To REPAYE or not to REPAYE; That is the Question.
Updated September, 2017
We at DWOQ understand that this evolving student loan marketplace often necessitates that busy medical trainees seek an Advisor to assist with the repayment process during training and as they transition to practice. The decisions you make today regarding your loans could no longer be relevant one, two, or more years down the road as your economic profile and legislation changes. Our advisory service is designed to work with you each year to make certain you’re maximizing your savings and allowing yourself access to your modest training income to get a head start on buying a home, saving for retirement, and starting a family. We work with you annually to run many scenarios and determine the best action plan year-to-year, as well as assist with developing a budget. To learn more about our advisory services or register for a consultation, please visit: http://www.dwoq.com/consultations.html
Lastly... as I’ve referenced in a few instances above, there are many cases where refinancing your federal student loans may make sense during training and even as a 2016 medical school graduate. If you’d like assistance with identifying the suitability of refinancing, assistance in selecting a lending partner, and general support throughout the process, you can register for FREE at http://www.dwoq.com/refinance-analysis.html
I hope you found this summary helpful. Let us know by dropping us a line anytime; we are here to serve as your advocate in an otherwise conflicted marketplace that currently underserves those who often need the most support and have little time to stay abreast of market changes.
Founder & Executive Director
Doctors Without Quarters, LLC
In increasing numbers each year into 2016, medical graduates have been using either the IBR or PAYE programs throughout training. The benefits of using these programs outweigh the cost of not paying anything through forbearance because interest subsidies are available, interest doesn’t capitalize for trainees with significant debtloads, and for the 90%+ of Housestaff who work for non-profit hospitals, their loans can be forgiven tax-free if they remain in a non-profit or Public Service setting for a total of 10 years while using one of these income-driven repayment (IDR) plans.
If any of the above sounds unfamiliar to you, I highly suggest you stop reading here and register for a consultation from our Advisory team.
Assuming all of what I’ve shared above does REsonate with you (Ok I’ll stop now), graduates as of 2016 have a new IDR to choose from called Revised Pay As You Earn (REPAYE). Unlike IBR and PAYE where eligibility is based on when you took out your loans and your federal loan debt-to-income ratio, REPAYE has no eligibility criteria. If this program makes financial sense, you can enter into it. So the question for young doctors with student loan debt becomes, DOES THIS PROGRAM MAKE SENSE FOR ME? My belief is that for many of you, it does… so let’s discuss the pros and cons:
Based on these cons, we can quickly eliminate borrowers for whom REPAYE does not make financial sense:
And those who SHOULD consider entering or switching into REPAYE:
Greetings to all within the DWOQ network, and thanks for tuning into another critical update on this complex and evolving student loan marketplace...
I wanted to take an opportunity to discuss a few RE’s REgarding current medical students or graduates now in training… namely, the REality that loan REpayment has REcently become moRE complex with REPAYE now available. This development may give REason for you to REevaluate your current strategy. As the title of this entry warrants, I’ll do my best to articulate as well as ShakespeaRE himself… though if you’RE checking for iambic pentameter, you’ll likely be disappointed…