Doctored Money Blog

SAVE plan “loophole”? Avoiding interest accumulation on Direct PLUS loans while in school

Direct Plus loans accumulate interest while in-school. But with the SAVE repayment plan, interest does NOT accumulate during repayment and if one doesn’t have income, loan payments under SAVE are not required. What if one were to opt-out of in-school status on the Direct PLUS loan and enter repayment voluntarily? Here’s how to eliminate interest accumulation while in school on your PLUS loans.

New payment plan "SAVE" - We've updated our calculators

As anyone with Direct student loans likely knows by now, the government has debuted a new payment plan called SAVE that will replace REPAYE. In addition, PAYE will be eliminated soon with borrowers having about a year left to opt into it.

SAVE is significantly better than the REPAYE plan it replaces. You can read about the changes at Ben White’s blog. But it “complicates” decisions for some. Those who had previously chosen PAYE now need to reevaluate whether the new SAVE plan is worth switching to.

Obviously, graduating medical students will need to choose a plan when payment restart. And many others who didn’t think about payment plans during the covid payment pause now need to reevaluate the strategy they had prior to covid.

We’ve updated our two main calculators to help with SAVE vs PAYE comparisons.

The first is our basic Income Driven Repayment Calculator. In addition to showing your payments for SAVE and PAYE, it calculates the maximum payment you’ll have under PAYE, as well as the income needed to reach this maximum. This PAYE “cap” on payments is now the only useful feature of PAYE compared to SAVE.

The second is our SAVE vs PAYE PSLF “Optimizer” tool. Despite the title, it’s useful even for those not seeking PSLF. This tool allows for 10-year projections of income and family size, allowing one to determine which plan will result in the best plan over time. It also illustrates SAVE’s enormous interest rate subsidies and calculates your effective interest rate.

Keep in mind that you should verify all calculations and never trust any one source. We have found errors in every online calculator we’ve tested at various times, including ours (and including at studentaid.gov).

Medical Education Costs Rise, Physician Salaries Stagnant - Updated!

A quick update on primary care wage non-growth compared to medical school costs jumps. Current students and young MDs are entering a very different environment than their older mentors. Is the system aware of this? Are students and residents prepared for this?

PSLF Limited-Time Waiver

The PSLF waiver is truly amazing. Yes, we are late to the party writing about it, but please check it out and share it with your friends. It could result in you (or a friend) being forgiven substantial amounts of money from your student loans.

If You Don't Know Whether a "Target Date" Mutual Fund is for You, It Is!

Choosing investments is much easier now that there are “Target Retirement” type investment choices readily available. You can choose ONE investment, in all of your accounts, and never have to do anything different, ever. Almost sounds too good to be true, right?

Side Income? You’re in the Right Place.

Did you have a side job in 2020? Are you considering one for 2021? If so, you’ll learn a ton in a very short time by reading our guide to Moonlighting and Self-Employment Income.

Many physicians, particularly trainees, often look for side jobs or moonlighting opportunities to help with student loans and low trainee salaries. If you simply take extra shifts with your employer, that income will be added to your pay, taxes withheld, and eventually reported on a W2

But if you do some extra work for an unrelated employer (regardless of the type of job) you may find yourself working not as an employee, but rather as an “independent contractor”. This means you are essentially self-employed, and thus responsible for self-employment taxes and possibly estimated quarterly tax payments on that extra income. Don’t be caught off guard and become a victim of Tax Shock. It takes much more than fluid boluses to recover from this type of shock!

Ten critical financial items that new 2021 Physicians need to handle...Right Now

Congratulations on matching! You have finally made it (almost) through medical school. Now it is on to your training and part of that training is going to be learning some financial essentials.

We have created a list of financial topics and actions you need to take ASAP to start things off on the right foot. These include things like: understanding your student loans, filing your taxes, consolidating your loans, learning about PSLF, making a budget, learning about investing and more. Check it out and share it with someone who needs the advice!

PSA: The "Loan Simulator" at Studentaid.gov is not accurate during this current no-interest forbearance period

Several loan payments amounts for various payment plans (e.g. IBR, PAYE, and ICR) depend not only on loan balance, but also on the loan interest rate. Currently, interest rates on all federal loans have been set to zero percent by the CARES act. Thus, if you are logged in while using the tool, the results will not be accurate because they assume your rates are zero percent. However, your actual loan interest rates are NOT zero percent.

Don't Choose A Federal Student Loan Repayment Plan Until You Watch This Short Video

The video below walks you through all the key features to consider when making a PAYE/REPAYE decision in consideration of PSLF. There are no convoluted tables and there is minimal text. There is also a catchy soundtrack recorded by the Doctored Money studio band. We believe this is the best PAYE vs REPAYE video on the internet, based on poll of Doctored Money volunteers. The fact that it took us dozens of hours to write, animate, record and render the video did not bias our opinion in the least.

Ten critical financial items that new 2020 Physicians need to handle Right Now

Congratulations on matching! You have finally made it (almost) through medical school. Now it is on to your training and part of that training is going to be learning some financial essentials.

No change to PSLF for existing borrowers

We know we are going to get lots of email about this, so we’ll just come right out with a quick post. The scary headlines concerning the elimination of Public Service Loan Forgiveness in President Trump’s new budget proposal does not apply to current borrowers.

Here’s what’s written in the proposal

“This package would simplify repayment for all new undergraduate borrowers regardless of occupation and create a pathway for expedited debt forgiveness after 15 years of payments instead of after 20 years under current law”.

The keyword here is “new”.

Lot’s of proposed changes to loans!

Now, there are LOTS of proposed changes to student loans, such as the elimination of subsidized loan, elimination or limitations on graduate loans, elimination of all but one Income Driven Repayment plan, etc. But our advice? Ignore this budget, for two reasons. First, if you are reading this page you likely are already in school or have finished, and these changes do not apply to you. But most important, the White House does not create the budget. Congress does. The chances that any of these proposals get enacted anytime soon are virtually zero, as it would require the current House and current Senate to agree. So even for future borrowers, it’s much more likely that the status quo will be preserved. For better or for worse (and you can decide for yourselves whether it’s “better” or “worse”).

Individualized Student Loan Analysis

We are excited to announce our newest service here at Doctored Money, an individualized student loan analysis! Check it out!

2019 Taxes for Interns, A Walkthrough

We’ve updated our tax pages to include taxes information for 2019. We have a walkthrough of taxes for interns, with a sample “1040” for a non-married intern. Check it out!

How will my loan payment change if I have a baby (or another baby)? A mini blog post for those considering creating a new mini human.

In 2020, each increase in your family size will decrease your payment by exactly $55.25 if your payment plan is either REPAYE or PAYE and $82.88 if on IBR, assuming no change to your AGI.

New 2020 Updates to our Withholding Calculator and W-4 Tutorial

Get all the info on our newly revised W-4 page, and be sure to check out our Withholding Calculator, which will allow you to determine, in advance, what amounts will be withheld from your paychecks based on your taxable salary if you fill out the 2020 W-4 in the most straightforward manner.

Review of White Coat "Investor's Financial Boot Camp" Book (Part 3)

This is the final part of a three part review, which covers the final three chapters of his book, followed by a critique of the design and layout. Here is Part 1 and Part 2 of the review.

Review of White Coat "Investor's Financial Boot Camp" Book (Part 2)

This is the second part of a three part review, and focuses on chapters 4 to 9 of the book. If you haven’t already read it, start with Part 1, which is here.

Review of White Coat Investor's "Financial Boot Camp" Book (Part 1)

Part 1 (of 3) of chapter by chapter commentary on White Coat Investor’s newest book.

Department of Education to (Maybe?) Conduct Fraud Review of Reported Income on Income Driven Student Loan Repayment Plans

Income certification by student loan borrowers on income driven repayment plans are likely to face additional scrutiny, whether prospectively or retrospectively. We discuss data and recommendations from a new report from the Government Accountability Office.

Residency Program Salaries Around the Country

Interested to know the salary for each residency program in the county? We were. So we made a list! But there are a LOT of programs, and the numbers were not always easy to find. Unless there are volunteers, last year’s data will be, uh, the last year.

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