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Public Service Loan Forgiveness (PSLF)

PSLF may be the answer to effectively managing your Federal Student Loan Debt—but it’s not that simple!

Learning how to navigate student loan repayment and forgiveness programs is one of the first steps a young physician should take. Ideally, this should start in the final year of medical school or at the very beginning of residency.

We take the mystery out of PSLF and guide you to make informed decisions that build financial solutions. Our consultants will show you how to use PSLF most effectively and how to coordinate it within your personal financial plan. 

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Today, 80% of graduating medical students are faced with a staggering amount of school debt coupled with uncertainties regarding their future income. If you are among them, Pastore Financial Group will work with you to help relieve the anxiety over managing student debt while you begin a new career.

  • We partner with medical schools, hospitals, medical associations and other organizations that serve the needs of physicians; and we provide educational programs online and on site.
  • We help graduating medical students, residents and fellows determine if PSLF is a worthwhile strategy to pursue for successful loan forgiveness. Flexibility is built into the strategy if your career path should change.
  • When it comes time to graduate and select your first job, we help you evaluate offers and we are there to help you take advantage of your new benefits to make a smooth transition.

In 2007 Congress passed the College Cost Reduction Act putting Public Service Loan Forgiveness in effect. Unlike the older public service programs, this program was expanded to include employees of qualifying hospitals, public service entities, not for profits and government jobs. This meant that many residents and fellows in training could qualify to participate in the programs while in training and make payments based upon their lower income during that time frame. After making 120 qualifying, monthly payments, while being employed full time by a qualifying employer, the remaining qualifying loan balances are forgiven, tax free.

While in training, residents and fellows earn lower incomes than they will as attending physicians. Many of our resident and fellow clients earn between $50,000 - $65,000 per year depending upon where they work and upon what year they have completed in training. They could be in training at these lower income levels for anywhere from three to eight years or longer depending on their specialty.

We have seen cases where a resident, enlisted in a 3-year residency program, with $300,000 in school loans at 6.8% interest, and a future income of $160,000 in their field, could save as much as $300,000 in payments using PSLF versus deferring their loan through residency and paying it back over 10 years using standard level payments. (This outcome depends on many variables and is provided for illustrative purposes only.) 

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There are many moving parts that must be considered to make an informed decision about PSLF.  

The earlier you learn about PSLF and take the appropriate founding steps, the better your chances are for greater potential forgiveness—so it’s critical that you become knowledgeable now.

Your federal student loans have several repayment options, not all of which are eligible for PSLF, and each with different nuances, qualifying metrics, and payment calculations.  Here are some of the issues we can help you tackle:

  • Loan types, balances and borrowing time frames;
  • current and projected income;
  • household dynamics (marital and tax-filing status, spouse's income and student loan debt) and repayment options.  

After we gain an understanding of your entire financial picture, we can effectively guide you to make well-informed choices.

PSLF is a government program and is subject to change. Keeping this in mind, we provide strategies that set you up for successful forgiveness through PSLF while also providing you flexibility in case your career path or changes in the program could limit or eliminate your prospects for forgiveness. 

If, based on your circumstances, PSLF is not a great option for you, we can discuss alternative refinance, repayment, or forgiveness strategies that may still provide you with significant savings.

For most physicians, life is busy and free time is in short supply. With no financial obligation, you can find out if PSLF might be an option for you. Take 10 minutes to complete this confidential questionnaire and arrange for a brief, complimentary phone call assessment.

Our Confidential Assessment Questionnaire