Practices paying back loans?

[TulipsAndSunscreen]

On a blog I read, one poster wrote this:

"And as far as the money goes, I am staying home now and we just got the notice today that we have to start paying our loans back. There are options though. We are choosing to go into economic hardship which is what I think most people do because there is no way that you can afford those payments on a resident's salary alone. This means we aren't paying anything now but the loans are accumulating more and more interest that we will have to pay back. And although this seems scary to keep accumulating debt, many practices and jobs offer loan repayment as part of a signing bonus. And if you don't have loans to pay off, then you lose this money."

Is that true that a lot of practices pay back your loans? Or is that limited to a small number of specialties? I'm thinking that this poster must be thinking of a very specific specialty or a few practices. If this were the case, wouldn't people be less stressed about medical debt?

You're right. Yes, it's true, it can happen. But it's not common (I think I know one person???), and I'm sure it's more common in certain specialties, as well as rural jobs.

[oceanchild]

Yeah, I think counting on repayment would be a mistake.

When I worked at the State Dept, they had loan repayment available, but only for certain positions - obscure language qualifications, very narrow skill sets, etc. I assume it's similar in medicine.

[MarissaNicole]

I agree - I'm not sure it is all that likely.

But you can defer for three years during residency and interest WILL NOT accrue.... after that you can continue to forbear (during the length of residency) but the interest still accrues. (And I may have used the terms forbear and defer backwards... I often get them mixed up, but the part about interest is correct)

[oceanchild]

I'm almost certain that you can no longer defer through residency. You have to forebear, and you will accrue interest.

That changed about a year ago.

[medpedspouse]

If you are in Family Med, I know several rural hospital districts that will pay back your loans for a set amount of "servitude" - DH grew up in one of these such towns. The hospital district offered to pay back our loans for a 5 (or was it 10?)year commitment - I think - it was many years ago.

We turned down the offer because #1, there were no job (much less career) opportunities for me, #2 - even with loan repayment, DH was better off on his own financial-wise (since DH decided to subspecialize) and #3 - I could not have survived living in that type of town...neither could DH - and he grew up there!!

The hospital administartor still woos DH and I each time we are home for holidays. I guess he knows his current staff will be leaving him since they always leave once their commitments are up.

[Flynn]

From our experience it doesn't happen very often. We don't know anyone who has had this happen. I'm wondering if the more you specialize the less likely this is to happen?

Just a thought.

Rule of thumb in medicine: NEVER count on anything except the life being unpredictable.

[Cumberland]

DH is getting lots of job flyers in the mail that mentions loan repayment. I think there is another OB spouse on here whose husband is joining a practice with loan repayment.

[MarissaNicole]

I'm almost certain that you can no longer defer through residency. You have to forebear, and you will accrue interest.

That changed about a year ago.

You are correct - I forgot, you can only do economic hardship deferment for 3 years (which has limitations based on your income), then after that you have to forbear.

I think you used to be able to do economic hardship indefinitely, but now you have to forbear after 3 years

[MrsK]

I agree - I'm not sure it is all that likely.

But you can defer for three years during residency and interest WILL NOT accrue.... after that you can continue to forbear (during the length of residency) but the interest still accrues. (And I may have used the terms forbear and defer backwards... I often get them mixed up, but the part about interest is correct)

I think you may have the terms defer and forbear confused. Defer means that the borrower postpones payments. Forbear generally means that the lender postpones collections.

[Vishenka69]

We know two people who got some money toward loan repayment (not all just some). One has to work in underprivileged area for a certain amount of years (I believe 5) and another is stuck in a 3 year contract in the middle of nowhere CO. One is in anesthesia and the other in OB. Good jobs in desirable areas will not offer loan repayment as part of the package. I wouldn't plan on getting a dream job that also repays loans.

DH's loans are through Sallie Mae and we chose an option where we paid the bare minimum (I believe around $200) during his residency and then our payments were bumped up.

My husband has been looking for jobs out of curiosity more than anything. Most of the ones that pay off your student loans are in the under served, rural areas. It is nothing you can depend on unless you already have the job offer.

[madeintaiwan]

I think you may have the terms defer and forbear confused. Defer means that the borrower postpones payments. Forbear generally means that the lender postpones collections.

Marissa is correct. During deferment interest does not accrue. Interest does accrue during forbearance and if you don't make any payments on the interest during the duration of the granted forbearance, at the end of the forbearance the accrued interest will capitalize and be added to your balance and your monthly payments will increase accordingly.

I wouldn't plan on getting a dream job that also repays loans.

Unless, of course, your dream job is in a rural area that is in need of a physician. Then you might just be in luck!

Another factor that makes it less common is that the more subspecialized you get, the less available are the rural / underserved population jobs. If you need to be at a major academic center to do your job, no one is going to pay back your loans.

[houseelf]

If you are in a subspecialty that is hard to fill, there are positions that offer partial student loan payments and/or financial subsidies during fellowship.

Unless the doc is interested in one of those rare subspecialties or willing to work in an underserved area, it would be unwise to count on these sort of benefits.

Kelly