PSLF – Why REPAYE May NOT be the Best Plan

Hi everyone, we are trying something new this week - the very first FPMD guest post on another physician-centric personal finance blog!  To read this week's post, be sure to check out my fellow resident money blogger Dr. Wise Money's site at http://drwisemoney.com/.  We will be talking about the new Revised Pay As You Earn (REPAYE) plan in the context of someone interested in Public Service Loan Forgiveness (PSLF).  An excerpt is provided below.

Given the recent addition of Revised Pay As Your Earn (REPAYE) to the list of Income Driven Repayment (IDR) plans, there has been renewed interest in the topic of what’s the best plan for medical residents who typically have a large student loan debt burden and a meager income, at least for 3-5 years.  Especially if one is to pursue Public Service Loan Forgiveness (PSLF).  Despite the new attractive offerings of REPAYE, I don’t recommend residents automatically jump over to this new plan.  Read on for more details…
Important: PSLF and IDR plans are separate programs.
There has been some confusion surrounding this issue, so I want to clarify – Public Service Loan Forgiveness (PSLF) and Income Drive Repayment (IDR) are 2 separate but complementary programs.  If you choose to go into public service and pursue PSLF, there are multiple repayment plans you can choose from – including ALL 4 IDR plans (IBR, PAYE, REPAYE, and ICR) as well as the 10-year Standard Repayment Plan.  Now you would not want to choose the Standard Repayment Plan because you will end up paying off all your loans in 10 years, leaving nothing left to be forgiven!  The question is – which of the IDR plans should you go with?

Read the rest at Dr. Wise Money.


For additional reading, check out the following FPMD posts on REPAYE and PSLF:


Future Proof, MD

Dr. Bo Liu is an aspiring radiologist-in-training and the founder and editor of the White Coat Money Blog.  He has an interest in interventional radiology and helping his medical colleagues get ahead in this mad world of medicine and money.  When he's not crushing the list at the PACS station or typing up your next favorite blog post, you can usually find him at the local badminton club, movie theater or the most recently opened restaurant.