If you are quite sure that you will not go for PSLF, why not lower your interest rate TODAY and benefit form the savings now until the day you pay it off?
Reasons you decided to turn away from PSLF my include,
- PSLF severely limits one’s job options. Not only do you need to work for 503 organizations, but also you need to be a W2 employee, instead of a 1099 contractor. (Most high paying doctors are contractors and not employees.)
- To be a true 503 W2 employee, you are likely to take a 25% pay cut vs. private jobs.
- 40% of our cohort are competing for these PSLF qualifying jobs. The greater supply of workers wanting these non profit jobs over the smaller supply of said jobs will surely drive the equilibrium price (ie. your compensation) DOWN.
- Government is talking about capping the forgiveness (recently to about 57k, which won’t even cover the interest accrued on the Cost of attendance during medical school.)
Now if you are pretty sure PSLF isn’t for you, what are you doing to pay off your student loan ASAP?
- increase your income
- decrease your spending
- decrease your interest rate
- take advantage of 0% interest rate credit card offers
Do all of them to the best of your abilities.
But of the 4 things to do above, decreasing your interest rate is easier than ever. Less than a year ago, I was NOT able to to refinance my student loans because the refinance products were only meant for attending doctors.
DRB, is now offering refinancing student loans to residents and fellows. One can lower their interest rate to as low as 3.5% for fixed rate and even lower for variable rate. Once your loan closes, all your 400k will be compounding at half of your current lousy 6.8% interest rate (7% for consolidated fed loans).
I often think about opportunity cost. For instance, do I spend one hour with my family, or one hour tutoring (which makes me a couple hundred dollars), or do I spend one hour studying radiology, or do I write a blog post… In the grand scheme of things, the few hours it may take to get student loan refinanced is definitely the biggest bang of the buck.
Use this link to start an obligation free student loan refinancing application with DRB. When your loan closes (the day you start 2% or 3.5% or a rate lower than 6.8% interest rate), you will get a $300 bonus and DFD will get a referral fee as well.
Why not lower your student loan interest rate and start saving 10’s of 1000’s until you pay it off?