Live below your means. Live like a resident for the first few years as an attending. Get the highest paying job you can and pay down your medical school loans fast.
However, the way today’s doctors pay for medical school has completely changed, and so have the rules. Physicians need to have a plan in place to maximize savings on their student loans.
For almost every resident, the Revised Pay As You Earn plan (REPAYE) will provide an enormously helpful interest rate subsidy and will maintain their eligibility for loan forgiveness.
1. Check to See if REPAYE Can Slash Your Interest Rate
My fiancée is a urogynecologist at a not for profit hospital. When we met and I started learning about the student loan rules, I realized we needed to submit something called the PSLF employment certification form.
My takeaway from this experience is that anyone who wishes to track progress towards PSLF must file their employment certification form annually, at least. You can submit the form as often as you want.
If the REPAYE plan’s interest subsidy applies to you, then you’ll be excited to know you can increase the subsidy to an even higher level. All you need to do is reduce your Adjusted Gross Income (AGI).
3. Use Student Loan Rules to Subsidize Your Retirement
The potentially more worrisome Democratic repeal plan proposed by the President would’ve capped PSLF at a maximum benefit of $57,500. PSLF is absolutely an uncertain program to bank on in the future.
4. Build Outside Savings to Hedge Against Changes to Student Loan Rules
Setting your finances up well for the 10% to 15% chance there are major changes to PSLF is a great idea. If you put your money into your student loans with this uncertainty, the only sure thing is that you can’t get it back if PSLF ends up working out.