Pete:
I know this is a long and confusing question, but frankly, I’m confused. And I’m wondering if you can shed some light on this. Thanks again for all your help. I appreciate everything you do.
And it also only very goes that those fund that you had getting med university was indeed such loved ones, federal degree loans, and these weren’t entitled to public service loan forgiveness
Dr. Jim Dahle:
Do we know about this, Andrew? Yes. We know about this. We’ve been talking about this for months.
Plus it just thus goes that people loans that you got having med school have been these family unit members, government training money, that were not entitled to public-service loan forgiveness
Dr. Jim Dahle:
Yeah. So, give him the answer. What’s the scoop on this new PSLF waiver that goes through Halloween?
Andrew:
Yeah. Recently, this came out on e out and what this has done is it’s shaken up a lot of the world for public service loan forgiveness. And the reason why they’ve been able to do that is, in the event of a national emergency or war, essentially, the legislators can change up student loan law, albeit temporarily, which COVID has fit within that realm.
Andrew:
And so, essentially the payments that you have made, any payment, as long as you have qualifying employment should qualify. And you detailed one of the key steps is doing a direct federal consolidation. Because in the old rules, when you completed a consolidation, what it did is it erased all of your prior payment history. And we have run into this time and time again with so many clients that like you graduated med school in the 1990s or early 2000s.
Andrew:
Essentially, you got the short end of the stick, just because you borrowed before 2007, 2010, when a lot of the newer loans, these direct federal student loans, were starting to get issued.
In a nutshell, sure, the next thing is to over a primary government consolidation. Once one to experience, next through that application, you are going to need to look for a payment bundle, however, I’m just in case you already produced new 120 repayments. You don’t have to make any a lot more costs after which you can need certify your employment, fool around with a jobs qualification mode, after which one or two far more weeks commit, and then you should be able to get the instantaneous income tax-totally free loan forgiveness.
And it simply thus goes that people loans you had to possess med college or university was indeed this type of family relations, government training funds, that were not entitled to public service mortgage forgiveness
Dr. Jim Dahle:
Yeah, it’s awesome. It’s basically been expanded this year. Even people that didn’t meet the requirements in the program, when the program was introduced, it just got a whole lot more lenient. And that was actually president Biden taking advantage of the COVID emergency to put some emergency rules in place. Take advantage if you can.
And it simply very goes that those money you got having med college was basically these members of the family, federal education financing, and they just weren’t entitled to public service financing forgiveness
Dr. Jim Dahle:
All right. Our next question is from email, it’s actually a two-part question. The doc introduces it easy online payday loans in South Carolina. “I’m an academic physician about two and a half years out from training, definitely pursuing PSLF with about 100 qualified payments to date.”
And it also only thus goes that those fund which you had to have med university were such household members, government studies fund, and these were not eligible for public service mortgage forgiveness
Dr. Jim Dahle:
He has two questions. The first one, “In addition to funding retirement and a six-month emergency fund, I’ve been saving a PSLF side fund in a high yield savings account. My PSLF side fund will equal my med school debt burden, which is now $325,000 with over $120,000 in interest on top of $200,000 in principle.
And it also merely so goes that people financing that you had to possess med university was indeed such household members, federal degree funds, and they just weren’t entitled to public-service financing forgiveness
Dr. Jim Dahle:
I anticipate that at that time, my attending level monthly payments will be large enough to finally cover the accruing interest and that my debt won’t grow meaningfully in my final year, year and a half of qualified payments.
And it also just therefore goes that those finance that you had getting med college or university were such loved ones, government knowledge money, and they were not qualified to receive public-service mortgage forgiveness
Dr. Jim Dahle:
What do you recommend I do with the side fund during that time? I know a high yield savings account is the most risk-averse option. Do I just leave it there earning less than 1%? The rest of my personal investments are in low-cost index funds. When would you start adding some of those PSLF side fund monies into index funds too?” Why don’t you give your take on this Andrew, and then I’ll give mine?
