Funding medical school

WayOutWestMom
Tue, 09 Aug 2016 21:01:02 +0000

Ah, PSLF!

Yeah, don’t count on it. The next Congress will likely kill the program because it costs too much and is being used by individuals that program was never intended for. (Like many Congressional staffers/consultants/lobbists as well as high income professionals like doctors, dentists, lawyers etc. IIRC, the program was originally intended to serve people who worked in education, social work and other low-paying public interest careers.)

The other issue with PSLF is that many/most doctors are not directly employed by non-profit entities (like public hospitals), but rather are employed by physician groups who then contract the services of the doctors to public hospitals. It’s a fine distinction, but enough to DQ it as employment in the non-profit sector.

And yes, any loan obtained through the credit union would not be eligible for any STATE or FEDERAL loan forgiveness programs.

And one more caveat about PSLF–the amount of any loan balance that is forgiven is considered to be income to the individual for that year. So if your daughter has $85K forgiven, she will have to pay state, local & federal income tax on that amount in addition to any income earned that year.

Does the interest rate change along the way? Can it go back up before she is done?

The interest rate is set every July 1 for all loans disbursed between July 1 and the June 30 of the following year. The exact rate is determined by a calculation based on certain economic indicators as specified in the Bipartisan Student Loan Certainty Act of 2013.

So yes, the loan interest rate certainly can go up as well down.