Physician Assistant Student Loan Case Study | Student Loan Planner

We recently had a case study for a
physician assistant, Brian, who was getting married to his new wife Abby, and
Brian was making about $110,000 or so with about a $195,000 of student loan debt. And he loved his job, Brian had no intent of changing
it, he was working in a private practice setting and he was using the IBR program.
And the issue was that the IBR program was going to result in him paying off
his student loans, his $195,000 of student debt, in a
relatively quick amount of time in about twelve years.
Abby was making about $70,000 a year and when they got married they
could file their taxes separately and continue on IBR but then Brian would
have to pay a lot in tax penalties. Or they could switch to the Revised Pay As
You Earn Program. Well the problem with that, is that Revised Pay As You Earn
Program would have just resulted in them paying the loan mostly off over an even
more extended period of time. So this really didn’t result in Brian having a
lot of savings by using the government program. Instead, it made a lot more sense
for Brian to refinance his student loan down from a 6.5% rate
to about 5%. This will allow him to save thousands of dollars paying back his
loan with the lower interest cost that he’ll incur. So even though it’s a little
painful, this is showing a perfect illustration of our two big approaches
to student debt. You either want to be as aggressive as possible, or as passive as
possible paying back your loans. In the aggressive scenario, you want to try to
find every dollar available to pay back your debt as fast as possible and
refinancing whenever you can find a lower interest rate, picking up cashback bonuses along the way. And the passive scenario, is you’re
using using something like PSLF or you’re using loan forgiveness with the
government because the math makes sense to minimize your payments and get the
most forgiven. This is a great scenario for other physician assistants out there
that are thinking about how they would pay back their student debt. In general,
if you have a household debt to income ratio below 1.5 to 1, and you’re working
in the private sector then you do want to refinance your student loan debt and
just get rid of it. If you happen to have a debt to income ratio over 2 to 1,
then maybe you should go for a forgiveness approach. Try to maximize retirement and minimize your student loan payments. We make custom plans for
PAs who have a lot of student loan debt. Just click on any of the contact buttons
on our website and we’ll be happy to reach out to you and
let you know how we might be able to help.

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