PracticeLink Magazine

SUM 2018

The career development quarterly for physicians of all specialties, PracticeLink Magazine provides readers with feature articles, compensation stats, helpful job search tips—as well as recruitment ads from organizations across the U.S.

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T HE I N T E rv IE W ISSUE D E P A R T M E N T S Financial Fitness 26 S UMMER 2018 PracticeLink.com ▼ T HE I N T E rv IE W ISSUE D E P A R T M E N T S Financial Fitness w hat's your student loan strategy? Managing your student loans effectively takes an understanding of the payback programs available. w H en I t COM e S t O P r AC t ICI n G M e DICI ne , YOU' re A n e XP ert . When it comes to providing strategic repayment guidance for your student loans, you might need some help. Of the five income-driven repayment (IDR) plans available today, there are really three that are most suitable for today's house staff with federal student loan debt: • Income-Based Repayment (IBR) • Pay As You Earn (PAY e ) • Revised Pay As You Earn (R e PAY e ) Income-based repayment (IBR) IBR was launched in 2009. It's a federal repayment program that limits monthly loan payments to 15 percent of your discretionary income. To be eligible, a partial financial hardship must exist, meaning that 15 percent of your discretionary income, calculated on a monthly basis, is less than what you'd be required to pay on a 10-year standard repayment plan. This hardship exists for most trainees with federal student loan debt, as 15 percent of the discretionary income of a single resident with a $50,000 salary would result in a roughly $400/month payment. The 10-year standard monthly payment on $220,000 of debt, by comparison, would cost about $2,500/month. Clearly, a hardship exists. IBR is also a qualifying repayment plan for the Public Service Loan Forgiveness (PS l F) program. Taxable loan forgiveness is granted through IBR after 25 years of repayment. However, payments in IBR are capped at the 10-year standard payment amount established when the borrower entered IBR. Because of this cap, many attending physicians would pay off their loans through IBR before the 25-year forgiveness period expires. IBR is the least-used IDR plan by today's graduates since the introduction of the following programs. Pay As You Earn (PAYE) PAY e was launched in 2012. Similar to IBR, PAY e limits payments — but to 10 percent of a borrower's discretionary income instead of IBR's 15 percent. Under PAY e , taxable loan forgiveness is granted after 20 years of repayment. The payment cap is also the borrower's 10-year standard repayment amount. PAY e is a qualifying repayment plan for PS l F as well. Only borrowers who have no outstanding balance on JASO n DILO ren ZO

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