If you are a fan of Future Proof MD, then there is a very good chance that you also know about the White Coat Investor (WCI). In fact, Dr. Jim Dahle was one of the inspirations for me to start my little blog in the first place. I'm very excited to feature my very first guest post on WCI. I hope you enjoy. Excerpt below.
In my previous posts PSLF – Why REPAYE May NOT be the Best Plan and Pay as You Earn (PAYE) vs. Revised Pay as You Earn (REPAYE), I discussed the pros and cons of the REPAYE plan for repaying federal student loans. I had been on Income Based Repayment (IBR) since leaving medical school in 2013 and planned to stay on IBR following the introduction of REPAYE. However after some consideration, I decided to switch to REPAYE – it will allow me to keep more money in my pocket every month while keeping my debt growth at a similar rate. Here is why I did it…
CONS OF REPAYE: As a quick review, there are basically 2 cons of REPAYE:
Removal of the payment cap – under all of the other income driven repayment (IDR) plans, your payment will rise with your income, but never more than the amount you would have paid under the 10-yr standard repayment plan. There is NO cap on calculated payment amount under REPAYE.
The “Working Spouse Penalty” – Spousal income now considered – NO MATTER WHAT! Under all of the other IDR plan, you can enjoy the benefits of filing taxes separately with your spouse, hence limiting the “income” portion of the Income Drive Repayment (IDR). Under REPAYE, your spouse’s income is now factored into calculating your payment – NO MATTER HOW you file your income tax returns!