1. Brandon Barfield Co-founder
Recruiting and retaining physicians using loan repayment and forgiveness programs
Brandon Barfield
Co-founder

2. Agenda Resident & Recruit Economics Public Service Loan Forgiveness
PSLF Case Study
Legislative concerns
Refinancing
Repayment Strategies Post-Training
Exit case studies
Salary Equivalent Demo
DWOQ resources and Q&A

3. Changes in Student Debt Levels
Debt levels have quadrupled
in the last 20 years
$300k
~$200k
~$89k
~$50k
1993
2000
2015

4. Repayment Options for Physicians
Most Housestaff need payment relief during training
Standard, Graduated or Extended Term
MOST COSTLY!
Only available during training
Forbearance / Deferment
Available with attractive underwriting profile
Common approach with for-profit employment
Refinancing
15% / 20% of discretionary income, 25 year taxable forgiveness
IBR / ICR
10% of discretionary income, 20 year taxable forgiveness
Only available if no loans outstanding on Oct 1, 2007
PAYE / New IBR
10% of discretionary income, 25 year taxable forgiveness (graduate level)
50% of accruing interest not charged, no borrowing restriction
REPAYE
Explain each in detail!

5. Liquidity during training Payments count toward PSLF
Resident Economics
Salary:
$ 55, $56, $58, $60,000
$200k @
5.88%
10-Year Standard Payment:
$2, = $26,500k annual = $106k over 4 years
Monthly Interest in Forbearance
$ = $11,760 annual = $47k in accrued interest
PAYE / REPAYE Payment:
$ $ $ $303
$19,500 in interest savings
Liquidity during training
Payments count toward PSLF

6. A Physician’s Fork In The Road
REFINANCING
Private Sector
High Household Income
Federal Benefits not Needed
FORGIVENESS
PSLF
Taxable Loan Forgiveness
Payment Relief in Training

7. What is Public Service Loan Forgiveness?
Eligible Loans:
Direct Stafford, Direct Grad PLUS, Direct Consolidation
FFEL, Perkins, HPSL and LDS can be consolidated for eligibility
Eligible Payments:
Borrower must use an IDR or standard 10 year payment plan
Make 120 on-time payments (10 year minimum)
Eligible Employment:
Borrower must be directly employed by a federal, state, or local government entity, or 501(c)3 non-profit
Employment contract must be full-time and 30hrs+ per week
Most residents are PSLF qualified during training

8. PSLF Case Study Profile: 2014 Graduate Debt - $200k Specialty – OBGYN
PSLF Eligible during training
Future expected income - $250k
Directly employed by a 501c3 hospital after training

9. Sample PSLF Case Study ($200k debt)

10. Proposed Changes, Trump and ED Expectations
Current Budget Proposal re-introduced by Trump / DeVos in February
Eliminating PSLF entirely
Consolidate to one IDR plan
12.5% payment
30 yr taxable forgiveness for grad students
Anyone who originated first loan before July 2019 will be grandfathered
Reauthorization of Higher Education Act: aka The Prosper Act
Direct Loan Program replaced by the First Loan Program
Consolidate to one 10 year plan and one IDR (15%) plan
No forgiveness, but interest costs cannot exceed those of the 10 year plan
No MFS option for couples

11. Refinancing Opportunity Considerations
Lending marketplace increasingly crowded and highly competitive
Rates typically lower than Federal rates, fixed as low as 3.5%
Payment terms from 5 to 20 years
For graduates with $75k or less in federal debt, IDR’s and PSLF holds little value
Transitioning residents with signed contract can apply 6-12 months prior to start date
Considerations
Loss of Federal benefits
Liquidity, can you afford the payments?
Fees may erode savings
Fixed vs. variable rate loan types
You CAN refinance an already refinanced loan

12. Recommended Refinancing Process
1. Identify if refinancing is suitable!
Debt-to-income ratio considered
No negative credit history, min 680 score
Adding co-signer can improve results
2. Review existing financial and credit profile to determine if refinancing is available
3. Approach marketplace
Work with an Advisor
Deferment/Low payments in residency available
Better rates available for shorter terms, but can you afford higher payment right after training?
4. Once terms and rates are quoted, select option in the context of your liquidity needs

13. Repayment Strategies Post-Training
The Fork In The Road
Specialty Trends
Impact of The Training Years
Salary Equivalent Analysis

14. “setting” may not qualify as Public Service
Impact of Specialty
Specialties with higher likelihood of for-profit employment after training:
Emergency Medicine
Anesthesia
Radiology
Paths with higher non-profit opportunity:
Family Medicine
Psychiatry
Pediatrics
Academic
Non-profit
“setting” may not qualify as Public Service

15. Exit Case Study: Forbearance During Training
After 3 years of training, a graduating resident contemplates the next step in her career. She forbeared her loans during training. Is PSLF still worth the effort? What are her options?
Original Debt: 7% / Debt after training: $361k / Salary $200k
Standard 10 Year payment: $4200 monthly and $506k total
Refinance: %: $3770 monthly and $452k total
$100k bonus ($70k after tax): $3,040 monthly and $365k total
PSLF: Max Payment = $1,870 monthly and $176k total

16. Exit Case Study: Forbearance During Training
After 3 years of training, a graduating resident contemplates the next step in her career. She forbeared her loans during training. Is PSLF still worth the effort? What are her options?
Original Debt: 6% / Debt after training: $177k / Salary $300k
Standard 10 Year payment: $1,967 monthly and $236k total
Refinance: %: $1,847 monthly and $222k total
$100k bonus, 5yr 3.5%: $1,947 monthly and $117k total
PSLF: Max Payment = $2,911 monthly and $235k total

17. Exit Case Study
After 4 years of training, a graduating resident contemplates the next step in her career. She used an IDR plan during training. How does loan forgiveness impact the economics of working for a non-profit?
Original Debt: $220,000 (7.09%)
Debt after training: $266,000 PAYE / $243,000 REPAYE
Non-profit salary offer: $175,000
For-profit salary offer: $200,000
Discount rate = 5%
Tax rate = 25%
Residency starting salary = $50k increasing at 3%

18. Exit Case Study

19. Salary Equivalent
Annual economic benefit of PSLF

20. New Resource for PSLF Employers
PSLF Salary Boost & Refinancing Suitability Calculator
Preliminary calculator to identify is PSLF is worth discussing
The recruiter or the candidate can run basic PSLF projections in five minutes
If PSLF value isn’t there, refinancing (with or without bonus) likely warranted
Currently available to interested hospital partners at no fee
Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC

21. Resources for Your Organization
On-site training for recruitment, GME and support staff
Workshops for residents, fellows, and attendings
Resident / Intern orientation
Grand Rounds
Didactic Lectures
Transition To Practice and Practice Management Courses
Individual Counseling with Recruits or Housestaff
Office Hours
Comprehensive loan consultations (web-based or on-site)
Dedicated and branded registration page
Hospital-branded summaries sent to you or the physician
Clear cost projections you can use to help craft your offer
Direct Payment Assistance
Cover the IDR payments for recruits or current staff

22. DWOQ Services for Borrowers
FREE Refinancing Suitability Analysis, Lender Introduction and Support
Individual Loan Consultations with Annual Support
$295 then $60 quarterly ($495 / $75 for couples)
Complete review of federal and private loan portfolio
Annual repayment options overview, including Income-Driven options and loan forgiveness opportunities
Overview or completion of consolidation and repayment application
Review loans for refinancing opportunities
Develop strategy to allocate income towards savings, retirement, home purchase and income protection
Develop a timeline of action items
Ongoing access to a DWOQ advisor

23. Sample Analytics

24. Doctors Without Quarters
Wishing You The Best of Luck With Your Career in Medicine
Doctors Without Quarters
“Till debt do us part”
Brandon Barfield
www. DWOQ.com