MtoM #32 - Pediatric Cardiac Intensivist Gets PSLF

This is the White Coat Investor podcast. Milestones to celebrating stories of success along the journey to financial freedom. Here is your host, Dr. Jim Dalle.

This is Milestones to Millionaire podcast number 32, achieving public service loan Forgiveness. Still not sure what to do with your student loans? Overwhelmed with how to tackle that giant debt in an ever changing political climate, the experts@studentloanadvice.com are here to help guide you through the best options to manage your loans. Our experienced staff have consulted on over $250 million in student loan debt, and the average studentloanadvice.com client has saved over $190,000. You will receive a customized student loan plan using the principles of the White Coat Investor. Get answers to all of your student loan questions, gain clarity about your financial future, and start down the right path toward financial freedom. But book a consult today@studentloanadvice.com you can do this, and the White Coat Investor can help. All right, we've got a great guest today. We're going to be talking about public service loan forgiveness. Let's get her on the line. All right, our guest today is Jen Gaunt. Welcome to the Milestones to Millionaire podcast.

Thank you for having me.

So how did you pay for your schooling?

So I paid for schooling almost entirely with student loans. I have a wife who was working at the time, and her salary was going to pay most of our living expenses. I was a non traditional student. I had worked for about eight years before I went to medical school. I started med school in my early 30s, and so we were kind of accustomed to having my salary to pay for our housing. We owned a home in the District of Columbia, and so it was difficult for us to maintain that same lifestyle without taking out student loans.

So what'd you end up owing when you got out?

I owed about $300,000. When I got out, 190 of that was federal and about 110 was in private loans.

Can you remember the first time you heard about public service loan forgiveness?

I remember. So I started Medical School in 2006, and I remember hearing about it, I think shortly after President Bush at the time had signed. Had signed that law in 2007. So either early 2000, late 2007, or early 2008, I heard about the program and kind of understood the four basic requirements to enroll in the program.

And when did you make a decision to kind of go for it?

Well, the decision was made for me essentially because during residency. Now, as you know, most residencies are nonprofit organizations. So as long As I had the right loan type and paid under the right income driven repayment plan, then all of my residency would count towards my 120 required payments. I did a four year residency in internal medicine, pediatrics, and then did a three year fellowship in pediatric critical care and then an additional extra year as a PEDS cardiac intensivist. So I had eight years of residency and fellowship training. And so it made a lot of sense. It was a no brainer basically to find an attending job that would qualify.

Awesome. So what was the end result? I mean, you made relatively small payments for eight or nine years. How much did you eventually have forgiven?

I had $246,000 forgiven.

So you came out with $190,000 in federal and you had $240,000 forgiven 10 years later?

Correct.

And how much do you think you actually paid toward your federal loans anyway?

So I actually kept very meticulous records about seven years in, in 2017 when PSLF, when the first round of people were eligible and I was hearing all of these stories about people who thought they had worked for qualifying institutions and then found out they didn't and weren't able to be forgiven. In 2017, I started going back into my records and making sure I had all of the documents and I did not have many of them and actually calculated how much I paid. I paid $60,639 over that 10 years.

Wow, this worked out better for you than almost anybody else that has gotten public service loan forgiveness. This is really incredible.

I think so.

So which IDR program were you in?

So I was in the income based repayment when I graduated in 2010. There were only two options. There was income contingent or income based. Payee and repay did not exist when I graduated and then I didn't qualify for them when they did come out because my loans were before 2007.

And do you remember what your payments were during residency?

I went back and looked. My earliest payments my intern year were $417. Throughout my training, they were as high as $586 a month. My first year of attending, when it was a mix of attending and fellow, was $1,130 and it would have gone up to 1,400 and then 1,600. But those last 15 or 18 months or so were under the CARES act, so I owed nothing during those months.

Boy, that timing couldn't have been better for you.

It worked out very well.

All right, so who was your servicer?

I had multiple servicers. I had Great Lakes initially Then I was transferred to Aspire and then Mohela. And finally in 2017, when I kind of realized that I needed to be more on top of things than I was, I transferred to Fedloan.

So what problems did you run into getting public service loan forgiveness? Was it smooth? Was it rocky? Did you spend 80 hours on the phone dealing with them or what happened?

So there were a number of nuances to the program that I didn't understand. So I recognized the four major criteria. And so after, after medical school graduation, I consolidated my loans into direct loans, but I didn't do that until my grace period was up. So I didn't start my payments until January of my intern year. And then I made my payments appropriately. But I didn't, I didn't recognize that I should have been submitting my employment certification forms yearly. And so I didn't submit my first one until 2017. And it took FedLoans about 18 months to get my accounts correct. So I called them about every six months and then suddenly one day they were correct.

Did you ever consider bagging the whole thing, refinancing the loans and paying them off?

I never considered that given my duration of training.

Yeah, you're still in training the whole time. So would you recommend public service loan forgiveness to others in similar situations to yours?

So I don't think anybody should count public service loan forgiveness out while they're in training. And I think that's the similar advice that you give because most residents and then fellows are going to qualify. And I didn't know I was going to be in training for eight years. At the beginning I thought I probably would specialize, but I didn't know what that duration would be. And so it made a lot of sense to do those payments during residency and then decide. And if at the three year mark you're going to do emergency medicine and work for private practice, then it makes sense to refinance. But I think don't count yourself out until you've kind of completed training and seen how much you've put into it.

And how much influence do you think the fact that you were going for public service loan forgiveness had on your job selection as an attending?

I asked at every interview I had whether they were, as you probably know, even at academic medical centers there could be. Some of the physician groups can be private. So I was not hesitating to ask when I went on my interviews because that was going to make or break a decision for me because I was so far into the program and it was such a Large amount of money in pediatric cardiac critical care. Most of those jobs are in academic medicine. And so the job that I wanted worked out to be a job that qualified. Several other jobs that I had been offered also qualified. So it wasn't too challenging for me.

Any tips to help the process go more smoothly for others?

So I think there's a couple of things that I think, especially medical students as they're about to graduate. One is that you should consolidate your loans as soon as you graduate medical school, as soon as your school has let the government know that you're no longer in school and start those payments right away. Don't go through that six month grace period where you don't make any payments. I didn't know that I could file my taxes my fourth year of medical school and then have $0 payments. I sent my pay stub to to the government when I was ready to start my income driven repayment. So file your taxes your fourth year of medical school so you can get $0 payments. I made about 125 payments, but only 120 counted because I missed some important correspondence. I had signed up for electronic correspondence and then I got busy and didn't check the account and it turned out I had missed an income driven repayment recertification and one time my bank account. I closed my bank account and forgot to change over my automatic debit. So as much as it is nice to save trees and not get those paper statements, I am much more in tune with what's happening when I receive something in the mail that tells me hey, you are lapsed on your payment or hey, you are due for your income driven driven payment recertification. So I would say don't sign up for the electronic statements or if you do, make sure you're checking your account every month. And then obviously you have to follow the other, you know, the other criteria of the plan. I think for some graduating med students, especially now as medical school is getting even more expensive, there are a lot of nuances to which repayment program you take. And so if you don't understand those nuances, it's probably useful to pay somebody for some advice, at least for just starting out to understand whether you should be in repay or pay or ibr.

Now how about your other loans? What's the plan for those?

So I was in forbearance on those loans through residency. Both of the private loan companies had allowed you for five years of training and so I went into repayment after five years paying the bare minimum on those. So by the time I finished fellowship, I owed about 150,000 on that 110, and I've aggressively paid it down since I finished fellowship three years ago. And I owe about 40,000 now. So I'm, I'm on the way to being loan free in the next year and a half or so.

Nice work. Well, congratulations on getting public service loan forgiveness, and thank you so much for coming on the podcast to share your stories with others. I know there's a lot of people, maybe not as much this year as last year and the year before that are wondering if anyone's ever going to get it. So it's awesome to be able to show some examples of people who have received public service loan forgiveness and it seems like as time goes on, having less and less hassle to get it. So congratulations to you and thank you so much.

Thanks for having me.

All right. I hope you enjoyed that interview with Dr. Gaunt. Boy, that couldn't have worked out any better. Long, long training period right into $0 payments with the student loan holiday. So, I mean, public service loan forgiveness, that's about as good as it gets. And, you know, so for those of you that are going to do a big, long fellowship, this is a great program. You know, you may not even have to work for a nonprofit for very many years in order to get public service loan forgiveness. So that has really worked out a lot of people. And it's going to be more and more and more, especially as we move into 2022, 2023, we're just going to be seeing all kinds of people we know getting public service loan forgiveness. Still not sure what to do with your student loans? Overwhelmed with how to tackle that giant debt in an ever changing political climate, the experts@studentloanadvice.com are here to help guide you through the best options to manage your loans. Our experienced staff have consulted on over $250 million in student loan debt, and the average studentloadvice.com client has over $190,000. You will receive a customized student loan plan using the principles of the White Coat investor. Get answers to all of your student loan questions, gain clarity about your financial future, and start down the right path toward financial freedom. Book a consult today@studentloanadvice.com you can do this and the White Coat Investor can help. Keep your head up, shoulders back. You've got this and we can help. We'll see you next time on the Milestones to Millionaire podcast.

My dad, your host, Dr. Dahl, is a practicing emergency physician, blogger, author, and podcaster. He is not a licensed accountant, attorney or financial advisor. So this podcast is for your entertainment and information only and should not be considered official personalized financial advice.