What To Do When Your Physician Employer Doesn’t Qualify For PSLF | Student Loan Planner

What if you work at Kaiser
Permanente Health System or just some other
for-profit hospital group, or even just a for-profit physicians group because you’re not allowed
to be employed directly through the not-for-profit health system because of some weird state law? What do you do when
you have $200,000 or $300,000 of student loan debt for med school, or from any graduate
program for that matter, and you’re trying to qualify for Public Service Loan Forgiveness, where you get your loans forgiven tax-free after 10 years of income-driven payments? This is a big issue for physicians, especially those living
in Texas and California, where there’s state rules that regulate who can employ physicians directly. Now, something to think about is the Aim Higher Act in Congress, actually proposed adding
physicians in the Kaiser system and other systems where they’re employed through these indirect
employment agreements because of state rules. This act that House
Democrats tried to pass would have actually included
all those Kaiser physicians in PSLF, retroactively. So, if you have more than $200,000 or $300,000 of student loan debt from med school, I would be very careful refinancing it and paying it all back, given that there’s talk
about making loans eligible for PSLF with this kind
of grandfathering in of all these Kaiser Permanente physicians, who were sort of left out in the cold. So, think about that for sure. Now, also you might not be aware that in states like California and Texas that are community property states, you can take advantage of something called the Breadwinner Loophole, where you file taxes separately, equally distribute your income, and you pay 10% of half
of your household income with minimal tax penalties
and you can pay for 20 years instead of 10 years under something like the Pay As You Earn Program, and then pay income taxes
on the forgiven balance. That can, in a lot of cases,
actually be very, very cheap, especially if you’re a physician married to a stay-at-home spouse. And it also keeps your options open in case Congress does
allow Kaiser physicians to receive PSLF at some point. So, just be very careful
that if your long-term plan is to work at a seemingly
non-for-profit health center that just happens to not
qualify for whatever reason. You wanna be real careful refinancing because you cannot undo it. If you have a lot of med school debt, and you’re kind of unsure about whether or not you should refinance because of this weird situation that you fall in, we’ve advised a lot of
Kaiser Permanente physicians, and also physicians in a lot of other kind of health systems, reach out to us, check out what we offer, studentloanplanner.com/help. You can also check out the post below and leave a comment and share
what you’re going through, trying to get PSLF in one of
these weird health systems that don’t qualify for
these strange reasons.

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