Introduction

Attention Early-Career Physicians!

 

Navigating student loan planning can be overwhelming, but approaching it strategically can lead to significant savings—potentially tens or hundreds of thousands on your student loans.

 

Don’t delay this important step. Ideally, you should start planning for your student loans right after matching into your residency program. However, if you find yourself a bit later in your journey, this guide is here to assist you in understanding Direct Loan Consolidation and determining if it’s the right move for you.

 

Believe it or not, achieving financial efficiency with your student loans is possible with a bit of intentionality. You can do it!

 

This comprehensive guide will provide you with simple, step-by-step instructions on what Direct Loan Consolidation entails and how consolidating the right way can result in substantial savings.

 

Let’s embark on this journey together!

 

Introduction

Attention Early-Career Physicians!

 

Navigating student loan planning can be overwhelming, but approaching it strategically can lead to significant savings—potentially tens or hundreds of thousands on your student loans.

 

Don’t delay this important step. Ideally, you should start planning for your student loans right after matching into your residency program. However, if you find yourself a bit later in your journey, this guide is here to assist you in understanding Direct Loan Consolidation and determining if it’s the right move for you.

 

Believe it or not, achieving financial efficiency with your student loans is possible with a bit of intentionality. You can do it!

 

This comprehensive guide will provide you with simple, step-by-step instructions on what Direct Loan Consolidation entails and how consolidating the right way can result in substantial savings.

 

Let’s embark on this journey together!

 

Subscribe to The Dream Bigger – Physician Edition Newsetter

A weekly newsletter designed for early-career physicians and anyone looking to enhance their financial well-being.

 

Discover helpful tips, strategies, and insights to dream bigger and take control of your financial future. 🥼

 

Get student loan updates, money-saving tips, and financial strategies – all delivered to your inbox.

 

    Subscribe to The Dream Bigger – Physician Edition Newsetter

    A weekly newsletter designed for early-career physicians and anyone looking to enhance their financial well-being.

     

    Discover helpful tips, strategies, and insights to dream bigger and take control of your financial future. 🥼

     

    Get student loan updates, money-saving tips, and financial strategies – all delivered to your inbox.

     

      Direct Loan Consolidation

      Consolidating your student loans can be a game-changer for early-career physicians.

       

      Direct Loan Consolidation simplifies managing your student loans by merging two or more of your loans into one federal loan with a single weighted-average interest rate.

       

      If you have both subsidized and unsubsidized loans, you’ll end up with one consolidated loan for each type (2 total).

       

      Additionally, it grants eligibility for Income-Driven Repayment plans to loans that would not normally qualify (assuming they are included in your consolidation).

        

      Eligible Student Loans for Direct Consolidation:

        

        • Direct Subsidized Loans

        • Direct Unsubsidized Loans

        • Subsidized Federal Stafford Loans

        • Unsubsidized Federal Stafford Loans

        • Direct PLUS Loans

        • FFEL PLUS Loans

        • Supplemental Loans For Students (SLS)

        • Federal Perkins Loans

        • Federal Nursing Loans

        • Health Education Assistance Loans

        • Some existing consolidation loans

      Note: Private student loans cannot be consolidated with federal loans. While private student loans can be consolidated among themselves through refinancing, it’s super important most borrowers avoid refinancing federal student loans into private ones. Doing so results in the loss of all federal protections and benefits associated with federal student loans. Only consider refinancing private student loans with each other if it will result in a lower monthly payment and interest rate.

       

        • Federal Direct Consolidation –> Good

        • Refinancing Federal Loans to Private Loans –> Bad in most circumstances

       

      Direct Loan Consolidation

      Consolidating your student loans can be a game-changer for early-career physicians.

       

      Direct Loan Consolidation simplifies managing your student loans by merging two or more of your loans into one federal loan with a single weighted-average interest rate.

       

      If you have both subsidized and unsubsidized loans, you’ll end up with one consolidated loan for each type (2 total).

       

      Additionally, it grants eligibility for Income-Driven Repayment plans to loans that would not normally qualify (assuming they are included in your consolidation).

        

      Eligible Student Loans for Direct Consolidation:

        

      • Direct Subsidized Loans

      • Direct Unsubsidized Loans

      • Subsidized Federal Stafford Loans

      • Unsubsidized Federal Stafford Loans

      • Direct PLUS Loans

      • FFEL PLUS Loans

      • Supplemental Loans For Students (SLS)

      • Federal Perkins Loans

      • Federal Nursing Loans

      • Health Education Assistance Loans

      • Some existing consolidation loans

      Note: Private student loans cannot be consolidated with federal loans. While private student loans can be consolidated among themselves through refinancing, it’s super important most borrowers avoid refinancing federal student loans into private ones. Doing so results in the loss of all federal protections and benefits associated with federal student loans. Only consider refinancing private student loans with each other if it will result in a lower monthly payment and interest rate.

       

      • Federal Direct Consolidation –> Good

      • Refinancing Federal Loans to Private Loans –> Bad in most circumstances

       

      When Can I Consolidate My Loans?

      You are eligible to consolidate your loans after you graduate medical school, leave school or drop below half-time enrollment.

       

      Additionally, your loans must be in “In Grace Period” or “In Repayment” status.

       

      You can’t consolidate loans that are in “In School” status.

       

      When Can I Consolidate My Loans?

      You are eligible to consolidate your loans after you graduate medical school, leave school or drop below half-time enrollment.

       

      Additionally, your loans must be in “In Grace Period” or “In Repayment” status.

       

      You can’t consolidate loans that are in “In School” status.

       

      The Pros and Cons of Student Loan Consolidation

      Pros of Consolidation:

       

        • Lower Monthly Payments: Consolidation provides access to Income-Driven Repayment plans, allowing you to significantly reduce your monthly student loan payment.

       

        • Access to Income-Driven Repayment Plans/Forgiveness Options: FFEL loans and Federal Perkins loans, which usually do not qualify for IDR plans or IDR/PSLF forgiveness, become eligible through direct loan consolidation.

       

        • One Loan with One Monthly Bill: Simplify the management and repayment of your loans by consolidating multiple student loans into one.

      Cons of Consolidation:

       

        • More Interest: When consolidating loans, your interest capitalizes, adding to your student loan balance.

       

        • Loss of Certain Borrower Benefits: Consolidating loans other than Direct Loans might result in losing borrower benefits like interest rate discounts or loan cancellation benefits. If you are working towards specific benefits tied to current loans, assess whether consolidation would jeopardize those benefits. You can choose not to include all eligible loans when applying for a Direct Consolidation Loan.

       

      The Pros and Cons of Student Loan Consolidation

      Pros of Consolidation:

       

      • Lower Monthly Payments: Consolidation provides access to Income-Driven Repayment plans, allowing you to significantly reduce your monthly student loan payment.

       

      • Access to Income-Driven Repayment Plans/Forgiveness Options: FFEL loans and Federal Perkins loans, which usually do not qualify for IDR plans or IDR/PSLF forgiveness, become eligible through direct loan consolidation.

       

      • One Loan with One Monthly Bill: Simplify the management and repayment of your loans by consolidating multiple student loans into one.

      Cons of Consolidation:

       

      • More Interest: When consolidating loans, your interest capitalizes, adding to your student loan balance.

       

      • Loss of Certain Borrower Benefits: Consolidating loans other than Direct Loans might result in losing borrower benefits like interest rate discounts or loan cancellation benefits. If you are working towards specific benefits tied to current loans, assess whether consolidation would jeopardize those benefits. You can choose not to include all eligible loans when applying for a Direct Consolidation Loan.

       

      What Happens After Direct Loan Consolidation?

      Interest Capitalizes:

       

        • Imagine your federal student loan payment as having two buckets. In Bucket 1, you have your student loan balance. In Bucket 2, there’s nothing, but it’s there to catch the interest payments you accrue while in medical school.

        • During medical school, Bucket 1 (your loan balance) remains the same. However, every day, the interest you owe is directed into Bucket 2. Here’s the important part: when you’re in school, your annual interest payment is calculated based on the value in Bucket 1, not the interest in Bucket 2.

        • Now, when you consolidate your student loans, any interest balance in Bucket 2 gets added to your student loan balance in Bucket 1. From that point on, your payment is calculated based on your total student loan balance, including the accrued interest.

       

      When Student Loan Payments Begin (If Currently in “In Grace Period” Status):

       

        • While you’re in medical school, your student loans are in the “In School” status, which means you’re not required to make any payments during this period.

        • After graduation, the status shifts from “In School” to “In Grace Period” status, providing you with a 6-month window during which you are still not required to make any payments on your student loans.

        • However, once your consolidation application is processed, your student loans move into “In Repayment” status, and you are required to start making payments on your student loans.

        • If you are a recent medical school graduate and in the “In Grace Period” status, consolidation marks the beginning of your student loan payments.

        

      When Student Loan Payments Begin (If Currently in “In Repayment” Status):

       

        • After completing Direct Loan Consolidation, if you have both subsidized and unsubsidized loans, you’ll end up with one direct consolidated loan for each type. Your loan payments will start within 60 days after the disbursement (paid out) of the loan. Your loan servicer will inform you about the due date of your first payment.

       

      What Happens After Direct Loan Consolidation?

      Interest Capitalizes:

       

      • Imagine your federal student loan payment as having two buckets. In Bucket 1, you have your student loan balance. In Bucket 2, there’s nothing, but it’s there to catch the interest payments you accrue while in medical school.

      • During medical school, Bucket 1 (your loan balance) remains the same. However, every day, the interest you owe is directed into Bucket 2. Here’s the important part: when you’re in school, your annual interest payment is calculated based on the value in Bucket 1, not the interest in Bucket 2.

      • Now, when you consolidate your student loans, any interest balance in Bucket 2 gets added to your student loan balance in Bucket 1. From that point on, your payment is calculated based on your total student loan balance, including the accrued interest.

       

      When Student Loan Payments Begin (If Currently in “In Grace Period” Status):

       

      • While you’re in medical school, your student loans are in the “In School” status, which means you’re not required to make any payments during this period.

      • After graduation, the status shifts from “In School” to “In Grace Period” status, providing you with a 6-month window during which you are still not required to make any payments on your student loans.

      • However, once your consolidation application is processed, your student loans move into “In Repayment” status, and you are required to start making payments on your student loans.

      • If you are a recent medical school graduate and in the “In Grace Period” status, consolidation marks the beginning of your student loan payments.

        

      When Student Loan Payments Begin (If Currently in “In Repayment” Status):

       

      • After completing Direct Loan Consolidation, if you have both subsidized and unsubsidized loans, you’ll end up with one direct consolidated loan for each type. Your loan payments will start within 60 days after the disbursement (paid out) of the loan. Your loan servicer will inform you about the due date of your first payment.

       

      Can You Lower Your Monthly Payment Without Consolidating?

      Yes!

       

      Direct Loan Consolidation is not the only option to reduce your monthly payments.

       

      You can still qualify for an Income-Driven Repayment (IDR) plan to lower your monthly payments.

       

      However, note that some FFEL loans are only eligible on IBR, and Federal Perkins loans need to be consolidated to enroll in an IDR plan.

       

      Can You Lower Your Monthly Payment Without Consolidating?

      Yes!

       

      Direct Loan Consolidation is not the only option to reduce your monthly payments.

       

      You can still qualify for an Income-Driven Repayment (IDR) plan to lower your monthly payments.

       

      However, note that some FFEL loans are only eligible on IBR, and Federal Perkins loans need to be consolidated to enroll in an IDR plan.

       

      What Is An Ideal Consolidation Strategy?

      Strategy for Direct Consolidation: 

       

      After medical school, prioritize consolidating your student loans immediately and enroll in an Income-Driven Repayment plan.

       

      This transition moves your loans from the 6-month grace period to “In Repayment” status, triggering the start of your student loan payments.

       

      This strategy allows for more payments into Income-Driven Repayment (IDR) when your income is lower.

       

      Why consider this strategy? 

       

      If forgiveness is your goal, keeping payments small is important.

       

      In an Income-Driven Repayment plan, your monthly payment is based on income and family size.

       

      To optimize forgiveness, making more payments into IDR when your income is lowest (during residency) is a winning strategy.

       

      Consolidating your student loans and ending the 6-month grace period enables you to start making payments earlier, resulting in fewer payments at your attending salary.

       

      What Is An Ideal Consolidation Strategy?

      Strategy for Direct Consolidation: 

       

      After medical school, prioritize consolidating your student loans immediately and enroll in an Income-Driven Repayment plan.

       

      This transition moves your loans from the 6-month grace period to “In Repayment” status, triggering the start of your student loan payments.

       

      This strategy allows for more payments into Income-Driven Repayment (IDR) when your income is lower.

       

      Why consider this strategy? 

       

      If forgiveness is your goal, keeping payments small is important.

       

      In an Income-Driven Repayment plan, your monthly payment is based on income and family size.

       

      To optimize forgiveness, making more payments into IDR when your income is lowest (during residency) is a winning strategy.

       

      Consolidating your student loans and ending the 6-month grace period enables you to start making payments earlier, resulting in fewer payments at your attending salary.

       

      How to Apply: Direct Loan Consolidation Application

      To initiate the consolidation application, go to the Direct Loan Consolidation Application.

       

      Log in using your FSA ID. If you don’t have an FSA ID, follow the prompt to “Create an Account.”

        

      studentaid.gov login

      How to Apply: Direct Loan Consolidation Application

      To initiate the consolidation application, go to the Direct Loan Consolidation Application.

       

      Log in using your FSA ID. If you don’t have an FSA ID, follow the prompt to “Create an Account.”

        

      studentaid.gov login

      Section 1: Personal Information – Borrower Information

      Verify your personal information for accuracy. If any updates are needed, click the hyperlink at the bottom labeled “visit your Account Settings” to make the necessary changes.

       

      Borrower Information

      Section 1: Personal Information – Borrower Information

      Verify your personal information for accuracy. If any updates are needed, click the hyperlink at the bottom labeled “visit your Account Settings” to make the necessary changes.

       

      Borrower Information

      Section 1: Personal Information – Contact Information

      Verify your contact information for accuracy.

       

      If updates are needed, click the hyperlink at the bottom labeled “visit your Account Settings” to make necessary changes.

        

      Keeping your contact information, including address and email, up to date is crucial.

       

      Update your details during transitions from medical school to training and training to fellowship.

       

      Staying informed about your student loans is essential for effective planning.

       

      Any updates regarding your student loans will be communicated through email and, if necessary, mail.

       

      Ensure this information is current to stay well-informed.

       

      Contact Information

      Section 1: Personal Information – Contact Information

      Verify your contact information for accuracy.

       

      If updates are needed, click the hyperlink at the bottom labeled “visit your Account Settings” to make necessary changes.

        

      Keeping your contact information, including address and email, up to date is crucial.

       

      Update your details during transitions from medical school to training and training to fellowship.

       

      Staying informed about your student loans is essential for effective planning.

       

      Any updates regarding your student loans will be communicated through email and, if necessary, mail.

       

      Ensure this information is current to stay well-informed.

       

      Contact Information

      Section 1: Personal Information – Driver’s License Information

      This section is optional, and you may enter your Driver’s License Information as you see fit.

       

      Driver's License Information

      Section 1: Personal Information – Driver’s License Information

      This section is optional, and you may enter your Driver’s License Information as you see fit.

       

      Driver's License Information

      Section 1: Personal Information – Employment Information

      Complete this section by entering your employer information.

       

      If you’ve recently graduated from medical school, your employer will be your residency program.

       

      Driver's License Information

      Section 1: Personal Information – Employment Information

      Complete this section by entering your employer information.

       

      If you’ve recently graduated from medical school, your employer will be your residency program.

       

      Driver's License Information

      Section 2: Loans and Servicer – Select Loans to Consolidate

      This is an important section that requires attention.

       

      Here, you will select the loans you want to consolidate.

       

      Remember, consolidation combines loans with different interest rates into one loan with a single average interest rate.

        

      For most physicians, including all your student loans in the consolidation is recommended.

       

      If there are specific loans you wish to exclude, leave them unchecked.

       

      Ensure that all your student loans intended for consolidation are selected.

       

      Double-check to avoid unintentionally excluding any loans.

       

      Select Loans to Consolidate

      Section 2: Loans and Servicer – Select Loans to Consolidate

      This is an important section that requires attention.

       

      Here, you will select the loans you want to consolidate.

       

      Remember, consolidation combines loans with different interest rates into one loan with a single average interest rate.

        

      For most physicians, including all your student loans in the consolidation is recommended.

       

      If there are specific loans you wish to exclude, leave them unchecked.

       

      Ensure that all your student loans intended for consolidation are selected.

       

      Double-check to avoid unintentionally excluding any loans.

       

      Select Loans to Consolidate

      Section 2: Loans and Servicer – Add a Federal Student Loan

      In case a loan was inadvertently excluded from the consolidation selection, you can manually add it in this section.

       

      Provide the necessary details as accurately as possible.

       

      Remember, private student loans cannot be consolidated with federal student loans in this process.

       

      Only federal student loans are eligible for consolidation.

       

      If you have private student loans, you might want to explore refinancing options for a potentially lower interest rate and student loan payment, but that is not part of this consolidation process.

       

      Add a Federal Student Loan

      Section 2: Loans and Servicer – Add a Federal Student Loan

      In case a loan was inadvertently excluded from the consolidation selection, you can manually add it in this section.

       

      Provide the necessary details as accurately as possible.

       

      Remember, private student loans cannot be consolidated with federal student loans in this process.

       

      Only federal student loans are eligible for consolidation.

       

      If you have private student loans, you might want to explore refinancing options for a potentially lower interest rate and student loan payment, but that is not part of this consolidation process.

       

      Add a Federal Student Loan

      Section 2: Loans and Servicer – Your New Loan

      In this screen, you will see your new loan amount and interest rate.

       

      Note, when you consolidate, your interest rate will be slightly higher than keeping each loan unconsolidated.

       

      This is because your average interest rate is rounded up to the nearest one-eighth of one percent.

       

      Add a Federal Student Loan

      Section 2: Loans and Servicer – Your New Loan

      In this screen, you will see your new loan amount and interest rate.

       

      Note, when you consolidate, your interest rate will be slightly higher than keeping each loan unconsolidated.

       

      This is because your average interest rate is rounded up to the nearest one-eighth of one percent.

       

      Add a Federal Student Loan

      Section 2: Loans and Servicer – Loans in a Grace Period

      If you are a recent medical school grad, during medical school, your student loans were in a status called “In School” status.

       

      Very shortly after graduation, your loans will flip into an “In Grace Period” status.

       

      This is a 6-month period where you still are not required to make any payments on your student loans.

       

      In this step, you get the opportunity to delay processing until closer to the end of your 6-month grace period.

       

      However, for almost every physician consolidating their student loans, it is advised to select “Do Not Delay” processing.

       

      Loans in Grace Period

      Section 2: Loans and Servicer – Loans in a Grace Period

      If you are a recent medical school grad, during medical school, your student loans were in a status called “In School” status.

       

      Very shortly after graduation, your loans will flip into an “In Grace Period” status.

       

      This is a 6-month period where you still are not required to make any payments on your student loans.

       

      In this step, you get the opportunity to delay processing until closer to the end of your 6-month grace period.

       

      However, for almost every physician consolidating their student loans, it is advised to select “Do Not Delay” processing.

       

      Loans in Grace Period

      Section 2: Loans and Servicer – Select a Federal Loan Servicer (PSLF)

      For many of you, it is early in your medical journey, and you may not have a sense of what type of hospital you will work at post-training.

       

      Depending on the track you end up on, you may be working for a non-profit, 501(c)(3), or a for-profit hospital.

       

      Regardless of which route you choose, almost everyone in residency is part of a non-profit 501(c)(3).

       

      This means you are eligible for Public Service Loan Forgiveness (PSLF).

        

      You can always apply for PSLF at any point in the future.

       

      However, if you are 100% positive or there is any chance you may work for a non-profit, 501(c)(3), select “Yes” for the consolidation’s purposes of PSLF. You are not required to end up pursuing PSLF.

        

      When you do so, your loan servicer will automatically default to Mohela. They are the student loan servicer that handles all PSLF student loans.

       

      Select Federal Loan Servicer

      Section 2: Loans and Servicer – Select a Federal Loan Servicer (PSLF)

      For many of you, it is early in your medical journey, and you may not have a sense of what type of hospital you will work at post-training.

       

      Depending on the track you end up on, you may be working for a non-profit, 501(c)(3), or a for-profit hospital.

       

      Regardless of which route you choose, almost everyone in residency is part of a non-profit 501(c)(3).

       

      This means you are eligible for Public Service Loan Forgiveness (PSLF).

        

      You can always apply for PSLF at any point in the future.

       

      However, if you are 100% positive or there is any chance you may work for a non-profit, 501(c)(3), select “Yes” for the consolidation’s purposes of PSLF. You are not required to end up pursuing PSLF.

        

      When you do so, your loan servicer will automatically default to Mohela. They are the student loan servicer that handles all PSLF student loans.

       

      Select Federal Loan Servicer

      Section 2: Loans and Servicer – Select a Federal Loan Servicer (Not Going for PSLF)

      If you are certain that you will not be working for a non-profit 501(c)(3), it doesn’t really matter which student loan servicer you choose.

       

      They are all quite comparable.

       

      With all the changes in student loans over the last couple of years, each servicer has its strengths and weaknesses, but they are all more or less the same.

       

      While each servicer functions similarly, if this decision is important to you, it is recommended that you conduct your own research.

       

      Select Federal Loan Servicer No PSLF

      Section 2: Loans and Servicer – Select a Federal Loan Servicer (Not Going for PSLF)

      If you are certain that you will not be working for a non-profit 501(c)(3), it doesn’t really matter which student loan servicer you choose.

       

      They are all quite comparable.

       

      With all the changes in student loans over the last couple of years, each servicer has its strengths and weaknesses, but they are all more or less the same.

       

      While each servicer functions similarly, if this decision is important to you, it is recommended that you conduct your own research.

       

      Select Federal Loan Servicer No PSLF

      Section 3: Select Repayment Plans – Select Your Repayment Plan

      This step in student loans often causes significant stress for physicians.

       

      Here, you will select your repayment plan.

       

      Nearly every physician will find value in opting for an income-driven repayment plan during their training, as it offers the lowest possible payment.

       

      The specific income-driven repayment plan will be chosen in a subsequent step.

       

      Select Federal Loan Servicer No PSLF

      Section 3: Select Repayment Plans – Select Your Repayment Plan

      This step in student loans often causes significant stress for physicians.

       

      Here, you will select your repayment plan.

       

      Nearly every physician will find value in opting for an income-driven repayment plan during their training, as it offers the lowest possible payment.

       

      The specific income-driven repayment plan will be chosen in a subsequent step.

       

      Select Federal Loan Servicer No PSLF

      Section 3: Select Repayment Plans – Authorization To Retrieve Federal Tax Information

      When enrolling in an Income-Driven Repayment plan, you must annually recertify your income, family size, and employment information on your IDR Anniversary date.

       

      This step provides the option to link your Internal Revenue Service (IRS) data with the Department of Education.

       

      Instead of manually submitting your income, family size, and employment information each year, this process calculates your monthly payment using your most recent tax return, offering a quick and easy recertification method.

       

      Linking your information using the IRS Data Retrieval Tool is the easiest way for DIY student loan planning.

       

      However, it might pose challenges if you are employing more advanced student loan planning techniques.

       

      The IRS Data Retrieval Tool is a new process for recertifying your student loans, meaning there could be a chance for errors in calculating your payment.

       

      Additionally, it may mislead you into recertifying your income, family size, and employment info earlier than your IDR Anniversary date.

       

      This could result in you having to make drastically higher student loan payments.

       

      If you do choose to link your IRS data, make sure you regularly log in to studentaid.gov to ensure your payments and loan values look correct.

       

      Authorization to Retrieve Federal Tax Information

      Section 3: Select Repayment Plans – Authorization To Retrieve Federal Tax Information

      When enrolling in an Income-Driven Repayment plan, you must annually recertify your income, family size, and employment information on your IDR Anniversary date.

       

      This step provides the option to link your Internal Revenue Service (IRS) data with the Department of Education.

       

      Instead of manually submitting your income, family size, and employment information each year, this process calculates your monthly payment using your most recent tax return, offering a quick and easy recertification method.

       

      Linking your information using the IRS Data Retrieval Tool is the easiest way for DIY student loan planning.

       

      However, it might pose challenges if you are employing more advanced student loan planning techniques.

       

      The IRS Data Retrieval Tool is a new process for recertifying your student loans, meaning there could be a chance for errors in calculating your payment.

       

      Additionally, it may mislead you into recertifying your income, family size, and employment info earlier than your IDR Anniversary date.

       

      This could result in you having to make drastically higher student loan payments.

       

      If you do choose to link your IRS data, make sure you regularly log in to studentaid.gov to ensure your payments and loan values look correct.

       

      Authorization to Retrieve Federal Tax Information

      Section 3: Select Repayment Plans – Authorization To Retrieve Federal Tax Information (Provide Approval)

      This is the step where you grant approval to link your IRS data with your Department of Education student loan information.

       

      Authorization to Retrieve Federal Tax Information

      Section 3: Select Repayment Plans – Authorization To Retrieve Federal Tax Information (Provide Approval)

      This is the step where you grant approval to link your IRS data with your Department of Education student loan information.

       

      Authorization to Retrieve Federal Tax Information

      Section 3: Select Repayment Plans – Confirm Your Marital Status

      This is the step where you grant approval to link your IRS data with your Department of Education student loan information.

       

      Confirm Marital Status - Single

      Section 3: Select Repayment Plans – Confirm Your Marital Status

      This is the step where you grant approval to link your IRS data with your Department of Education student loan information.

       

      Confirm Marital Status - Single

      Section 3: Select Repayment Plans – No Changes In Your Family Size

      If you don’t believe your family size will change in the next 12 months, select “no.”

       

      Changes in Your Family Size - No

      Section 3: Select Repayment Plans – No Changes In Your Family Size

      If you don’t believe your family size will change in the next 12 months, select “no.”

       

      Changes in Your Family Size - No

      Section 3: Select Repayment Plans – Changes In Your Family Size

      Remember, your Income-Driven Repayment plan payment is calculated based on your income and family size.

       

      If your family size increases, it will lower your student loan payment.

        

      If you believe your family size will change in the next 12 months, select “yes.”

       

      Note, if you have an unborn child, they can be included in your student loan calculation.

       

      Changes in Your Family Size - Yes

      Section 3: Select Repayment Plans – Changes In Your Family Size

      Remember, your Income-Driven Repayment plan payment is calculated based on your income and family size.

       

      If your family size increases, it will lower your student loan payment.

        

      If you believe your family size will change in the next 12 months, select “yes.”

       

      Note, if you have an unborn child, they can be included in your student loan calculation.

       

      Changes in Your Family Size - Yes

      Section 3: Select Repayment Plans – We’re Securely Importing Your Information

      In this step, your information will be securely connected.

       

      Be advised that you can revoke access to your IRS data at any point in the future.

       

      Log in to your account, go to “Settings,” and under “Financial Information,” select the “Revoke Consent” button.

       

      Type your name into the dialogue box to complete the process.

       

      Were Securely Importing Your Info

      Section 3: Select Repayment Plans – We’re Securely Importing Your Information

      In this step, your information will be securely connected.

       

      Be advised that you can revoke access to your IRS data at any point in the future.

       

      Log in to your account, go to “Settings,” and under “Financial Information,” select the “Revoke Consent” button.

       

      Type your name into the dialogue box to complete the process.

       

      Were Securely Importing Your Info

      Section 3: Select Repayment Plans – Income Changes Since Your Last Tax Return

      If your income has significantly decreased since your last tax return, you can provide documentation of your lower income to reduce your monthly student loan payment on an Income-Driven Repayment plan.

       

      Income Changed Since Last Tax Return

      Section 3: Select Repayment Plans – Income Changes Since Your Last Tax Return

      If your income has significantly decreased since your last tax return, you can provide documentation of your lower income to reduce your monthly student loan payment on an Income-Driven Repayment plan.

       

      Income Changed Since Last Tax Return

      Section 3: Select Repayment Plans – Provide Income Documentation

      If you haven’t filed a tax return in the past two years or do not wish to provide consent for the Department of Education to link to your IRS data, you will need to manually submit documentation of your income.

       

      If you have a tax return, you can submit it here.

       

      Otherwise, the most common alternative documentation of income is your paystub.

       

      Provide Income Documentation

      Section 3: Select Repayment Plans – Provide Income Documentation

      If you haven’t filed a tax return in the past two years or do not wish to provide consent for the Department of Education to link to your IRS data, you will need to manually submit documentation of your income.

       

      If you have a tax return, you can submit it here.

       

      Otherwise, the most common alternative documentation of income is your paystub.

       

      Provide Income Documentation

      Section 3: Select Repayment Plans – Estimate Your Payments

      By default, you are enrolled in the Standard 10-Year Repayment plan.

       

      This plan calculates your monthly student loan payment using your loan balance and interest rate, resulting in a substantial monthly payment.

       

      In contrast, an Income-Driven Repayment plan calculates your monthly payment based on your income and family size.

       

      There are three main repayment plans that early-career physicians consider:

       

        

      Please note that if the information you entered is accurate, the next sections can be used to precisely calculate your next student loan payment.

       

      However, as life changes and you graduate from training, and your income increases or decreases, this tool will not accurately determine which strategy is best for you.

        

      For simplicity, SAVE will almost always allow you to have the lowest monthly payment during training.

       

      Estimate Your Payments

      Section 3: Select Repayment Plans – Estimate Your Payments

      By default, you are enrolled in the Standard 10-Year Repayment plan.

       

      This plan calculates your monthly student loan payment using your loan balance and interest rate, resulting in a substantial monthly payment.

       

      In contrast, an Income-Driven Repayment plan calculates your monthly payment based on your income and family size.

       

      There are three main repayment plans that early-career physicians consider:

       

        

      Please note that if the information you entered is accurate, the next sections can be used to precisely calculate your next student loan payment.

       

      However, as life changes and you graduate from training, and your income increases or decreases, this tool will not accurately determine which strategy is best for you.

        

      For simplicity, SAVE will almost always allow you to have the lowest monthly payment during training.

       

      Estimate Your Payments

      Section 3: Select Repayment Plans – Estimate Your Payments (Calculation)

      Here’s a general rule of thumb:

       

      If you’re single or married filing separately, and your future income is expected to exceed $100,000 of your student loan balance, PAYE/IBR might be your best options due to their payment cap.

       

      However, during training, everyone is likely to benefit from SAVE as it offers the lowest monthly payment.

       

      Estimate Your Payment ($60,000)

      Section 3: Select Repayment Plans – Estimate Your Payments (Calculation)

      Here’s a general rule of thumb:

       

      If you’re single or married filing separately, and your future income is expected to exceed $100,000 of your student loan balance, PAYE/IBR might be your best options due to their payment cap.

       

      However, during training, everyone is likely to benefit from SAVE as it offers the lowest monthly payment.

       

      Estimate Your Payment ($60,000)

      Section 4: References – References

      You are required to provide two references.

       

      It’s important to note that these references will never be asked to repay your loans, and they are not cosigners.

       

      The purpose of providing references is to assist the Department of Education in contacting you if they are unable to reach you directly.

       

      References

      Section 4: References – References

      You are required to provide two references.

       

      It’s important to note that these references will never be asked to repay your loans, and they are not cosigners.

       

      The purpose of providing references is to assist the Department of Education in contacting you if they are unable to reach you directly.

       

      References

      Section 4: References – Add New Reference

      This is where you will add the contact information for a new reference.

       

      Add References

      Section 4: References – Add New Reference

      This is where you will add the contact information for a new reference.

       

      Add References

      Section 5: Terms and Conditions – Terms and Conditions

      The challenging part is complete. Next, you will be prompted to review the terms and conditions.

       

      Terms and Conditions

      Section 5: Terms and Conditions – Terms and Conditions

      The challenging part is complete. Next, you will be prompted to review the terms and conditions.

       

      Terms and Conditions

      Section 5: Terms and Conditions – Agree to the Terms and Conditions

      If you agree to the terms and conditions, go ahead and accept them.

       

      Agree to the Terms and Conditions

      Section 5: Terms and Conditions – Agree to the Terms and Conditions

      If you agree to the terms and conditions, go ahead and accept them.

       

      Agree to the Terms and Conditions

      Section 6: Review and Submit – Review Your Application

      Review your application carefully and check for any inaccuracies.

       

      If you find any, use the “Edit” function to correct the information.

       

      Review and Submit

      Section 6: Review and Submit – Review Your Application

      Review your application carefully and check for any inaccuracies.

       

      If you find any, use the “Edit” function to correct the information.

       

      Review and Submit

      Section 6: Review and Submit – Sign Your Application

      Complete the process by signing and submitting your application.

       

      Keep in mind that the consolidation process can take 60-90 days, occasionally longer. Be patient but ensure you regularly check for updates.

       

      It is highly encouraged to create a folder or system to track everything related to your student loans.

       

      Include any PDFs, documentation, or communications with studentaid.gov or your servicer, noting the time, date, and what was addressed.

       

      The Department of Education has been notoriously inefficient, so diligently tracking every part of the process empowers you.

       

      Sign Your Application

      Section 6: Review and Submit – Sign Your Application

      Complete the process by signing and submitting your application.

       

      Keep in mind that the consolidation process can take 60-90 days, occasionally longer. Be patient but ensure you regularly check for updates.

       

      It is highly encouraged to create a folder or system to track everything related to your student loans.

       

      Include any PDFs, documentation, or communications with studentaid.gov or your servicer, noting the time, date, and what was addressed.

       

      The Department of Education has been notoriously inefficient, so diligently tracking every part of the process empowers you.

       

      Sign Your Application

      Start Dreaming Bigger, Today.

      Finally Take Control of Your Student Loans!

      Start Dreaming Bigger, Today.

      Finally Take Control of Your Student Loans!

      It All Begins with a Diagnosis…

      At Dream Bigger Financial, we’re dedicated to setting early-career physicians on the right financial treatment plan.

      With a comprehensive diagnosis, we guide you towards financial peace of mind, ensuring you can be your best self for your loved ones and patients.

      Considering financial planning?

      We’re currently accepting new patients!

      If you prefer self-diagnosing,
      join us on social media!

      We regularly share tips and tricks on lowering taxes, managing student loans, saving for retirement, and guiding you to live your best financial life.

       

      Michael Putterman

      Michael Putterman, CFP®

      cfp logo black outline xs 5

      ☁  Virtually serving clients nationwide 

      It All Begins with a Diagnosis…

      At Dream Bigger Financial, we’re dedicated to setting early-career physicians on the right financial treatment plan.

      With a comprehensive diagnosis, we guide you towards financial peace of mind, ensuring you can be your best self for your loved ones and patients.

      Considering financial planning?

      We’re currently accepting new patients!

      If you prefer self-diagnosing,
      join us on social media!

      We regularly share tips and tricks on lowering taxes, managing student loans, saving for retirement, and guiding you to live your best financial life.

       

      Michael Putterman

      Michael Putterman, CFP®

      cfp logo black outline xs 5

      ☁  Virtually serving clients nationwide