loannightmares
New Member
- Joined
- Dec 17, 2019
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Hi, all. I have a pretty complicated/extreme loan situation... I'm considering speaking to a student loan payment plan expert, but I'm wondering whether anyone who has a good grasp on the system could help me out here in the meantime. Here goes:
My student loan debt is $420,000, all federal loans. Interest rate is 6.5%. I'm currently a resident making $56k per year. In 1.5 years I’ll graduate and hopefully earn about $260-300k per year, gross income. I'm married, filing jointly; spouse will likely make $30-50k/year for the foreseeable future, but right now their income is 0.
I’ve been on the PAYE plan since starting residency 2.5 years ago. Monthly payment is a little under $200 per month, somehow, which seems low to me... it’s about all I can afford right now though. Interest is accruing rapidly of course, and by the time I graduate residency in 1.5 years the loan total will be ~$462k.
My questions are...
1) Should I have gone for REPAYE from the beginning for the interest subsidy? The interest racking up is no joke.
2) I’ve read that once I start making an attending salary, the financial hardship disqualification will lead my interest to capitalize under PAYE, as I'll be moved out of PAYE and into another payment program. I've read that this means a specific amount will be added to the principle, and this will continue to accrue interest. How can I find out how much my loan amount will balloon to once that happens?
3) Can I save myself any money by switching to REPAYE *now* instead of in 1.5 years and taking the plan-switch capitalization hit now rather than later? Will the interest subsidy benefit offset the damage from the interest capitalization? I won't get switched out of the REPAYE plan when I start making an attending salary, correct?
My plan is to pay down loans extremely aggressively over about 5 years once I’m in practice (basically living off $50k per year (net) and putting a small amount toward retirement in order to make drastic monthly loan payments). I do know about PSLF but am worried it will be taken away... I’m only 2.5 years of payments in.
Thank you!
My student loan debt is $420,000, all federal loans. Interest rate is 6.5%. I'm currently a resident making $56k per year. In 1.5 years I’ll graduate and hopefully earn about $260-300k per year, gross income. I'm married, filing jointly; spouse will likely make $30-50k/year for the foreseeable future, but right now their income is 0.
I’ve been on the PAYE plan since starting residency 2.5 years ago. Monthly payment is a little under $200 per month, somehow, which seems low to me... it’s about all I can afford right now though. Interest is accruing rapidly of course, and by the time I graduate residency in 1.5 years the loan total will be ~$462k.
My questions are...
1) Should I have gone for REPAYE from the beginning for the interest subsidy? The interest racking up is no joke.
2) I’ve read that once I start making an attending salary, the financial hardship disqualification will lead my interest to capitalize under PAYE, as I'll be moved out of PAYE and into another payment program. I've read that this means a specific amount will be added to the principle, and this will continue to accrue interest. How can I find out how much my loan amount will balloon to once that happens?
3) Can I save myself any money by switching to REPAYE *now* instead of in 1.5 years and taking the plan-switch capitalization hit now rather than later? Will the interest subsidy benefit offset the damage from the interest capitalization? I won't get switched out of the REPAYE plan when I start making an attending salary, correct?
My plan is to pay down loans extremely aggressively over about 5 years once I’m in practice (basically living off $50k per year (net) and putting a small amount toward retirement in order to make drastic monthly loan payments). I do know about PSLF but am worried it will be taken away... I’m only 2.5 years of payments in.
Thank you!
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