Federal Student Loan Repayment to Resume – Where to Start
Federal Student Loans Entering Repayment in 2023
The recent approval of the debt ceiling has large implications for physicians with federal student loans. Previously paused loan repayment will resume starting August 30th, 2023, and will look different for those who were in repayment prior to March 2020 compared to those who have started their residency since July of that year.
For those who were already in a repayment plan, you will be contacted in July or August to re-opt into your plan. In the meantime, you should log in to studentaid.gov to confirm your contact details and loan servicer (this may have changed during the forbearance). You should then contact your loan servicer to confirm when your income re-verification date will be.
For those entering practice this year (2023), understanding your repayment plan & re-verification date is essential to determine which income documentation will be used to update your payments in 2024.
For current PGY1-3 residents and incoming interns, you are likely entering repayment for the first time. This includes enrolling in an income-driven repayment plan and understanding what your monthly payment will be. There are financial & date-related qualifications for Income Based Repayment (IBR) and Pay As You Earn (PAYE). Part of the pending legislation to improve Revised Pay As You Earn (REPAYE) would remove protections within IBR/PAYE for married individuals and those pursuing Public Service Loan Forgiveness (PSLF).
Before enrolling in a repayment plan, you will want to confirm your eligibility and whether you have Federal Direct Loans instead of FFEL, Federal Perkins, or Parent PLUS loans. This indicates whether a Direct Consolidation is appropriate before the end of Summer. Your loan balance, whether you are married, whether your spouse has federal student loans, and what state you live in are all initial factors to consider in addition to your career path and length of training.
For many borrowers re-entering payment, several of these factors may have changed as you’ve progressed through training. Connecting with a professional can help confirm you are on track and what to expect as a monthly payment in the future.
For those entering repayment for the first time, we understand it is daunting, and many of you are swamped with residency/fellowship responsibilities. Burying your head in the sand, doing whatever a colleague is doing without considering your exact circumstances, or simply defaulting to the new income-driven repayment plan can have long-term consequences in qualifying for loan forgiveness and/or limiting your balance growth during training.
Our student loan specialist Kyle Flynn, CSLP, is happy to set up a no-obligation, introductory call to answer questions and help navigate the most appropriate loan repayment strategy for you.
Kyle is a registered representative and investment advisor representative of Securian Financial Services, Inc. 5724690/DOFU 6-2023