Anything you wish you knew before starting repayment?

[Cleave]

We're getting ready to make our first loan payment and we're choosing how best to set those up. Is there anything you wish you'd known before starting repayment? Mostly, I think we've thought it through pretty well, but I'd love to hear from more experienced members...just in case there's something we haven't thought of.

[OrionGrad]

We started making payments on our loans during PGY1, but then when life circumstances changed a few years later (we decided to have a baby) we entered forbearance. So I guess it's good to know that if you start repayment and then things change with your finances, you can always go backward. (Although obviously that's not ideal.)

[SoonerTexan]

We will be paying off the post 2011 loans first (when interest rates went up and we lost subsidization), but I'm still not totally clear on what all my forbearance, income based repayment options are yet. I'm going to get through Match first and then look at our options. Where we match will make a difference in what we do.

[ides]

Our plan of attack is paying the basic payment then once our emergency fund is established we will start aggressively paying down the loan from dhs medical school. We will probably pay off our house next then work on the large government student loan after that.

[Cleave]

I'm not sure what you mean. The interest rate is the interest rate, and you can't escape them, so I don't think there's anything else to know. That said, if someone has some advice I'll be interested in reading it!

Yes, we can't change the interest rate, but it feels like there are a half-dozen ways to repay. We've been looking at how much we can realistically pay each month and what the best options are in terms of IBR, 10-year, 25-year plans, etc. What's best for one family will be different from what's best for another, and we're the only people who can sort out what's best for our family, but I just wanted to be sure we weren't missing anything. (Like, "Well, most employers pay 75% of your loans as a bonus during the first year you work, so don't kill yourself making the max payment you possibly can in residency." Ah, my fantasy world is a lovely place to live...)

[diggitydot]

Anything you wish you knew before starting repayment?

My only plan of attack (for all debt) is to pay off the highest interest rate accounts first. Considering that our mortgages and most all student debt is ~3%, I'm paying other crap off first. We were able to eliminate two good sized accounts this year and get some savings built back up. As soon as all of the higher interest rate accounts are gone, I'll be applying what we were paying on them each month to the student debt to get it knocked down.

[diggitydot]

Like, "Well, most employers pay 75% of your loans as a bonus during the first year you work, so don't kill yourself making the max payment you possibly can in residency." Ah, my fantasy world is a lovely place to live...

Some employers will offer loan repayment, but like all things in medicine, it depends on location and specialty. I wouldn't kill myself to get loans paid off in full by the end of training unless there is a HUGE interest rate involved or very low student debt.

[Deebs]

You can change the interest rate in some cases. For some of our loans, allowing the lender to withdraw on a schedule gave us a drop anywhere from .5-1% on the rate.


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[TulipsAndSunscreen]

My only plan of attack (for all debt) is to pay off the highest interest rate accounts first. Considering that our mortgages and all student debt is ~3%, I'm paying other crap off first. We were able to eliminate two good sized accounts this year and get some savings built back up. As soon as all of the higher interest rate accounts are gone, I'll be applying what we were paying on them each month to the student debt to get it knocked down.

Jealous...our student loans are at 7%.

We get 0.25% off by doing online bill pay. Also, I think there's a max on what you can deduct each year from your taxes (depending on your income) so it may not pay off to pay a ton in bulk if you can't deduct it.

[diggitydot]

Jealous...our student loans are at 7%.

We get 0.25% off by doing online bill pay. Also, I think there's a max on what you can deduct each year from your taxes (depending on your income) so it may not pay off to pay a ton in bulk if you can't deduct it.

Just realized that we have one smaller private loan that is at 5%. The majority if our student debt is around 3%, though. I'm not complaining.

[SoonerTexan]

I believe we are at 8% for loans taken out for Years 3 & 4

[scrub-jay]

Pay as you earn is a form of the income-dependent plans, it's similar to IBR, but caps at 10% disposable income instead of the 15% IBR, IIRC. Under IBR and I think also PAYE, the government will pay the amount of interest that your payment doesn't cover on your subsidized loans only for the first 3 years. Of course, your payment is applied there first. Administrative forbearance is dependent on the servicer, but mandatory residency forbearance has to be granted if requested (make sure you fill out the paperwork for a residency forbearance so you don't exhaust the admin forbearance).

Everyone and their brother is applying for repayment plans right now because everyone's grace period is ending for Fed loans-- processing time is very delayed so you might have to do forbearance and then apply to avoid the standard payment which are often exorbitantly high for med students.

[Cleave]

Some employers will offer loan repayment, but like all things in medicine, it depends on location and specialty. I wouldn't kill myself to get loans paid off in full by the end of training unless there is a HUGE interest rate involved or very low student debt.

Not a chance we can pay it all off while in training. Would be awfully cool if we could tho.

[Vishenka69]

You most likely won't be eligible to deduct student loan interest after training.

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[spotty_dog]

You most likely won't be eligible to deduct student loan interest after training.

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The phase-out is at $155k AGI. I would guess that the average doc would be pretty close to that or under, especially if self-employed. (AGI is after deductions for health insurance, IRA contributions, etc.) However, the maximum benefit is a $2500 deduction, so for a family who qualified at the upper end, that'd be $625-700 less in taxes. Nice, but not necessarily worth paying a lot of years more interest just to get it.