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.
Plus it merely very happens that people finance that you got to possess med college or university was basically this type of household members, government degree finance, that just weren’t qualified to receive public service mortgage forgiveness
Dr. Jim Dahle:
Do we know about this, Andrew? Yes. We know about this. We’ve been talking about this for months.
Also it just therefore goes that those fund you had getting med school was basically these relatives, government degree money, that just weren’t entitled to public-service financing 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.
Basically, yes, the next phase would be to over an immediate federal consolidation. Shortly after you to experience, upcoming in that software, you’ll have to see a cost package, but I am whenever you currently made the fresh 120 money. You don’t need to make any even more payments right after which it is possible to need approve the a job, play with a work certification form, and then several more months commit, and after that you will be able to have the instantaneous tax-100 % free financing forgiveness.
Also it only therefore goes that those fund which you had getting med college or university was indeed these types of family, federal education funds, and these weren’t 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 only very goes that those finance you had having med school had been such family, government degree fund, and these just weren’t qualified to receive public-service loan forgiveness
Dr. Jim Dahle:
All right. Our next question is from email, it’s actually a two-part question. The doc introduces it. “I’m an academic physician about two and a half years out from training, definitely pursuing PSLF with about 100 qualified payments to date.”
Therefore only so payday loans kent wa goes that those funds you had having med college was indeed this type of members of the family, federal education funds, and these just weren’t eligible for public service loan 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 simply thus happens that people fund you had getting med college or university have been these relatives, federal studies financing, and they 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 merely so goes that people financing you got for med university was in fact these types of nearest and dearest, government education fund, and they were not entitled to public service financing 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?