the IDR plans. There is no limit or restriction on me if I will change from IDR to standard 10 yr. plan, correct?

A10. definitely no restriction going from anything to standard 10 year, currently no restriction changing between IDR either. But there may be restriction in the future to change from Repaye back to Paye/IBR. 


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