Speaker 1 00:00:08 What's up, everyone. Welcome to the finance for physicians podcast. I'm your host, Daniel Raimi. Join me as we dig into what it looks like for physicians to begin using their finances as a tool to live better lives. You can learn more about our
[email protected] let's. Jump into today's episode. Hey everyone, hope you're having a great day or night or drive or run or whatever you're doing. PSLF has been a hot topic really for many years now. Um, I'm sure for those that haven't heard of it, it's public service loan forgiveness. Um, I, I can't keep up with the number of people that I've talked to that are, have concerned about PSLF, uh, whether or not it's going to pan out. A lot of people I've talked to, um, have completely pulled the, you know, thrown in the towel on PSLF and refinance to five to private student loans strictly because they're concerned about the viability of the program.
Speaker 1 00:01:04 So there there's a lot of, a lot of concern, a lot of, uh, questions. Is it going to pan out that sort of thing? Hopefully you haven't pulled the plug on it completely. Um, I think that would be a big mistake, but today we're going to be talking about why, and, and we're going to talk with someone that has some, some experience with it, and that is able to share their story of actually receiving PSLF and getting that full forgiveness approval. So if you're already going to be working for a qualified employer, I think, you know, it's always going to be making sense to at least leave that PSLF option open. Now, if you stay with them for the long haul, great. Now PSLF has definitely not without flaws. I've I've written about it in the past. In 2016, I wrote about PSLF being a ticking time bomb.
Speaker 1 00:02:00 Um, and, and that, that was not because I thought the government was going to, you know, stiff people or that sort of thing. It's more because I saw how many borrowers themselves were having trouble with keeping up with all these requirements and doing what they needed to do on their end. Um, and that's, that's really panned out over the years, um, is people have received, you know, declines from PSLF mainly because they weren't doing what they needed to do to try to be on track for it. Now, recently there's been big news, uh, in the form of the PSLF waiver, which has been huge for those borrowers that, uh, were working towards PSLF, but weren't quite checking all the mini PSLF boxes. They basically reduce the requirements and make it easier, much, much easier to qualify for, uh, PSLF uh, payments. But, uh, if you haven't heard about the PSR PSLF waiver and you still have federal loans, definitely check out our episode on that.
Speaker 1 00:03:02 I'll link to that in the show notes. That's, that's going to be a huge deal for some borrowers, but either either way, no matter what the situation is, you know, waiting for something like PSLF, I know that that can be a big stress and, um, there's lots of questions that come up. Like, what if they changed the rules? Like what if they decide not to approve me? What if I don't qualify? I don't, I don't realize it. You know, what if they just decide to stiff us? I mean, there's, uh, and, and, and maybe you haven't really heard of any, any of your buddies that have actually received it yet. So I think it would be nice. Um, and we've heard this from a lot of people, if we could just find somebody that has actually received it. So today we're going to be talking with a physician that has actually received it, and he's going to be sharing his story, talking through his experience in dealing with PSLF hopefully you guys will benefit from hearing. He's got some tidbits about it, some tricks of, uh, going through it that I think will benefit you guys. So we'll jump into that now, Neil, thanks for joining me today to chat about your
Speaker 2 00:04:03 Story. Thanks Daniel, for having me.
Speaker 1 00:04:06 Yeah. So I'm excited to be talking, talking with you about your PSLF experience. And we were talking about it a little bit before we hit the record button, but so I definitely want to talk through your experience with it, but before we jump into that, I'd love, I'd love it. If you could share just kind of a little bit of background about where you're at in life and your story and that sort of thing.
Speaker 2 00:04:27 Oh, sure. So, uh, I'm a physician. I did my medical slowly and everything in the Midwest and Northwestern, and I'm on faculty at the university of California Irvine school of medicine I've been there now for seven years, uh, was fortunate that, um, he was able to use part of my residency, all of my fellowship and the seven years that I've been on faculty to make the required 10 years for the public service loan forgiveness program. A reality, I would have qualified three years earlier if I had known about the program when it first, first came out. Uh, but that said, I think I'm still, probably in the earlier group of people that are getting their forgiveness. So it's a, it's one of those things where it could have been done earlier. Sure. But, uh, it, so that it got done at the time that it, that it sort of dead.
Speaker 1 00:05:12 Yeah. So for all y'all listening, he's using keywords done. It's been very important. A lot of we'll get into the details of that, but he is done with PSLF as in his balance is zero. I think that's important to clarify, but I guess before we talk through that and how your experience kind of getting to that point, you said your first three years, you weren't aware of, of PSLF, is that correct? Like your first three years of training?
Speaker 2 00:05:38 Correct. So my residency was a four-year program and it wasn't until I started in 2008, it wasn't until 2011 after some Googling that I realized, oh, there's this public service thing and oh, I need to have a direct loan. And meanwhile, I was paying my previous servicer, quite a bit of money, just trying to make, uh, the interest and maybe a little bit than some. And so, uh, I was not aware that it had even sort of come out until three years into the training.
Speaker 1 00:06:05 Did you have FFE Owens?
Speaker 2 00:06:07 I did. So both of my, both of my loans were at Raffa feels subsidized and unsubsidized.
Speaker 1 00:06:12 Okay. So for those that aren't familiar, that's that type of loan is not around anymore, but I'm used to be kind of a federal loan did not qualify for PSLF. So like about half the people back then had FFL loans completely did not qualify for PSLF now because of this waiver thing, that's come out recently, they're now qualified. So you can check out a prior episode. We talked about the waiver, if you want to kind of learn more about that, but the problem was, and so I was working in the industry back then in 2008 and working with physicians with financial aspects. And that was, it was interesting because basically nobody knew about PSL. If it was like, I'm surprised you, it sounds like you had some initiative to kind of figure it out yourself. Yeah.
Speaker 2 00:06:57 This freak out moment realizing how am I going, wondering on a, at least then on resident wages, how I'm going to pay off these loans, what's going to happen down the line and then realize that there's probably nothing to be lost by for my case, at least for by consolidating these into this direct loan, uh, and having a, a loan form of it at least qualifies me to undergo PSLF whether or not I chose to go into public service at the end or, or, or not at least to have that option open for me personally, it kind of made sense, uh, at that point.
Speaker 1 00:07:27 Okay. Gotcha. So you started in the program in 2011 hints we're in 2021 it's 10 years later, since you must have been making payments the entire time along that 10 year period, right? Yeah.
Speaker 2 00:07:38 Yeah. So it was paying on an income-based plan, uh, for initial payment plan was the, the pay as you earn plan was just 15% of discretionary income every month. And so that was the Pam plant that I was using, um, off the bat. And then later on, I think it was during the Obama administration that the repay, the revised pay as you earn payment option came out. And that was 10% of one's discretionary income every month. And so, uh, I switched into that program and then, uh, COVID sort of happened in, I think it was March, 2020, where there was an administrative freeze where, uh, $0 payments every month that, but each month that you're still employed in public service counts as a qualifying payment. So pretty much the last bit of it from March 20, 20, 20 until my hundred and 20th month, which was October, 2021. Uh, that part was, we were to now at a $0 monthly payments, which all qualified to, to get me through,
Speaker 1 00:08:38 Which is a home run. I mean, that's what
Speaker 2 00:08:39 It is, which is an absolute home run.
Speaker 1 00:08:42 That is a huge deal. Cause it's like, I mean, I'm just, you know, let's use average physician income kinda numbers. It's like if you're making a couple of hundred thousand dollars a year or something, and I mean, you're going to be paying, you know, thousand plus dollar a month payments times, you know, 20 months or whatever it is. It's tens of thousands of dollars, pretty much on the low end of value. That's happening due to this COVID $0 payments. So, and at timing worked out really well for you cause you were at the back end of PSLF right. When this stuffs, you know, started to wrap up.
Speaker 2 00:09:16 Absolutely. And so it didn't have to fortunately worry about the, the resumption of these payments and, and getting used to kind of having more cashflow in my bank account on a monthly basis. The, the, the other thing too, with regards to these, these monthly payments, I think I was probably around 11 or 1200 or so before they stopped, uh, I was trying to do everything I could, of course, to minimize my, my adjusted gross. So really trying to take advantage of all the pre-talk savings offerings, uh, that were afforded through my employer. Uh, we have asked us to actually two separate streams, the 4 0 3 B and 4 57. So maxing out both of those minimums and adjusted gross to try to thereby also save for retirement and minimize my monthly, monthly payments being made. Uh, but definitely, you know, as you, as you progress in your career, then your monthly payments are going to sort of go up. So to have had the COVID administrative freeze was as, as Daniel said, uh, definitely home run. Yeah.
Speaker 1 00:10:13 Like we were saying at the beginning, I mean, COVID very unfortunate, but there's been lots of programs out there that have been financially beneficial. Um, so job wise, uh, it's always, uh, I talk with a lot of, uh, early career physicians or medical students even, and it seems like a lot of them say stuff like I'm going for PSLF or it's like PSLF first. And then job second it's like, I am looking for jobs because I'm going for PSLF I'm looking for PSLF qualified jobs. We were talking about as well before we started recording this idea of maybe you ought to think about like job first PSLF second, if you happen to end up being in a PSLF qualified job. Great. Is that maybe you could expand upon kind of your thoughts on that and like how you view a job as it relates to PSL.
Speaker 2 00:11:08 Yeah, absolutely. I think that's a really, really important point to bear in mind because the w I would say definitely don't have the focus on, on loans and PSLF to the point where you, you sort of jeopardize your career and end up stuck for multiple years, doing something that you really don't want to do. It's just not worth it. What is important of course, to be prudent and make the, make the spreadsheets and break even calculators to think, okay, if I do a job in public service, which often, especially in academics are going to pay lower than what you could make in sort of private practice, then where is my break even here? And what is my quality of life going to look like? What is my enjoyment of life gonna look like? Versus if I were to do say a private practice gig and, uh, and have higher earning potential, uh, and still be paying and sort of be obligated to pay off my loans.
Speaker 2 00:12:02 And so I know people who've done it sort of both ways, and who've gone into academia because they love the academia. Who've gone into private practice because they felt that was better oriented for them. And truth be told, both have done sort of just fine. Uh, you know, if you go into, if you go into, if you go into private practice and things like that, the earning potential is there. Where generally speaking, you can go off and pay your student loans off and in a reasonable amount of time, uh, you can even get concessions from employers, things like that to the help of one forgiven loan repayments. Uh, whereas if you are in Sandra academic institution, you might have access to things like various pension plans, a defined pension benefits, depending on how long you stay, how long you invest, but at the end of the day, it's really important to put your interests first and then see how much is the amount of loans that are on the table going to weigh in to that decision maker.
Speaker 1 00:12:56 Yeah. Ideally you find that you'd love a job and it happens to also be PSL qualified, or maybe it's not. And then you in medicine, you're financially still going to be fine. It's a good earning higher earning career. And, um, there's also this other camp of people working in, um, hospitals non-academic that are earning very high income that are still PSL of qualified.
Speaker 2 00:13:23 Eh, it really depends on how the, how, how the hirings kind of, kind of work if it's directly hired by the hospital versus on behalf of a group through the hospital. If it's on behalf of the group through the hospital, then it can be a little bit trickier because even if the hospital is, if I would want to stay with the organization, then the group itself may not be because you're being hard on behalf of that group. So that may not necessarily qualify, but if it's directly employed by a hospital and it probably depends on what, what, what state it's in and then how the laws kind of work. But if it's, if one is employed directly by a 5 0 1 C three organization, certainly academia is not the, the, the only way to do it, any, uh, any not-for-profits, uh, organization would, what would qualify from a hospital type standpoint for, for sure. And that's a very good point
Speaker 1 00:14:10 At any point. I mean, 10 years is a long time, but at any point that you can think of, or remember along the way, were you concerned about like the viability of PSLF?
Speaker 2 00:14:19 Uh, yeah, there were a few scares, um, I mean, even, even off the bat, you had people who were the naysayers saying like, you know, how can you trust the government? Are they really going to follow through on this? Are they going to pull the rug from under you? And then you have this other camp? And I think one good thing about this is that it didn't impact just dispositions. It impacts the fair amount of folks who are lawyers. And so there's probably hundreds of thousands, if not, probably a few million lawyers who were coming out of law school, who were also going to be in very big trouble. If, if this, uh, if this did not pan out. And I at least trying to look at the, the approach and the legal kind of ramifications of this, the, the, the lawyers seem to feel that if the folks who went to the public service and were on route to PSLF, that legally there should be enough potential for class action.
Speaker 2 00:15:09 If the rug got pulled out from under them, that we're probably going to be okay if you already started the program and you were part way through it, that the government was sort of have to let you finish now, thankfully it hasn't looked like it's come to that step. If anything, it looks like they're trying to actually expand the program and get people more aware about it and not try to say, oh, you know, this is a bad idea. Let's just get rid of it. So I was concerned that there were some online petitions where the, the, the ideas, it was, there was some whispers that there might be bills that would come out to try to kill PSLF. I don't think they ever ultimately ended up getting introduced, but even at that stage, there were online organizations trying to ask for petitions and support to try to counter those sorts of things. So, yes, there were definitely some scares along the way, uh, that that being said, I, I think, uh, you know, I think it right now, I see the climate as being, uh, a lot more friendly with the government, actually in depart of education, trying to actually go out there and, and, and, and get people who would have fallen through the cracks. Even those folks try to get them some loans, some, some, uh, qualifying loans that would otherwise not have mollified.
Speaker 1 00:16:15 Yeah. I've talked to more people than I can even remember. There were lots of people that had concerns along the way, and a lot of them pulled the plug on it and refinanced and bailed out. And like maybe one of the scary news articles along the way, kind of got people thinking we would get emails about this Gary news articles like PSLF is going to explode type news stories that, and a lot of times they would just, uh, refinance. But what's unfortunate about that is the people that, uh, in our experience, in our experience, it has been kind of a little bit of a mess, a time bomb, but it's been because of people that aren't keeping up with, things like themselves, or have not been on the ball about it, or weren't proactive, like you were and consolidate their loans and track their payments along the way.
Speaker 1 00:17:06 Those have been the people that have been, you know, feeling like the rug has been pulled out, but, but like you're saying for the people that have done what they need to do, and especially with this new PSLF waiver thing, it's like, everything's kind of starting to fall into place where it's like, they're showing some love towards PSLF. It's like, they're almost pushing more towards it. And, um, the tides are turning quite a bit, but along the way, though, I'm curious, did you, um, track your, uh, progress yourself? Did you submit like the employer certification often? Did you do it? What was that like? Yes.
Speaker 2 00:17:39 So, uh, when I, when I first start, I think the employer certifications, I think they became available kind of at the end of my fellowship training program. They didn't, um, it was sort of like, well at the 10 year mark for the best. Yeah. Which is, which is, which is a, a lot of time to spend on tenterhooks. Um, and only to realize that something has gone horribly wrong along the way. So when I think this first came out was during these forums, kind of came out during my fellowship or the start of my faculty position. And at that point, I went back to, uh, where I had done my residency, where I had done my fellowship and asked for the employers there to certify my appearance of employment there. And then every year from then on where I'm currently at university of California, Irvine, I've asked my employer to complete the certification form.
Speaker 2 00:18:32 And so what happens is you, you fill out the certification form for the amount of employment that you think you've had, that's qualified. And then the, uh, and then basically my fed loan is going to go through that information and give you an updated tally of how many qualifying payments you've made. So those are basically like, you know, it's like saving a game when you're playing it. It's like your, your game is saved at that point. And you just keep adding onto that. You never have to go backwards. So once, once you're certified for qualifying employment, you can rest assured that those payments are actually qualifying towards your 120 that are required. So from, from my standpoint, I made sure do it every year, they actually are reasonably, they actually seem pretty chill about the, the form I looked back and I think I was using an older version just because it was template in a PDF.
Speaker 2 00:19:21 I just had to modify the, the dates of employment a little bit and send it back to my administrative officer to, to sign off and, and they accepted it. So, uh, definitely what I would say is if you're in a, with a stable employer for a good amount of time for PSLF just keep one templated form updated every year on your PDF, send it in, get it sent back and, and just keep tracking your payments and make sure that your account matches. What's the, uh, what, what they're telling you. Um, I, for me, it was never an issue. Uh, everyone was, it was right on the money. There was not a miscount or anything like that. But, uh, I do know I've heard of some, uh, some friends who have, uh, initially had some issues and then had to, had to bring to the attention of, uh, the, the, the, the servicer that they had a few payments that should be counted. So just definitely be on the ball about that rest assured though, that once you do get those payments certified, that you're, you're good until the next batch. So just make sure at the end of the day, that that count matches the count that you expect. Yeah.
Speaker 1 00:20:23 And you're definitely in the minority there in our experience, working with people is that very much the majority have not had the number, like their count has been higher than their official count, which is not, not the best place to be for various reasons. But, um, I think with this PSLF waiver program, part of the design behind that is to help clean that up and provide a more accurate and audited, I guess, like second set of eyes on the payment count. Hopefully that improves that, uh, tracking along the way. Yeah. If any of you guys listening have, you know, discrepancies in your numbers, it's supposed to be part of this PSLF waiver program that's happening is they're supposed to be doing audits of everybody's progress. You just have to submit the employer certification in order to be eligible for the period of time. So as long, the key takeaway is you gotta be submitting employer certifications, uh, for any given period of time. The other key that you mentioned, Neil is like, you are doing it every year. Our experience with people, a lot of times, you know, people, most people are procrastinators and they kind of delay and they'll do like, you know, five years and then submit one, it takes forever. And it's a mess when you're submitting five years versus if you break it into year increments, it's a lot better. I mean, it's more efficient, typically faster processing. Yeah.
Speaker 2 00:21:48 It's a lot, it's a lot faster to do it that way. I mean, especially, uh, you know, once, if you're at a, if you're, again, if you're at a stable organization for a reasonable duration of time, you're pretty much going to have likely one person that you're going to communicate with that was going to certify as the official on your behalf. And so once you get to know that person, I know what the form is about. It, it's pretty fast to, to, to, to get it done. The initial legwork is, is, is a well-worth the peace of mind that to, to just get it done on an annual basis. And with regards to the, uh, to the PSLF waiver waiver program, uh, my understanding is that one now has until October of next year to kind of get previously, uh, previous employment or a loan repayment that would not have qualified, potentially qualified. So it's definitely golden opportunity to, uh, do the house, to keep me there and get that done and see if there's other missed payments that would not have qualified previously, that it will now be, uh, that will now be qualifying. So definitely, you know, go back to the previous employers, get the employment certification form and just, uh, just contact the contact, the servicer and, and, and, and, and get those in, um, you know, there's like a year to do it, but now it'd be a golden opportunity to get that done.
Speaker 1 00:22:58 Yeah. I think it's next Halloween 2020 is the deadline. And like, it's going to be a mad rest. So like, do it now, give, give yourself some time, but like, that's the absolute deadline is to submit all your employment certification by then. And then also if you have FFL loans, you got to do direct consolidation before then as well.
Speaker 2 00:23:16 Right. And so for me, the direct consolidation happened automatically once I, once I submitted the, the initial form for, um, I think it was for, it was for consolidation of my loans got consolidated, and then the servicer got transferred over to, uh, PGA, which is my FedLoan.
Speaker 1 00:23:33 So what was it like the final application?
Speaker 2 00:23:38 Yeah, so it's, it's a little surprising because you're expecting kind of like this momentous of things and it, it kind of, isn't like it, the result the result gets there, but yeah, you're spending of this very formalized process or this, this letter in the mail St. Crunch relations you're done. So what it was for me, there's the updated employer certification form, uh, that that's available, which I downloaded. And, uh, I think there was a, there was a section on there and it was basically the same forum is sending out for, for multiple years. But I think the one difference was that on this version, there's a, a question that says, you know, do you feel, do you believe you qualify for loan forgiveness at this point? And if so, what do you want done with your monthly payments? Uh, in the interim that we process this and I chose, well, I knew I hit one 20, so I basically just went ahead and said, look, I want my loans put into forbearance.
Speaker 2 00:24:31 I don't want to, I don't want to get another bill, even though the administrative forbearance for COVID is still underway. I just didn't want to take the risk that, you know, again, another bill later on, I have to pay some money and then have to get a refund that later I just toasted take the risk that look, I know I'm at one 20, I'm going to get this done. So, uh, just to put loans into, for guarantees and don't bill me anymore, uh, until you guys figure this out. Uh, so that was the only real change that was on that form. It was the same form as before. Um, so I uploaded it, uh, waited for, uh, waited for a bit. Um, I think it was for the initial to get the initial sort of initial message that I had hit 120 qualifying payments with the updated employment certification form.
Speaker 2 00:25:15 That part took a little bit longer than it has in years past before it was a couple of days to get the updated employment certifications certified. Uh, this one took slightly longer, I think probably on the order of, um, two to three weeks for that portion. And then what happened is that I, I logged into my fed loan account and I saw this like golden cup trophy thing that says, congratulations, you've, you've hit 120 qualifying payments, but my loan balance was still the same as it was, you know, in, in, in, in, in, in the, uh, in the high hundreds of thousand dollars. And so will, the trophy is a good sign though. Yeah. I was kinda waiting on that. Like, Hey, I'm not this trophy, but I still still low balance. What's kind of going on here. Um, it turns out that when I call them, my FedLoan is not the, is not the one that grants or your final sort of forgiveness.
Speaker 2 00:26:03 They take your application and they compile everything. They see that you've hit 120 qualifying payments. They then give that information as a part of education, and then they have to sort of get their blessing and approval to clear out your loans. So on November 3rd, I got a log in to my account to see the trophy on November 11th. I logged into my account and I saw that there was zero balance. Um, and at that point I couldn't even click on things to get loan history or prior payments. So that has sort of formally cleared. Uh, I got a notification from credit karma just yesterday that, uh, the, the, the fed loan account has closed out. Um, and so that is officially zeroed out because early enough, I was told that I was supposed to get some sort of letter or something formally a test, and that I've gotten forgiveness, but I've not gotten that yet. So I'm not really sure what to specifically expect that being said, you know, certainly the loan balance is zero. The accounts actually closed out. So what I can't speak to is whether there's some final, really official letters saying high crash relations are completely done, your balance is zero. Or if you just accept the fact that your balance is zero in the portal and the fact that your account is closed out. Yeah,
Speaker 1 00:27:08 Yeah. I mean, you would think it would be big. And like you said, I don't know, at least a letter, I would, I would think there's a letter, but, um, that would be reassuring to see the credit report be zero. And, and the fact that Finland's shows us that all a balance it's, it could just be that that's their process, I guess, for, for doing it deep. These are, this is all your Neil's at the very kind of early crop of people getting this. So we're still kind of figuring out what this is going to look like. Um, I think the biggest thing is that it is happening. I mean, like people are getting forgiveness. One thing I wanted to clarify, so like Neil is on the ball. I can tell just from our conversation with his student loans, you know, most people are busy and not, and not so excited about student loans and are not as on the ball.
Speaker 1 00:27:52 And so for, for, for the average person, I would lean towards not choosing forbearance when you submit that final application. Um, if you're not sure about where you're at, you heard Neil mentioned, he was sure he was at the a hundred and 20th payment. So it doesn't really matter at that point, but if you're unsure, you know, maybe you're one 16, maybe 17, or maybe you think you're just kind of close. I would choose to go ahead and continue making payments while they calculate it, just to make sure case cause they are required to refund those, you know, if you make extra payments beyond them. So that's just kind of a clarification there, but as we wrap up Neil, I'm curious if you have, um, any other words of wisdom mainly for like the younger folks that are kind of early in on this and thinking about,
Speaker 2 00:28:40 Yeah, I think right now, as it turns out, so back in my day it was FFL loans, you know, direct and, and you know, you ha you have basically FFL and it was subsidized and unsubsidized and now I think there's no, um, there's nothing else except for the direct loan, if you get that type of loan. So you're, you're already in a qualifying loan without having to do with a specific consolidation, which is, which is great. You know, if you're, if you're just kind of, we're just kind of starting out, it, it, it, it might not be a bad idea just to keep this on the table as a potential option. Uh, it doesn't obligate you to, um, you know, it, doesn't obligate you to basically go into a public service organization. One thing in retrospect that I should share that I think is pretty useful is that, you know, Sage is you just finished medical school.
Speaker 2 00:29:28 You're about to start your residency. If you have, you know, if you're in with, with, with, with my fed loans, through the direct loan format, then your income, unless you've been earning money on the side, while you're in med school, your last task to, that's going to be used to compute your first year of residency, pay your payments during your first year of residency should actually be zero. So, uh, you know, technically, and I wish I knew that because that's time I, there was, there was years of eligibility that I missed and right off the bat, I was basically trying to pay interest on, on these student loans and, and spending quite a bit of money each month, especially on a resident ways trying to do that. Whereas I could have been qualifying for public service loan, forgiveness, and paying $0 payments for like a year.
Speaker 2 00:30:11 So I think, you know, off the bat, like your first year, if you do it right, you pretty much should be paying little to zero to little for that first year of payments that you have during residency. And if I want to stay with your organization, so your first year of payments should actually be zero. Um, if you kind of do it right. And then the, the other thing too, um, I would say is that, uh, there's one of the things that was important. Uh, yeah, I wish I had, that was definitely one thing that I wish I'd known in, in, in, in retrospect. And I think that there's a lot of money. You
Speaker 1 00:30:41 Can't use the, I can't afford it. Excuse.
Speaker 2 00:30:43 Yeah, that would be, oh. And the second thing that, that brings out the second point, which I just wanted to say is definitely do what you can to minimize your adjusted gross income. So certainly if there's a, if there's employer pretax, retirement, saving funds, you can contribute to do what you can to maximize all of those. Um, most people usually can do, you know, they should have a year, but if you're like 401k or something, or four, three B or 4 57, usually people have asked us to like one of those, um, in my institution, we actually have assets to 400, three B and 4 57. So I can contribute up to like 39 to 40,000 a year total between the two plans pre-tax. And that helps to minimize the adjusted gross and save for retirement. So, uh, since your, since your monthly, payment's going to be computed on your, uh, discretionary income, the lower you can make your, uh, the lower, you can make your apparent income, look the better.
Speaker 2 00:31:35 And if you can save for retirement at the same time, by all means, do it. So definitely try what you can. If you're not going to be paying towards your loans, at least pay towards your retirement for your, for your residency and contribute into whatever, uh, whatever pre-tax, uh, 401k plan you might have for instance, and that way, instead of paying your loans, you're paying into your own retirement savings. You're also decreasing the amount that you're going to be paying on a monthly basis towards those loans. If you're going to go for forgiveness or at least keeping that option open. So those are the things I would have told myself in retrospect, had I known about this, right? Yep.
Speaker 1 00:32:06 It's a great, great time to be like, if you're in training and I mean, that's not only all the things you mentioned, you also have like huge compound interest. Cause you're so young and it's just the best time possible to be socking away money into retirement plans. And if you happen to have a $0 loan payment, it's like, well, you know, the money, like you're saying the money you would have had to pay the student loans, you can add minimum, put that away.
Speaker 2 00:32:28 Yeah. It's one of yours. And then you can do, um, you know, also the, the other thing too, it's a little bit timing dependent because I think my, my annual re-certification kind of came right tax time where I would have to give my updated income every year to, uh, to my FedLoan for the re computation of my loan, my loan stuff. But it was also to the point where if, if it's timed correctly, I was able to use basically the, the return from, I think the, the year prior or the year before that I don't quite remember. It was basically right at the cuffs where it'd
Speaker 1 00:33:02 Be like two years
Speaker 2 00:33:03 Before. Yeah. I would basically wait to file my taxes to right after submitting the recertification so that my most recent set of filings wouldn't be at a higher income level. So you can think about these timing logistics as well, to try to minimize the burden that you're going to have to pay.
Speaker 1 00:33:18 Yeah. There's lots of strategy. And then if he, if you're, it gets a little, even, even more strategic, you get married and have a spouse with Viet going for PSL as well. Then it's like, oh, there's a lot. But the good thing is, there's all kinds of strategies. So the things Neil's Sharon and many more, there's all kinds of strategies. Um, you know, that you guys can be thinking about as you're pursuing that. And a lot, ideally the best are those ones. Like you mentioned, like putting into a retirement plan, even if you end up not going for BSF, it's still a good thing to do. So it's like, you can't go wrong with that. That type of is definitely awesome. Neil, I appreciate you chatting with me about this and taking the time to talk through this today.
Speaker 2 00:33:57 Thanks for having me Daniel. I appreciate it. Glad to share
Speaker 1 00:34:00 As always, thank you so much for joining us today. If you found this valuable, please give us a review on iTunes and share with a friend. Also check out our
[email protected] for all sorts of additional content. See you next time. Finance for physicians is not an investment tax legal or financial advisor. All content included in this podcast is for informational purposes only and should not be considered financial tax or legal advice. Material presented. It is believed to be from reliable sources and no representations are made by finance for physicians as to another party's informational accuracy or completeness, all information or ideas provided should be discussed in detail with an advisor accountant or legal counsel prior to implementation. If you don't have an advisor or like a second opinion, feel free to check out our website for recommended advisors.
