Student Loans

Joe Matelich, MBA Financial Advisor Introduction Joe Matelich, MBA Financial Advisor

Overview Public loan repayment programs Private loans Q & A Public Service Loan Forgiveness National & State Health Service Corps FAQs Implementation advice

Take-aways http://lmgtfy.com/?q=White+Coat+Investor+Student+Loans “The summer home I’ll never get to visit” - Joseph Chiweshe, MD

Income Driven Repayment Plans Standard Graduated Income Based Repayment (IBR) Pay As You Earn (PAYE) Revised Pay As You Earn (REPAYE) Income Contingent Repayment (ICR) Standard Graduated Income Based Repayment (IBR) Pay As You Earn (PAYE) Revised Pay As You Earn (REPAYE) Income Contingent Repayment (ICR) Standard Graduated Income Driven Repayment Plans

Disclaimer: high-level only

Income Based Repayment (IBR) 2009 15% 2014 10% http://lmgtfy.com/?q=White+Coat+Investor+Income+Based+Repayment

Pay As You Earn (PAYE) 2012 10% Oct. 1, 2007 http://lmgtfy.com/?q=White+Coat+Investor+Pay+As+You+Earn

Revised Pay As You Earn (REPAYE) 2015 10% 50% http://lmgtfy.com/?q=White+Coat+Investor+Revised+Pay+As+You+Earn

Standard Payment 10 Years Least Expensive (if no forgivenes)

Public Loan Examples - Single new-intern, internal medicine, single, no kids, $243,000 debt new-intern, plastic surgery, single, no kids, $300,000 debt

Public Loan Examples - Married new-intern, family medicine, married, 1 kid, $86,000 debt new-intern, psychiatry, married, no kids, $138,000 debt, husband $20,000/ year

Public Loan Examples – Married (cont.) new-intern, anesthesia, married, 2 kids, $200,000 debt, husband $30,000/ year new-interns, surgery & internal med, married, no kids, $526,000 debt

Rules of Thumb IBR -> switch PAYE -> switch REPAYE -> switch ? Spouse makes over ~$60,000 You make over ~$300,000 You have over ~$300,000 in debt Private Loans -> refinance

Private Loans Banks, Sallie Mae, etc. High interest rate Loan forgiveness rare http://lmgtfy.com/?q=White+Coat+Investor+Private+Loans

Refinancing Loans Now Again post residency/ fellowship Pitfalls Private Loans Public Loans (w/o forgiveness) Now Again post residency/ fellowship Pitfalls New terms Variable vs. fixed rate Co-signer Only after residency Only w/o forgiveness option Pitfalls Cannot re-enter IDR No Loan forgiveness Death & Disability http://lmgtfy.com/?q=White+Coat+Investor+Refinance+Student+Loans

Source: https://whitecoatinvestor

Loan Refinancing Companies 1) Sofi – as low as 2.355%* 2) Credible – as low as 2.34%* 3) Common Bond – as low as 2.35%* 4) LendKey– as low as 2.21%* 5) Earnest– as low as 2.40%* 6) LinkCapital– as low as 2.94%* 7) Darien Rowayton Bank – as low as 2.94%* http://lmgtfy.com/?q=White+Coat+Investor+Refinance+Student+Loans * as of 2/7/17

Private Loan Examples

Q & A From Part 1

Part 2 Public loan repayment programs Private loans Q & A Public Service Loan Forgiveness National & State Health Service Corps FAQs Implementation advice

Forgiveness Programs Public Service Loan Forgiveness (PSLF) National Health Service Corps (NHSC) State Health Service Corps (SHSC) http://lmgtfy.com/?q=White+Coat+Investor+Loan+Forgiveness

PSLF 10 Years 501c(3) Remaining federal loan $debt http://lmgtfy.com/?q=White+Coat+Investor+Public+Service+Loan+Forgiveness

Will PSLF be around in 10 years? Cannot predict what Congress will do Save up $ in a side investment account Grandfathering 1987, 1993, 2014 (PAYE) REPAYE is encouraging Married filing separately Removes the cap Current court case January, 2017 http://lmgtfy.com/?q=White+Coat+Investor+Student+Loans+and+PSLF

NHSC 2 Years Qualifying institution 2 x $25,000 (HPSA scores) http://lmgtfy.com/?q=White+Coat+Investor+National+Health+Service+Corps

SHSC ~2 Years Qualifying institution Megan’s experience CO = 3 x $30,000 WA = 2 x $17,500 MT = up to $100,000 over 5 years PA = 2 x $50,000 Qualifying institution Megan’s experience

Q & A From Part 2

Part 3 Public loan repayment programs Private loans Q & A Public Service Loan Forgiveness National & State Health Service Corps FAQs Implementation advice

Frequently Asked Questions (FAQs) Married-filing-separately “loophole” switch from REPAYE to PAYE & file taxes separate Tax consequences REPAYE doesn’t have the 10 year, standard payment cap Switch to PAYE at end of residency / fellowship (partial financial hardship) Consolidation of loans resets 10-year clock for PSLF Is loan forgiveness taxable? PSLF -> NO NHSC & SHSC -> NO 20 or 25 year -> YES

Implementation Advice Preface Jan 16, 2017 https://www.youtube.com/watch?v=v- DqzmwBDjk&feature=youtu.be&t=23m56s

Video Recap Get rid early in career Resident -> REPAYE (50% subsidy) Post-residency 501c(3) -> PSLF with min. payments Tax-free forgiveness Live like a resident (2-5 years) -> pay off after refinancing I favor the “scorched earth, gazelle intensity” approach to the “20-30 year payment plan” approach. – Jim Dalhe, MD

Q & A