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Studen Loan Question (resident doctor)
Posted on 12/13/12 at 2:31 pm
Posted on 12/13/12 at 2:31 pm
Money board, i could use some of your knowledge or advise.
my wife is a doctor in her 1st year of residency. Over the course of her college and medical school career she has tallied a nice lump of student loans. These loans officially come up around the first of the year.
I first looked into deferment 2-3 months ago for her by researching online and speaking with Sallie Mae on her behalf. It was my understanding at the time that she qualified for deferment due to her salary being below a certain threshold. However at the time they would not allow her to process the deferment because you have to be within 30 days of the start of the pay period (which makes no sense to me).
Yesterday my wife contacted Sallie Mae to look into her options, but they informed her that the only option she has now is Forbearance. This Forbearance would require her to pay about $1,000 a month of interest.
This seems a little crazy to me considering that medical residents salaries are capped, pretty damn low at that.
Does anyone have any recent experience dealing with this issue?
If so, what did you do? are there other options?
Is refinancing a possibility? She has about half the loans with a 2.9% rate and half with somewhere over a 6% rate. $1,000 a month seems a lot for interest, why not just pay the things?
appreciate your thoughts.
my wife is a doctor in her 1st year of residency. Over the course of her college and medical school career she has tallied a nice lump of student loans. These loans officially come up around the first of the year.
I first looked into deferment 2-3 months ago for her by researching online and speaking with Sallie Mae on her behalf. It was my understanding at the time that she qualified for deferment due to her salary being below a certain threshold. However at the time they would not allow her to process the deferment because you have to be within 30 days of the start of the pay period (which makes no sense to me).
Yesterday my wife contacted Sallie Mae to look into her options, but they informed her that the only option she has now is Forbearance. This Forbearance would require her to pay about $1,000 a month of interest.
This seems a little crazy to me considering that medical residents salaries are capped, pretty damn low at that.
Does anyone have any recent experience dealing with this issue?
If so, what did you do? are there other options?
Is refinancing a possibility? She has about half the loans with a 2.9% rate and half with somewhere over a 6% rate. $1,000 a month seems a lot for interest, why not just pay the things?
appreciate your thoughts.
10
Posted on 12/13/12 at 2:37 pm to donRANDOMnumbers
My SIL, same age as me, went through this a few years back
She choose to just start paying them
It's a ridiculous amount of money, and with what's coming down the pipe I don't envy them
She choose to just start paying them
It's a ridiculous amount of money, and with what's coming down the pipe I don't envy them
Posted on 12/13/12 at 2:57 pm to donRANDOMnumbers
Did y'all look at consolidating her debt and putting it into income based repayment?
Posted on 12/13/12 at 4:26 pm to donRANDOMnumbers
I moved my loans to a graduated payment plan. It starts me on a lower minimum payment, but it is designed to increase every few years with the anticipation that my pay will also increase.
However, I still pay at the original higher rate, but it allows me to be more flexible if money gets tight.
However, I still pay at the original higher rate, but it allows me to be more flexible if money gets tight.
Posted on 12/13/12 at 4:26 pm to donRANDOMnumbers
quote:
income based repayment?
Sallie Mae's website has a section dedicated to different types of payback. Look in to the above as it will allow her to start paying back properly, but in a way that can be afforded with her current income.
Posted on 12/13/12 at 4:48 pm to donRANDOMnumbers
we just started paying back my wifes nursing loan of $50,000 @ $630 a month.
the good news is the state of louisiana will pay back 60% of her loan in october or the federal government will pay back 85% if she gets a job with a federal agency.
the good news is the state of louisiana will pay back 60% of her loan in october or the federal government will pay back 85% if she gets a job with a federal agency.
Posted on 12/13/12 at 5:20 pm to donRANDOMnumbers
I'm not sure what your wife is planning to go into, but they also have a Public Loan Forgivenes plan. That is IF she plans to work in the public sector, for 10 years, and make 120 consecutive on-time payments.
Posted on 12/13/12 at 5:21 pm to donRANDOMnumbers
quote:
She has about half the loans with a 2.9% rate
Please tell me where I can get these kind of loans
Posted on 12/13/12 at 5:31 pm to TheOcean
quote:
tell me where I can get these kind of loans
I think that's old school rates.
Posted on 12/13/12 at 5:40 pm to donRANDOMnumbers
If I remember, I went into forbearance on the low interest, and paid on a couple high interest one's. On PGY2 year, we were allowed to moonlight in local ER's and I was making an extra 10 grand a month, on top of my $35,000 salary..That took care of alot of things. Still owed $180,000 after
PGY5. Signed a 1/36 month repayment with the Hospital that recruited me.. They paid off the loans and I owed them 3 years. I've heard the forbearance rules have changed, but it was the way to go, back in late 90's...
PGY5. Signed a 1/36 month repayment with the Hospital that recruited me.. They paid off the loans and I owed them 3 years. I've heard the forbearance rules have changed, but it was the way to go, back in late 90's...
Posted on 12/13/12 at 6:17 pm to TheWiz
2.9%???
frick me. Any chance of scooping up a private loan for less than 5%?
frick me. Any chance of scooping up a private loan for less than 5%?
Posted on 12/13/12 at 6:33 pm to donRANDOMnumbers
quote:
donRANDOMnumbers
Not doubting you, but are you SURE they wouldn't put them in deferment?
My understanding is that you can almost automatically defer as long as you need as long as you have proof that she is still training. I just had this conversation with Sallie Mae yesterday.
Does she have some sort of atypical loan setup? Something doesn't add up.
Posted on 12/13/12 at 7:15 pm to NOMT
Moonlighting is the way all my buddies and I paid off our loans
Posted on 12/13/12 at 8:20 pm to WmWallace
I was about to say the same thing. Moonlighting is the way to go. I remember when I never thought I'd get my loans down to a manageable sum. I started out with about $85k and my wife had about $10k. We just kept plugging along and we are now at $13k left. It's taken about 10 yrs to get to this point.
Posted on 12/13/12 at 11:49 pm to NOMT
No more deferment options, I promise you. Straight out of Sallie Maes mouth. I also did some more research to confirm.
I spoke with another friend of mine who is finishing residency and he said he was in the same situation. Mentioned he did forbearance for one year then just started making standard payments.
There used to be residency deferment program, but I don't think it exist anymore. What's sad is all these people took a loan workshop in med school and they were advised to defer, which is not possible.
Going to look into options for her tomorrow.
I was advised by my friend that the amount owed during forbearance will be less then they originally told us whenever they find out her income.
In regards to loans: her federal loans are 2.8ish percent, but her private loans are in the 6-7% range. Forget exact amount off the top of my head.
I spoke with another friend of mine who is finishing residency and he said he was in the same situation. Mentioned he did forbearance for one year then just started making standard payments.
There used to be residency deferment program, but I don't think it exist anymore. What's sad is all these people took a loan workshop in med school and they were advised to defer, which is not possible.
Going to look into options for her tomorrow.
I was advised by my friend that the amount owed during forbearance will be less then they originally told us whenever they find out her income.
In regards to loans: her federal loans are 2.8ish percent, but her private loans are in the 6-7% range. Forget exact amount off the top of my head.
This post was edited on 12/13/12 at 11:54 pm
Posted on 12/13/12 at 11:52 pm to guttata
quote:
I was about to say the same thing. Moonlighting is the way to go. I remember when I never thought I'd get my loans down to a manageable sum. I started out with about $85k and my wife had about $10k. We just kept plugging along and we are now at $13k left. It's taken about 10 yrs to get to this point.
My wife has around 175k but with accrued interest it's closer to 200k.
Since we moved for her residency i am about to sell my house, which is worth a little more then her loan debt.
Posted on 12/14/12 at 12:41 am to donRANDOMnumbers
quote:
No more deferment options, I promise you. Straight out of Sallie Maes mouth. I also did some more research to confirm. I spoke with another friend of mine who is finishing residency and he said he was in the same situation. Mentioned he did forbearance for one year then just started making standard payments. There used to be residency deferment program, but I don't think it exist anymore. What's sad is all these people took a loan workshop in med school and they were advised to defer, which is not possible. Going to look into options for her tomorrow. I was advised by my friend that the amount owed during forbearance will be less then they originally told us whenever they find out her income. In regards to loans: her federal loans are 2.8ish percent, but her private loans are in the 6-7% range. Forget exact amount off the top of my head.
That sucks. Must be that way for newer loans, as I can simply defer every cent of mine as long as I'm in training if I wish.
Well...there are other options to lower her payments at least. They do an income based plan that should get them down fairly low (at least lower than $1000...that's insane on a resident salary).
I've never had any issue when calling them about adjusting payments based on what I could pay back...there should be multiple options for her that don't break the bank while she's in training.
What is she doing residency in? Good luck to you both.
Posted on 12/14/12 at 4:44 am to donRANDOMnumbers
I remember missing the deferment date, and I had to make a full loan payment (P+I) to get it out of forbearance/make it current, then they allowed me to defer. This was in 2002, so it may have changed.
If i were you, I'd call again and speak to a different person. I wouldn't make this major financial decision on the opinion of one Sallie Mae employee.
If i were you, I'd call again and speak to a different person. I wouldn't make this major financial decision on the opinion of one Sallie Mae employee.
Posted on 12/14/12 at 8:50 am to TheOcean
quote:
Any chance of scooping up a private loan for less than 5%
My wife and I did, but we have a very special connection to a bank here in NOLA.
Posted on 12/14/12 at 8:52 pm to donRANDOMnumbers
Sounds like horseshite to me. I've had problems with sallie mae ever since graduating med school. I was able to use deferments and forbearance to not pay anything through residency/ fellowship (5 years). Tell her to talk to her program coordinator (basically a secretary for the residency program). Those women are wizards and know the ins and outs of dealing with sallie mae.
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