Thread by @ryanwday

It finally happened, #PSLF came through and my loans have been discharged. I want to go through some basic steps and common pitfalls for medical students and residents considering this route! A 🧵

First where did I start at?

Coming out of medical school I had $414,141 in student loans. And you can see here at the time of forgiveness the total was $381,227. Your first step once you graduate is taking an inventory of your loans and deciding on your training path.

You essentially have two choices, and it's best to decide on a route up front.

1. Don't pursue PSLF. In this case, you want to look at non-government consolidation. Several companies offer significantly lower interest rates than the government and even cash for signing up.

2. Pursue PSLF. You have to take a look at your proposed future path. My path included 6 years of residency and 4 years of fellowship. So it naturally fell into the 10 year plan for PSLF. Keep in mind, even if in training - this will still limit your options.

You will need to prioritize working for government institutions, non-profits, and in the USA. For transplant fellowship, I really liked the Toronto program, but in order to make this plan work, I ended up ranking them lower than I otherwise would have.

Once you've decided on PSLF there are several steps you should take immediately.

1. Make sure all of your loans are eligible. Only "Direct" loans are inherently eligible at the time they originate. Direct loans can be subsidized, unsubsidized, or graduate plus.

Thankfully, there is an easy way to determine which loans are eligible. The PSLF Help Tool is awesome.

studentaid.gov/pslf/

You will need to login to use the tool, you will add your employers and it will generate a document to be signed by them.

Before the documents to sign come up, the first page will explain which loans are eligible, which ones aren't and how to consolidate your non-eligible loans to make them eligible. You want to do this BEFORE you start making payments or have eligible months pass in the pause.

This way all of your qualifying months will apply to all of your loan. The government waiver period has passed and there is no longer eligible for previous payments to count on newly consolidated loans.

The next step is filling out the attached forms with employer signatures every year while in your program. You should also fill out a new form anytime you switch jobs (residency, fellowship, etc.). You will be able to see updated counts on the PSLF servicer website (Mohela).

Your next job once your payment months are counting towards loan forgiveness is to minimize your payments. Making 10 years of monthly payments on higher interest loans, still means paying quite a bit. Over the life of my loans I paid $63,856 and that's with time on COVID pause.

There are two main strategies to minimizing payments:

1. Enter an income drive repayment plan. There are several and they need to be certified yearly (set a calendar reminder!). To figure out which plan pays the least use the loan simulator.

studentaid.gov/loan-simulator/

2. Count as little income as possible towards an income driven repayment plan's view of your income. For many married couples, this will mean the savings in an IDR plan outweighs the tax benefits from filing taxes jointly and you will need to file separately.

If your spouse has a high income, this can be especially detrimental to the amount your paying each month if you file jointly.

Once you've minimized the amount your paying, the next step is to make 120 on-time monthly payments. Once you reach 120, forgiveness is automatic.

But it can take up to 90 business days to be processed, receive notifications, and see balances come to $0.

The amount forgiven is not considered income for federal taxes, certain states do consider it income for state taxes - be aware and look into this potential bill.

Ultimately it's incredibly satisfying to finally get this notification and see the plan come together! At any step in the process where things don't seem right, be proactive and call the loan servicer. There's a lot they can do to help move the process along and keep you on path.